Hospitals Caught Between a Rock and a Hard Place Over 'Observation'

Cheryl Clark, for HealthLeaders Media , September 15, 2010

She couldn't walk, didn't speak like she usually did, and was unable to finish sentences. "Her words just trailed off," Lubrant says.  

With an underlying diagnosis of subcortical dementia, she didn't meet evidence-based criteria for admission, Lubrant said.

In March, there was a similar incident. Her mother woke up unable to move her legs or perform three activities of daily living. She was taken by ambulance to ISJ, given tests and X-rays and a variety of physical therapies. "We were told it was just normal aging," Lubrant said, keeping her frustration under control.

Then when her mother was ready for discharge, Lubrant recalls, the family was told that her mother was never admitted, and therefore not qualify for Medicare benefits, and would have to pay the nursing home bill privately. Worse, they had no rights of an appeal that an inpatient has.

I know there's a reason why policies like observation status designation exist. We must make sure that over-eager hospitals, perhaps those with poor diagnosticians or those with low census, don't admit patients who don't really need to be there.

But the growth in the number of observation status patients—without a corresponding reason—should tell us that this is a problem that sorely needs fixing. 

Hopefully, CMS is working on it.  But as of this week, CMS' Griffith says, there is "nothing new to report."

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11 comments on "Hospitals Caught Between a Rock and a Hard Place Over 'Observation'"

Priscilla T. Bassett (2/8/2012 at 6:01 PM)
a fair presentation of the hospital side

Kay F. (9/21/2010 at 11:45 PM)
I know Medicare expects the beneficiary to ask a hospital whether they are inpatient or observation. Medicare even publishes a brochure explaining the difference. But also according to Medicare if she was admitted as Inpatient and then changed to observation then it was then this hospitals responsibility to notify her of the change. Did it really take 5 days for them to notify her? And why would a hospital keep a patient past 48 hours if they are not sick enough to be an "inpatient"? It seems like a real financial loss for the hosptial.

sobrien (9/21/2010 at 5:04 PM)
When a physician makes the decision to keep a patient in the hospital, one of the first decisions he/she must make (usually with the guidance of a Utilization Review Nurse) is whether the patient should be admitted as an 'Inpatient', or made 'Observation'. The criteria that is used to guide this decision is spelled out in the InterQual or Millimen criteria. With each years update in the criteria guidelines, Inpatient criteria has become increasingly harder to meet. The new criteria, which became active as of August 1st, makes it especially difficult to justify an 'Inpatient' admission. The patients aren't any less sick, but the criteria points us toward an 'Observation' stay. Though CMS guidelines recognize that the decision to admit a patient is a "complex medical decision", the hospital is at risk of being denied payment if the patient is admitted to 'Inpatient', yet does not clearly meet this criteria. The changes this year will likely show an even bigger jump in the use of 'Observation' stays, with the resulting burden begin placed on both the hospitals, as well as the patients and their families.




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