Tuesday, June 5, 2012

Observation Stays on the Rise

A little known and understood problem in Medicare is bubbling to the surface again today as a group of gerontologists at Brown University released a study regarding observation stays.

They found that between 2007 to 2009, observation stays increased 25% while, at the same time, observation patients remained in the hospital longer with an 88% increase in the amount of patients staying at least 72 hours, well past Medicare’s recommended 24-48 hours.

Brown’s study has been receiving some attention around Kaiser, Politico and California Watch. The researchers also provided Kaiser with some additional information, including a state breakdown.

For those of you who aren’t familiar with observation stays (don’t worry, you’re not the only one), here’s a little background:

In order to access the skilled nursing facility benefit under Medicare Part A, patients must be admitted to an acute care hospital for at least three days. Increasingly (as demonstrated today), hospitals are keeping patients under observation rather than having them admitted as inpatients.

If a Medicare beneficiary was hospitalized under observation, and needs skilled nursing facility care once he or she is released, Medicare will not cover those post-acute services under Part A, even if the observation stay lasted more than three days because – technically – the patient was not admitted as an inpatient and remained under observation.

Such extended observation stays appear to be related to hospitals’ concerns about potential denials of reimbursement due to allegations that there was no medical necessity for an inpatient stay.

We here at AHCA are concerned that Medicare beneficiaries’ access to skilled nursing care is being constrained by this increased use of observation stays, which prevents patients from reaching the three-day stay threshold for Medicare coverage.

Take California Watch’s story about Loretta Jackson. She is a Medicare beneficiary and spent five days in the hospital back in 2009 after suffering from severe back and leg pain. Her doctor recommended she check into a skilled nursing facility to recuperate, but when she got there, she was asked to pay $7,000 up front. It was because Medicare would not pay for her post-acute care since she was only under observation stay status at the hospital.

Fortunately, there is an opportunity to reverse this increasing trend and prevent these situations for people like Loretta. In Congress, Representatives Joseph Courtney (D-CT) and Tom Latham (R-IA) and Senators John Kerry (D-MA) and Olympia Snowe (R-ME) have introduced the Improving Access to Medicare Coverage Act of 2011 (H.R. 1543/S. 818). This legislation would make all days spent in a hospital count toward Medicare’s three-day hospital stay requirement, including observation stays.

Let your Member of Congress know you support this bill. And hopefully, we can better align our nation’s health care policies with our goal of providing more person-centered care.

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