She adds that hospitals' and physicians' relationships with patients "[get] to the core of why we did this study. It's very understandable that patients are upset. They think they're going to be covered because they have Medicare, but they're not. I think it's a problem for hospitals PR-wise. We are really struggling with this."
Sheehy's study also found that even though Medicare's rules say observation status should typically require less than a 24-hour stay, and only in rare circumstances last more than 48 hours, that is not the common practice at the University of Wisconsin Hospital, or in many other organizations as well.
In fact, of the 43,853 patient stays analyzed, 10.4% were assigned to observation status. Of these 4,578 patients, 44.4% were discharged within 24 hours, 39.1% between 24 and 48 hours, and 16.5% exceeded 48 hours.
The fact that hospitals aren't always following Medicare's rules, Sheehy says, "is a problem for any type of legislation" that may come out.
"On a doctor-to-patient level, this is upsetting," Sheehy says. There's a proportion of patients who may not understand what this means. And those patients who do understand, many of them ask us, 'Make me an inpatient,' but we just can't do it. It would be fraudulent billing. We're in a tough spot. Our hands are tied."