New Report Highlights Problems Of Hospital ‘Observation’ Stays

Medicare patients had more than 600,000 hospital stays in 2012 that lasted three nights or more but did not qualify them for follow-up nursing home care, according to a new report by the U.S. Department of Health and Human Services’ Office of Inspector General (OIG). Although the report does not include historical data, it indicates that hospitals in the U.S. increasingly are designating multi-day stays as outpatient or “observation status” visits, rather than inpatient admissions. In all, Medicare beneficiaries had 1.5 million hospital stays in 2012 that were classified as observation visits, with more than a third of them lasting two nights or more. The “observation status” designation – which often deprives Medicare recipients of coverage for follow-up nursing home care – is being challenged in a lawsuit in U.S. District Court in Hartford and in legislation proposed by Democrat U.S. Rep. Joe Courtney, who represents the 2nd Congressional District. Many Medicare beneficiaries who come to hospitals in emergencies are classified as observation patients, even though the care they receive may be indistinguishable from the care received by patients classified as inpatients. Under current rules, Medicare will not pay for a stay in a skilled nursing facility after hospitalization unless the beneficiary has been classified as an inpatient for at least three consecutive days.

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