AHA: Observation Status Fears on the Rise

Cheryl Clark, for HealthLeaders Media , October 29, 2010

"Making this status change is elaborate operationally; therefore physicians are more likely to order observations services when there is a question as to whether the patient's condition qualifies for an inpatient admission."

Pollack's letter didn't mention it, but hospital officials also are concerned about the rule's impact on relationships with their patients and family members.  When Medicare patients are not considered admitted for at least three days, the agency will not cover subsequent care in a skilled nursing home, and certain self-administrated drugs.  That can sour relations with patients and their families—who often don't understand why a five or 10-day stay in the hospital was not considered an admission, angry at the hospitals.

Even a patient who is in the hospital for 10 days, but was only "admitted" for two of them, would not have that Medicare coverage.

Pollack says the AHA supports a bill by Rep. Joe Courtney, D-CT, and a similar one to be introduced in the Senate, which would count time spent as a patient in observation toward meeting that three day rule.

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