Wednesday, November 20, 2013

When is a Hospital Stay Not a Hospital Admission?

Question: When is a hospital "stay" not a hospital "admission?"  Answer: When someone has a financial incentive to treat it that way. 

My colleague Becky Morgan has blogged several times on the serious problem with seemingly fictional "observation status" labels attached to hospital stays, as well as the so-called "3 Midnight" requirement. See Sept. 20 Post and Sept. 5 Post.   For patients, the observation status fiction impacts on whether Medicare Part A will cover the care in the hospital.  Further, without three nights of covered care in the hospital, Medicare may not cover subsequent care at a skilled care facility for rehabilitation. 

Why do hospitals use "observation status" labels? Well, at last one reason is because the label may reduce the potential for regulation-based penalties to attach to later readmissions to the hospital. Why do regulatory authorities indulge in the fiction?  Probably because -- on some level -- the consequences are seen as reducing Medicare costs.

Several bills are pending in Congress that would impact affected parties if enacted.  Here's an inventory, complete with clever names.  Let's hope the clever names are not more important than actually finding a solution:

  • CARES Act: The "Creating Access to Rehabilitation for Every Senior" Act, H.R. 3531, introduced by Rep. Jim Renacci (R-OH), would eliminate the 3-midnight rule for transfers to certain "qualified" centers.  This bill was introduced on November 19, 2013.
  • Fairness for the Beneficiaries Act:  Under H.R. 3144, a physician could certify that a resident requires skilled care for rehabilitation as a prequisite to Medicare Part A coverage. This bill was introduced by Rep. Jim McDermot (D-WA) on September 19, 2013
  • Improving Access to Medicare Coverage Act: Rep. Joe Courtney (D-CT), introduced H.R. 1179 on March 14, 2013, would treat outpatient observation status services in a hospital as inpatient services for purposes of satisfying the 3-day requirement for extended care services in a skilled nursing facility. Senator Sherrod Brown (D-OH), sponsored parallel legislation, S. 569, in the Senate on the same day.

Any other pending legislation on this topic?  Of course, some of the bills were also introduced in 2011, but generated no significant action. 

Some interim administrative changes through CMS have generated opposition, as insufficient or unworkable. as reported in McKnights

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Federal Statutes/Regulations, Health Care/Long Term Care, Medicare | Permalink

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