Observation Status Rules Rankle Hospitals, Patients

Cheryl Clark, for HealthLeaders Media , December 13, 2010
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Some blame the trend on hospitals' growing fear of RAC investigations.

CMS officials acknowledged the increase and, on Aug. 24, held a listening session in Baltimore to get a better understanding.

According to CMS spokeswoman Ellen Griffith, more than 2,103 people---representing hospitals, nursing homes, patients, family members, and others---dialed in, a record for the agency. Providers across the country expressed their exasperation.

"We're here to understand why this trend is growing," Jonathan Blum, CMS' deputy administrator and director of its Center for Medicare told them. "How can CMS better educate beneficiaries? Should CMS make changes to guidance policies? We're all ears."

Under Medicare rules, observation was supposed to be limited to 24 or 48 hours, so clearly many hospitals want to keep the patients close by in the belief that they may be too sick to go home, but too healthy to qualify for a RAC-free admission, Medicare officials heard.

Complaints from family members have risen as well. Tarasovitch says ISJ received three as of mid-September this year from families who've been saddled with bills they didn't think they deserved, and certainly didn't expect.

"Their frustration levels are getting higher and higher," he says, "and we're caught in the middle."
Part of the issue is that Medicare's rules  are too complicated for emergency room use, explains John Fontanetta MD, chairman of emergency medicine at Clara Maass Medical Center, a 320-staffed-bed hospital in Belleville, NJ. He is also chief medical officer of Emergency Department Information Management Solutions.

"If you asked 10 physicians with different specialties what an appropriate admission is, you may get 10 different answers. They're completely sincere and honest," he says. Further, that honest opinion sometimes varies depending on a physician's specialty. For example, if an ED doctor has expertise in asthma and sees a patient with those symptoms, he might feel more comfortable sending that patient home than another doctor who doesn't have that expertise.

"We have to do what is right for the patient," Fontanetta adds. "If that means the payers are going to deny it, then so be it. The hospitals absorb those costs all the time."

Steven Meyerson, MD, an internist at Baptist Hospital in Miami, spoke at the CMS listening session. "Observation is a time to make a decision on whether a patient needs to be admitted, but that's not really how it's used in practice," he said. "In reality these are sick patients who need to be admitted."

Sandra Schneider, MD, president of the American College of Emergency Physicians, points to another factor: the Emergency Medical Treatment and Active Labor Act.

EMTALA requires that patients be discharged safely. "If we send a patient who is a fall risk home and they fall, that's a possible EMTALA violation, even if they don't hurt themselves in that fall," she says. But being a fall risk doesn't by itself justify admission.

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