Abbey, Duane. “Inpatient Versus Outpatient: The Real Issue.” RAC Monitor. 06 March 2014. http://www.racmonitor.com/rac-enews/1618-inpatient-versus-outpatient-the-real-issue.html (site visited September 21, 2016).
The author writes that there aren’t any well-established guidelines for Recovery Audit Contractors (RACs) when they review observation-related Medicare appeals. When there are disagreements, RACs can be directed to specific criteria. Unfortunately, Medicare RACs lack such standards and are free to make arbitrary decisions should they wish to do so.
Abbey, Duane. “Observation in the NOTICE Act: What is Being Accomplished?” RAC Monitor. 27 April 2016. http://www.racmonitor.com/rac-enews/2031-observation-in-the-notice-act-what-is-being-accomplished.html (site visited September 21, 2016).
The author points out that observation services may not add up to the 24 hours required for the issuance of the MOON even if the patient seems to have spent 24 hours in observation because observation services may have only been billed for a fraction of the total 24 hours. Clinicians should have a firm understanding, the author notes, of the Medicare rules regarding what hours add up to either an inpatient or observation designation and how these qualify or disqualify the patient for certain services under Medicare.
Adamopoulos, Helen. “Medicare Recovery Audit Program Targeted for Reform after Spike in Observation Stays.” Modern Healthcare. 20 May 2015. http://www.modernhealthcare.com/article/20150520/NEWS/150529982 (site visited September 16, 2016).
“Members of the U.S. Senate Special Committee on Aging called on the CMS during a hearing Wednesday to make changes to Medicare's recovery audit contractor program, which some providers have identified as a driving force behind the rise in observation stays in recent years.” Sean Cavanagh stated that CMS had already begun to consider ways to reform the RAC program.
Andrews, Michelle. “Observation Units Can Improve Care But May Be Costly For Patients.” Kaiser Health News. 12 February 2013. http://khn.org/news/021213-michelle-andrews-observation-care/ (site visited September 15, 2016). P. 450-3.
Describes observation status’ effects on patients’ out-of-pocket costs. The author writes that many hospitals do not have observation units where patients would receive the kind of standard of care they would otherwise have received had they gone to a hospital where such a unit existed. She states that only a third of hospitals have such designated units.
Angle, Jim. Frustrating Medicare Catch: Who's an In-Patient at the Hospital and Who's under Observation?” Fox News. 06 February 2014. http://www.foxnews.com/politics/2014/02/06/frustrating-medicare-catch-who-in-patient-at-hospital-and-who-under-observation.html (site visited September 19, 2016).
The author discusses the Courtney bill before Congress and its having 135+ cosponsors. The writer also quotes the Center’s Toby Edelman, who states that many observation patients are surprised to learn they were not admitted as inpatients.
Baier R.R.; Gardner R.L.; Coleman E.A.; Jencks S.F.; et. al. “Shifting the Dialogue from Hospital Readmissions to Unplanned Care.” American Journal of Managed Care. June 2013. 19:6. http://www.ncbi.nlm.nih.gov/pubmed/23844707 (site visited September 15,2016). P. 450-3.
In the analysis of hospital readmissions, admissions, ED admissions, and observation stays within a Rhode Island QIO, the study found that observation rates increased and readmission rates decreased.
Barr, Paul. AHCA Weighs in on Three-Day Minimum.” Modern Healthcare. 05 September 2012. http://www.modernhealthcare.com/article/20120905/NEWS/309059963 (site visited September 13, 2016).
“The American Health Care Association argued to the CMS that all of a patient's days in a hospital—including days spent on observation status—should count toward a Medicare three-day minimum before the patient qualifies for Medicare skilled-nursing care.”
Barr, Paul. “Big Debate on Short-Term Stays.” Modern Healthcare. 08 September 2012. http://www.modernhealthcare.com/article/20120908/MAGAZINE/309089975 (site visited September 13, 2016).
The AHA complain that CMS had not at that time set clear guidelines for when patients were to be classified as inpatients or observation patients. Various SNF provider groups say that patients aren’t getting appropriate SNF-levels of care because of observation status.
Barry, Patricia. “Medicare: Inpatient or Outpatient?” AARP Bulletin. October 2012. http://www.aarp.org/health/medicare-insurance/info-08-2012/medicare-inpatient-vs-outpatient-under-observation.html (site visited September 19, 2016).
The writer discusses the out-of-pocket costs observation patients face as well as the Center’s lawsuit claiming that observation status denies statutorily covered services. The author also advises observation patients to get a primary care physician to lobby the hospital to have the hospital admit the patient as an inpatient and to see if the primary care physician would find that home health services would be appropriate.
Barry, Patricia. “¿Paciente Internado o Ambulatorio?” AARP Bulletin. 07 September 2012. http://www.aarp.org/espanol/salud/medicare-y-el-seguro/info-09-2012/hospital-visita-internado-ambulatorio.html (site visited September 19, 2016).
A Spanish translation of “Medicare: Inpatient or Outpatient?”
Bass, Julie. “New Federal Law Requires Patient Disclosure of Observation Status.” The Advisory Board. 19 August 2015. https://www.advisory.com/research/cardiovascular-roundtable/cardiovascular-rounds/2015/08/notice-act (site visited September 22, 2016).
In addition to describing the NOTICE Act President Obama signed into law, the author also mentions the states that had previously required that patients receive a similar notification. Furthermore, the writer lists the most common observation diagnosis codes and lists the frequency with which these codes were used in 2013.
Basset, Mike. “The Ins and Outs of Observation Status.” For the Record. 08 April 2012. 24:7. http://www.fortherecordmag.com/archives/040912p10.shtml (site visited September 20, 2016). P. 10.
The author gives some advice concerning how physicians and other clinicians can take more accurate records and observations of patients in order to determine if the patient should be an inpatient or an observation patient.
Baugh, Christopher W. and Schuur, Jeremiah D. “Observation Care — High-Value Care or a Cost-Shifting Loophole?” The New England Journal of Medicine. 25 July 2013. 369. P. 302-305. http://www.nejm.org/doi/full/10.1056/nejmp1304493#t=article (site visited September 19, 2016).
The authors mention the Center’s 2011 observation-related suit. They then call for reforms that keep people who would otherwise be inpatients as inpatients and maintain observation care when short-term care is appropriate and hospitalization is not.
Baugh, Christopher W.; Venkatesh, Arjun K.; Hilton, Joshua A.; Samuel, Peter A., et. al. “Making Greater Use Of Dedicated Hospital Observation Units For Many Short-Stay Patients Could Save $3.1 Billion A Year.” Health Affairs. October 2012. 31:10. 2314-2323. http://content.healthaffairs.org/content/31/10/2314.abstract (site visited September 13, 2016).
“Using a systematic literature review, national survey data, and a simulation model, we estimated that if hospitals without observation units had them in place, the average cost savings per patient would be $1,572, annual hospital savings would be $4.6 million, and national cost savings would be $3.1 billion. Future policies intended to increase the cost-efficiency of hospital care should include support for observation unit care as an alternative to short-stay inpatient admission.”
Becker, Arielle Levin. “Advocates Challenge Use of ‘Observation Status.’” The Connecticut Mirror. 03 November 2011. http://ctmirror.org/2011/11/03/advocates-challenge-use-observation-status/ (site visited September 16, 2016).
The writer states that the Center filed a lawsuit (Bagnall v. Sebelius) against CMS challenging the legality of observation status. The Center’s Judy Stein is quoted as saying that observation status denies beneficiaries their coverage rights.
Becker, Arielle Levin. “Courtney Hopeful Congress Will Address Medicare ‘Observation Status.’” The Connecticut Mirror. 11 February 2014. http://ctmirror.org/2014/02/11/courtney-hopeful-congress-will-address-medicare-observation-status/ (site visited September 15, 2016).
The author mentions the Courtney observation-related bill and that it had a relatively higher number of supporters (137) at the time. The writer also quotes the Center’s Toby Edelman describing patients cashing in life insurance policies in order to pay for the SNF care that Part A would have otherwise covered had they been classified as inpatients at an acute hospital.
Becker, Arielle Levin. “‘Observation status:’ The Term Hospital Patients Should Know.” The Connecticut Mirror. 18 June 2014. http://ctmirror.org/2014/06/18/observation-status-the-term-hospital-patients-should-know/?hvid=3Gnnt (site visited September 15, 2016).
The author describes the notice of observation status that CT patients had to receive starting October 1, 2014 if they had this designation for more than 24 hours. The writer also describes the things the Center’s Judy Stein told her about what a patient could do if he or she receives this designation: convince your physician to change the status or use one of the Center’s observation status self-help packets to appeal one’s observation status.
Berthelot, Terry. “A Big Medicare Gap — No Vital Long-Term Care.” The Hartford Courant. 10 January 2016. http://www.courant.com/opinion/op-ed/hc-op-berthelot-long-term-health-care-limited-0110-20160108-story.html (site visited September 15, 2016).
The author mentions that a patient’s observation status designation creates an access to care issue for patients when they do not receive Part A coverage for their SNF stay and cannot pay for this care out of pocket.
“Berwick: Throw Out Medicare's Three-Day Inpatient Stay Rule.” The Advisory Board. 04 September 2013. https://www.advisory.com/daily-briefing/2013/09/04/berwick-throw-out-medicare-three-day-inpatient-stay-rule (site visited September 22, 2016).
Given the increased use of observation status in hospitals and the decreased utilization of the inpatient designation, Former CMS chief Don Berwick recommended doing away with the three-day hospitalization requirement for Part-A coverage of post-acute skilled nursing and rehabilitative care. The article quotes Rep. Courtney saying that fixing the problem regarding observation status’ bringing out-of-pocket costs to patients should be fixed statutorily. The article then mentioned his bill that would have qualified observation days for Part-A-covered, post-acute care.
Bieber, Christy. "Medicare’s Little-Known “Two-Midnight” Rule Could Cost You Thousands." Motley Fool (Oct. 30, 2017). https://www.fool.com/investing/2017/10/30/medicares-little-known-two-midnight-rule-could-cos.aspx.
Unfortunately, some of these seniors paid thousands of dollars more than others — and got far fewer covered benefits — because of a little-known rule called the two-midnight rule.
Many seniors don't even know this rule exists, much less realize how it affects them — until they end up with a huge bill for healthcare services.
In one review, researchers found as many as 7.4% of Medicare beneficiaries admitted to the hospital would have been treated as outpatients under the two-midnight rule. The study also revealed patients arriving to the hospital later in the evening or on weekends would be far more likely to be classified as inpatients compared with patients arriving before 8 AM or on weekdays.
If you're not an inpatient, Medicare Part A pays for nothing. All care you receive is covered under Medicare Part B and you pay 20% of the Medicare-approved amount for services. Unfortunately, when you add up all the co-insurance costs, you typically spend far more than you would have if you'd been admitted and Part A paid most of the bills.
Not being admitted also means you won't be eligible for Medicare or Medigap coverage for skilled nursing care if you require care after leaving the hospital. Patients admitted to a hospital for at least 3 days receive coverage for up to 100 days of skilled nursing service — like a stay in a rehab facility. But, time spent in the hospital under observation doesn't count toward the 3 days necessary for eligibility.
“Bill Requiring Medicare Patient Notification of Observation Status Heads to President Obama.” The Advisory Board. 30 July 2015. https://www.advisory.com/daily-briefing/2015/07/30/notice-bill (site visited September 22, 2016).
The author mentions not only that Congress passed the NOTICE Act, but also that other states had previously passed bills requiring similar notices. The writer also notes that the notice passed by Congress would require that observation patients be told of their being denied inpatient status and the financial implications of this denial.
Boccuti, Cristina and Casillas, Giselle. “Aiming for Fewer Hospital U-turns: The Medicare Hospital Readmission Reduction Program.” Kaiser Family Foundation. 30 September 2016. http://kff.org/medicare/issue-brief/aiming-for-fewer-hospital-u-turns-the-medicare-hospital-readmission-reduction-program/ (site visited October 11, 2016).
Driving the drop in readmission rates and the rise in observation stays are CMS’s hospital readmission penalties. In 2015, the third year of the Hospital Readmissions Reduction Program, the proportion of hospitals receiving readmissions-based penalties rose to 78 percent—up from 66 percent in 2014. CMS estimates that the sum of hospital penalties in 2015 rose to $428 million.
Bruce, David. "Saint Vincent Hospital posts a $1.2 million net profit after losing $21.7 million in 2015-16." Go Erie (Sep. 20, 2017). http://www.goerie.com/news/20170920/erie-hospital-posts-profit-for-early-2017.
Saint Vincent also benefited from having fewer patients in the hospital under observation status, which is reimbursed at a lower rate than patients who are admitted. The hospital’s rate declined from 34.46 percent to 31.67 percent.
Buck, Chuck. “Breaking News: Two-Midnight Rule 0.2-Percent Reduction Gone.” RAC Monitor. 02 August 2016. http://www.racmonitor.com/news/special-bulletins/2115-breaking-news-two-midnight-rule-0-2-percent-reduction-gone.html (site visited September 22, 2016).
The author notes that the 2017 Inpatient Prospective Payment System final rule released in August 2016 eliminated the Two-Midnight Rule. The writer also notes that the MOON would be delayed four months from August.
Buck, Chuck. “CMS MOON Shot Fizzles During Open Door Forum.” RAC Monitor. 1 March 2017. http://www.racmonitor.com/news/special-bulletins/2278-news-alert-cms-moon-shot-fizzles-during-open-door-forum.html (site visited March 10, 2017).
The writer says that a CMS open door forum call regarding the MOON offered more questions and provided few answers to the already existing questions providers and advocates have regarding the MOON. The author highlights CMS’s saying that on the MOON, there must be a clinical explanation for why the MOON-eligible patient was placed in observation status.
Buck, Chuck. “News Alert: OIG Wants to Target Hospitals’ Use of the Two-Midnight Rule.” 19 December 2016. http://www.racmonitor.com/news/special-bulletins/2230-news-alert-oig-wants-to-target-hospitals-use-of-the-two-midnight-rule.html (site visited January 9, 2017).
The author highlights the OIG report concerning the $2.9 billion it found had gone towards inappropriate short hospital stays. The author then quotes Dr. Ronald Hirsch who guesses that the Recovery Audit Contractors will, as a result of this report, have a much greater desire to audit short hospital stays.
Busz, Andrew. “New Federal Law Requiring Notification to Medicare Patients Placed in Observation Status.” Washington State Hospital Association. 03 September 2015. http://www.wsha.org/articles/new-federal-law-requiring-notification-to-medicare-patients-placed-in-observation-status/ (site visited September 19, 2016).
Regarding the NOTICE Act, the Association’s writer “recommends all hospitals that place patients in observation status learn about the new notification requirements and begin preparations to implement new communications procedures and content, as necessary.” The Association’s author then states that WSHA may provide some NOTICE-Act-related training opportunities for its members.
Carey, Mary Agnes. “Hospital Officials Complain To Senate Panel About Medicare Efforts On Observation Care.” Kaiser Health News. 26 June 2013. http://khn.org/news/hospital-officials-complain-to-senate-panel-about-medicare-efforts-on-observation-care/ (site visited September 15, 2016).
The article details the complaints of hospital officials regarding the time and price of dealing with observation/inpatient-status-related appeals. Another healthcare industry consultant interviewed for the article stated that the costs directed to preventing RAC denials could have otherwise been spent improving care coordination and patient care quality.
Carlson, Joe. “Judge Tosses Lawsuit Claiming Burden on Medicare Observation Patients.” Modern Healthcare. 24 September 2013. http://www.modernhealthcare.com/article/20130924/NEWS/309249962 (site visited September 13, 2016).
The author discusses a judge throwing out the Center’s lawsuit claiming that observation status is placing illegal burdens on patients.
Carlson, Joe. “Readmissions Are Down, but Observational-Status Patients Are Up—And That Could Skew Medicare Numbers.” Modern Healthcare. 08 June 2013. http://www.modernhealthcare.com/article/20130608/MAGAZINE/306089991 (site visited September 13, 2016).
The writer mentions that observation rate increases may be a result of rising readmissions reductions penalties as well as the SNF and Part B drug copays patients pay as a result of not receiving Part A coverage.
Carlson, Joe. “HHS Argues New Observation-Status Rule Renders Lawsuit Moot.” Modern Healthcare. 06 September 2013. http://www.modernhealthcare.com/article/20130906/NEWS/309069958 (site visited September 13, 2016).
The author discusses CMS’s request, given its belief in its clarifying in a final August 2013 rule when observation status is appropriate, to dismiss the Center for Medicare Advocacy’s observation-related lawsuit.
Carlson, Joe. “Senate Committee to Target Waste in Medicare.” Modern Healthcare. 01 February 2013. http://www.modernhealthcare.com/article/20130201/NEWS/302019900/senate-committee-to-target-waste-in-medicare (site visited September 14, 2016).
Senate Finance Committee considered observation status. “Among the top items is the long-simmering issue of how hospitals decide whether a given patient's care justifies the most expensive Medicare benefits, known as Medicare Part A hospitalization, or if the patient should have gotten less-lucrative outpatient Part B observation care.”
Carlson, Ken, Medicare patients who were under ‘observation’ are stung by hospital bills, Modesto Bee (Jul. 6, 2017), http://www.modbee.com/living/health-fitness/article160037214.html.
- The Center for Medicare Advocacy based in Washington, D.C., says it’s part of a coalition of groups fighting the misuse of observation status by hospitals. “The center has heard repeatedly about beneficiaries throughout the country whose entire stay in the hospital, including stays as long as 14 days, is classified by the hospital as outpatient observation,” says its website at http://www.medicareadvocacy.org/medicare-info/observation-status/.
- “Hardin said her mother received a number of services in the hospital, such as blood tests, an MRI, and care to make sure her diabetes was under control. The elderly woman was in the hospital for two days, was released, and returned to the hospital for two days after falling at home.”
Carrns, Ann. “When a Hospital Stay Is Not a Stay.” The New York Times. 18 March 2014. http://www.nytimes.com/2014/03/19/your-money/when-a-hospital-stay-is-not-a-stay.html (site visited September 14, 2016).
The author highlights observation status and its effects on patient out-of-pocket costs, the Two-Midnight Rule, and a congressional bill that would have gotten rid of the three-day inpatient stay requirement for Part A coverage. The article quotes the Center’s Toby Edelman discussing the legislation that would have waived the three-day requirement.
Cheng, Pei-Sze. “Medicare Denies Post-Hospital Care Costs for Patients 'Under Observation.'” NBC 4 New York. 26 January 2016. http://www.nbcnewyork.com/news/local/Medicare-Denies-Post-Hospital-Care-Costs-for-Patients-Under-Observation-366592501.html (site visited September 20, 2016).
The author discusses a Connecticut patient who received a high rehabilitation care bill for services he thought Medicare Part A would cover. The writer then quotes the Center’s Judy Stein discussing the pressure hospitals are under to curb hospital admissions and readmissions.
Clark, Cheryl. “Observation Status Costly for Hospitals.” 12 July 2013. http://www.healthleadersmedia.com/finance/observation-status-costly-hospitals (January 9, 2017).
The author discusses a July 2013 JAMA study that highlights hospitals’ losing money as a result of their admitting more patients into observation, thereby forfeiting larger reimbursement from the government.
“CMS Clarifies: Non-Doctors Can Admit Medicare Patients.” The Advisory Board. 12 September 2013. https://www.advisory.com/daily-briefing/2013/09/12/cms-clarifies-non-doctors-can-admit-medicare-patients (site visited September 22, 2016).
The Inpatient Prospective Payment System Final Rule for FY2014 states that the Two-Midnight Rule applies to stays crossing two midnights. The final rule clarifies who can process admission orders: physicians, physician assistants, nurses, and residents.
“CMS Delays Observation Status Rule That Will Cost Industry Millions Per Year.” The Advisory Board. 12 August 2016. https://www.advisory.com/daily-briefing/2016/08/12/cms-delays-notice-act-implementation (site visited September 21, 2016).
The author discusses the delayed implementation of the MOON until 2017 as well as how patients would be notified of their observation status given the author’s understanding of the functions of the MOON.
“CMS Issues Proposed Rule for Implementation of NOTICE Act Requirements.” Hall Render Killian Health & Lyman. 22 April 2016. http://www.hallrender.com/resources/article/2544/ (site visited September 21, 2016).
The law firm’s writers state that the MOON must be provided to all Medicare observation patients even if they lack Part B coverage and would, thus, have to pay an even more significant portion of observation costs out of pocket. The authors also state that the MOON must also be accompanied by a verbal explanation of observation status and its implications.
“CMS: Would Relaxing Payment Rules Improve Patient Care?” The Advisory Board. 13 August 2012. https://www.advisory.com/daily-briefing/2012/08/13/would-relaxing-payment-rules-improve-patient-care (site visited September 22, 2016).
“CMS has launched a pilot project that will let hospitals resubmit a Medicare claim for observation status if it is denied as an inpatient status claim.” This study of 380 acute hospitals would allow hospitals to keep 90 percent of their inpatient payments if they code someone as an observation patient. A spokesperson for the American Hospital Association states that the pilot is too limited in scope and that it should be applied to more hospitals.
Contos, Brian. “The Expanding Role of Observation Services: Q&A with Brian Contos.” The Advisory Board. 29 April 2011. https://www.advisory.com/research/cardiovascular-roundtable/cardiovascular-rounds/2011/04/the-expanding-role-of-observation-services-q-a-with-brian-contos (site visited September 22, 2016).
The writer says that the attention on observation status has a context in a time when many complex procedures that formerly required extended inpatient stays can now require much shorter hospital stays. Mr. Contos also lists some of the more common observation patient diagnoses such as chest pain. Nevertheless, there was at the time a great variety of observation-related diagnoses and only some consistency.
Crawley, Cathleen F. Observation Status, and a Nasty Surprise.” Times Union. 10 December 2012. http://www.timesunion.com/local/article/Observation-status-and-a-nasty-surprise-4106789.php (site visited September 19, 2016).
The author discusses the out-of-pocket costs faced by some observation patients. Also, the writer mentions that various bills before Congress at the time would have counted observation status stays towards certain Part-A-covered services. A hospital employee at a local hospital states that there are strong disincentives against labeling someone as an inpatient.
Daniels, Melissa . "Medicare Patients Get Nationwide Cert. in Due Process Suit." Law360 (Jul. 31, 2017), https://www.law360.com/articles/949806/medicare-patients-get-nationwide-cert-in-due-process-suit.
He also appointed class counsel from the Center for Medicare Advocacy Inc., Justice in Aging and Wilson Sonsini Goodrich & Rosati PC, citing their collective experience and expertise in complex Medicare cases, including class actions.
“They have dedicated careful work to this case over the past five and half years, including a successful appeal to the Second Circuit,” Judge Shea said. “As two national public interest organizations and a private law firm, counsel have already committed considerable resources to this case, and have represented that they will continue to do so.” Alice Bers, the litigation director at Center for Medicare Advocacy who is representing the plaintiffs, said they’re pleased with the broad class Judge Shea certified. “This is a critical step in creating an opportunity for patients to be heard on this issue,” she said. “Being put on observation has caused many people great hardship, and it’s not fair that it’s been carved out from appeal rights.”Bers said the Medicare appeals process has a carve-out for determinations that beneficiaries are outpatients. The ability to appeal that means that patients could be able to receive care they couldn’t otherwise afford, she said.“This decision recognizes that Medicare patients across the country face the very difficult situation where they have to choose between spending thousands of dollars on a nursing home, or simply forgoing that care,” she said.
Demasters, Karen. "Beware of Being In a Hospital For 'Observation.'" Financial Advisor (Dec. 27, 2017). https://www.fa-mag.com/news/beware-of-being-in-a-hospital-for–observation-36368.html.
“This difference in hospital status is something that advisors should make their clients aware of because it could cost them thousands of dollars,” says Roge, who specializes in financial geriatrics.
Another bill has been introduced by U.S. Representative Joe Courtney a Democrat from Connecticut, that requires Medicare to cover nursing home care after any three-day hospital stay, whether the patient was classified as an inpatient or outpatient. The bill has bipartisan support but has not moved for years.
A class action lawsuit has been filed against The Centers for Medicare and Medicaid Services by the Center for Medicare Advocacy and others. The suit seeks compensaton for those patients who were forced to pay medical expenses because they were classified as outpatients under observation.
Information on patients’ rights and advice can be found on the Center for Medicare Advocacy website. Advisors should put this information on their websites and send it to clients in emails, newsletters or blogs, Roge says.
Demko, Paul. “CMS Delays Enforcement of 'Two Midnights' Rule for Another Month.” Modern Healthcare. 01 April 2015. http://www.modernhealthcare.com/article/20150401/NEWS/150409981 (site visited September 13, 2016).
The article discusses Congress wishing to delay the implementation of the Two-Midnight Rule until after the passage of what became MACRA.
“Denver Health to Pay $6.3 Million for Overbilling Government.” The Denver Post. 05 January 2012. http://www.denverpost.com/2012/01/05/denver-health-to-pay-6-3-million-for-overbilling-government/ (site visited September 16, 2016).
“Denver Health Medical Center will pay $6.3 million to federal and state officials for overbilling Medicare and Medicaid.” Federal investigators looked into whether patients were improperly labeled as “inpatients” instead of “observation” patients.
Department of Health and Human Services Office of the Inspector General. “Vulnerabilities Remain under Medicare’s 2-Midnight Hospital Policy.” December 2016. https://oig.hhs.gov/oei/reports/oei-02-15-00020.pdf (site visited January 9, 2017).
The OIG reported the following: Hospitals had in fiscal year 2014 billed $2.9 billion worth of potentially-inappropriate short-term inpatient hospital stays per current regulations. The report then urges increased auditing of short-term stays. The authors also recommend analyzing “the potential impacts of counting time spent as an outpatient toward the 3-night requirement for SNF services so that beneficiaries receiving similar hospital care have similar access to these services” as well as exploring “ways of protecting beneficiaries in outpatient stays from paying more than they would have paid as inpatients.”
Dietsche, Erin. “9 Things for Hospitals to Know about the NOTICE Act.” Becker’s Hospital Review. 29 July 2015. http://www.beckershospitalreview.com/legal-regulatory-issues/9-things-for-hospitals-to-know-about-the-notice-act.html (site visited September 21, 2016).
The article’s writer states that the NOTICE Act requires that patients be told in their observation notice that observation status makes the patient ineligible for Part-A-covered SNF care. The author interviews a Yale-New Haven Hospital CEO—CT previously instituted its own kind of observation notice—who said that many patients left the hospital against medical advice after being informed of their observation status and of the financial implications of it.
Dickson, Virgil. “Can MedPAC Make the Two-Midnight Rule Go Away?” Modern Healthcare. 18 November 2014. http://www.modernhealthcare.com/article/20141118/BLOG/311189972 (site visited September 13, 2016).
Describes MedPAC’s proposal to eliminate observation status. Some MedPAC members expressed a desire to study the cost effects of eliminating such a classification.
Dickson, Virgil. “Obama Signs Medicare Observation Stays Bill.” Modern Healthcare. 07 August 2015. http://www.modernhealthcare.com/article/20150807/NEWS/150809895 (site visited September 13, 2016).
The author mentions the signing into law of the NOTICE Act. Furthermore, he spells out beneficiary advocates’ having concerns that the future MOON Notice would not provide avenues of recourse for patients who think they have been improperly classified as observation patients.
Dickson, Virgil. Providers Back Bill Notifying Medicare Patients about Observation Stays.” Modern Healthcare. 30 July 2015. http://www.modernhealthcare.com/article/20150730/news/150739996 (site visited September 16, 2016).
The AHA expresses support for the NOTICE Act, stating that giving patients such a notification would save them a great deal of money. The author paraphrases the Center’s Toby Edelman stating that the notice is only so desirable because it does not provide beneficiaries with the means for challenging their status.
Edwards, Chris. “Medicare Needs to End Observation Status for Patients.” Modern Healthcare. 06 September 2014. http://www.modernhealthcare.com/article/20140906/MAGAZINE/309069975 (site visited September 13, 2016).
The author, a chief medical officer at a hospital in Tennessee, points out that determining observation status consumes so many resources, thus negatively affecting the quality of administered care. Physicians are especially distracted by their fear of admitting an inpatient the hospital thinks should be an observation patient. Observation status is also confusing and distressing to patients.
Emerson, Christine. “Patients to be Protected From Observation Status, under Bill Signed by Gov. Brown.” Santa Monica Observer. 06 October 2016. http://www.smobserved.com/story/2016/09/27/news/patients-to-be-protected-from-observation-status-under-bill-signed-by-gov-brown/1929.html (site visited November 20, 2016).
The article describes a California bill signed into law that would require hospitals to provide equivalent care to observation status patients as compared to inpatients. The law also “prohibits hospitals from evading the requirements by disguising ‘observation’ units with a different name.”
Engle, Donna. "Legal Matters: Observation or inpatient? Patients should check as status has major Medicare ramifications." Carrol County Times (Apr. 7, 2017). http://www.carrollcountytimes.com/columnists/features/law/ph-cc-legal-matters-040917-20170403-story.html.
- “Patients who learn they are on observation status while in the hospital can ask the doctors to admit them as inpatients. Winning Medicare coverage by appealing after leaving the hospital is increasingly difficult, according to the Center for Medicare Advocacy”
- “The National Institutes of Health documented a 34 percent increase in the number of observation stays versus inpatient hospital admissions between 2007 and 2009. A subsequent government investigation found that observation patients often have the same health problems as patients admitted to the hospital, according to an August 29, 2016 Kaiser Health News report.”
Feng, Zhanlian; Wright, Brad; and Mor, Vincent. “Sharp Rise In Medicare Enrollees Being Held In Hospitals For Observation Raises Concerns About Causes And Consequences.” Health Affairs. June 2012. 31:6. P. 1251-1259. http://content.healthaffairs.org/content/31/6/1251.abstract (site visited September 13, 2016).
“Using Medicare enrollment and claims data nationwide, we documented a rising trend in the prevalence and duration of hospital observation services in the fee-for-service Medicare population during 2007–09, accompanied by a downward shift in inpatient admissions…The prevalence of observation services varied greatly across geographic regions and hospitals.”
Fentem, Sarah. “Hospital Readmissions Take A Dip – But Reduction Incentive Isn't Problem-Free.” WBAA/NPR. http://wbaa.org/post/hospital-readmissions-take-dip-reduction-incentive-isnt-problem-free#stream/0 (site visited November 20, 2016).
Pat Rutherford of the nonprofit Institute for Healthcare Improvement explains his belief that the reduction in the number of hospital readmissions may be a result of placing so many patients in observation status.
“Fights over Two-Midnight Rule, Observation Care Continue.” The Advisory Board. 16 July 2014. https://www.advisory.com/daily-briefing/2014/07/16/fights-over-two-midnight-rule-observation-care-continue (site visited September 23, 2016).
The author points out that the Two-Midnight Rule’s responses among providers, hospitals, beneficiary advocates, etc. are mostly negative. The writer also refers mostly to text from a Jayne O'Donnell USA Today article regarding the controversies surrounding the often-delayed rule.
Fontana, Eric. “Are You Using Observation Status Too Often?” The Advisory Board. 29 May 2014. https://www.advisory.com/research/care-transformation-center/care-transformation-center-blog/2014/05/benchmark-generator-observation-utilization (site visited September 13, 2016).
The article discusses the lack of benchmarks that can be used to determine either inpatient or observation status. The author also mentions the new Advisory Board tool that includes various financial, quality, and operational metrics that allows a hospital to pick a sister hospital from a list and compare performance side-by-side.
Fontana, Eric. “How the Two-Midnight Rule Will Affect Your Hospital.” The Advisory Board. 19 February 2014. https://www.advisory.com/research/cardiovascular-roundtable/cardiovascular-rounds/2014/02/two-midnight-impact-assessment (site visited September 22, 2016).
The writer identifies services CMS was, he viewed, likely to begin seeing as observation and not inpatient services. Mr. Fontana also concludes that there were not enough long-term observation stays in recent years to offset hospitals’ long reimbursement rates due to observation status and the looming Two-Midnight Rule.
Fontana, Eric. “The 'Two-Midnight' Rule: What You Need to Know.” The Advisory Board. 15 October 2013. https://www.advisory.com/research/cardiovascular-roundtable/cardiovascular-rounds/2013/10/q-a-the-two-midnight-rule (site visited September 22, 2016).
The author writes about the Two-Midnight Rule. According to the rules at the time, a patient labeled as an inpatient because of the expectation of a two-midnight stay but only ends of staying one night needs clear physician documentation explaining why a stay of two midnights was initially expected. The expectation of a two midnight stay, CMS stated, would have been enough to justify labeling a patient as an inpatient.
Frakt, Austin. “The Hidden Financial Incentives behind Your Shorter Hospital Stay.” The New York Times. 04 January 2016. http://www.nytimes.com/2016/01/05/upshot/the-hidden-financial-incentives-behind-your-shorter-hospital-stay.html?_r=0 (site visited September 13, 2016).
The author discusses the readmission penalties for hospitals and the consequent rise of observation stays. The writer then quotes a Harvard physician who confirms that doctors’ placing patients in observation status is a result of CMS’s hospital readmission penalties.
Freeman, Liz . "Lawsuit aims to give Medicare seniors rights on hospital stay." Naples Daily News (Aug. 12, 2017). http://www.naplesnews.com/story/news/health/2017/08/12/lawsuit-aims-give-medicare-seniors-rights-hospital-stay/560482001/.
“The Washington, D.C.-based Center for Medicare Advocacy, which focuses on seniors’ rights, was recently granted class action status in a lawsuit against the federal government regarding the policy. The issue is whether patients should have the right to appeal to Medicare when they are placed by a hospital on the outpatient-based observation designation, as opposed to admitted.”
“The class could be hundreds of thousands of people, if not more,” Alice Bers, the group’s litigation director, said. “We know hundreds of thousands of people are put on observation status every year.”
“I think (Florida) could be a very significant part of the class because so many Medicare beneficiaries are in Florida,” Bers said.
If patients gain the right to appeal their observation designation while still in the hospital, it could prevent families from facing the nursing home coverage nightmare later, Bers said.
Medicare patients have the right to appeal when they believe they are being discharged too early, but there is no right to fight the observation designation, said Bers, the litigation director for the consumer group.
Medicare patients have the right to appeal when they believe they are being discharged too early, but there is no right to fight the observation designation, said Bers, the litigation director for the consumer group.
“This has been carved out of the appeals’ rights,” Bers said. “The relief would be to appeal while still in the hospital, within a day or so and get answers, just like they can expect a decision on a discharge too early. Medicare’s position is there is no right for a beneficiary to appeal designation as observation status.”
Extensive use of observation status and its pitfalls came to the consumer group’s attention starting about 15 years ago, Bers said. Complaint calls from families grew steadily as hospitals became more fearful of Medicare audit contractors scrutinizing admissions, she said. Reimbursement is higher to hospitals when patients are admitted versus the observation designation, even though there is often no difference in the services being provided.
“Hospitals started running scared and started putting more people on observation status,” she said.
Frieden, Joyce. “Senate Committee Mulls Medicare Hospital Observation Stays.” MedPage Today. 22 May 2015. http://www.medpagetoday.com/publichealthpolicy/medicare/51715 (site visited September 19, 2016).
The author discusses Senator Susan Collins’ comments as part of the Senate Aging Committee in which she discusses rising observation status rates as well as the NOTICE Act. A Skilled Nursing Facility’s representative before the committee urged the body to waive the three-day hospitalization requirement for qualifying for Part-A-covered services.
Garland, Susan B. “A Costly Medicare Surprise Awaits Retirees.” Kiplinger. June 2015. http://www.kiplinger.com/article/retirement/T039-C000-S004-observation-status-costly-medicare-beneficiaries.html (site visited September 19, 2016).
The story discusses the out-of-pocket costs faced by an Oshkosh, Wisconsin man who was admitted to an acute hospital as an observation patient. The Center’s Toby Edelman states in the article that a hospital would rather receive less money in the form of outpatient Part B payments than have to deal with hospital readmission penalties they wouldn’t face if a readmitted patient had never been admitted as an inpatient in the first place.
Garland, Susan B. “Avoid Costly Medicare Surprise After a Hospital Stay.” Chicago Tribune. 15 June 2015. http://www.chicagotribune.com/lifestyles/health/sns-201507141230–tms–premhnstr–k-f20150715-20150715-story.html (site visited September 20, 2016).
The author speaks to researcher Keith Lind about the costs of coinsurance patients pay in observation care. The writer then provides tips for observation patients and includes a few lines in which the Center’s Toby Edelman talks about the appeals process.
Gerhardt, Geoffrey; Yemane, Alshadye; Apostle, Keri; Oelschlaeger, Allison; et. al. “Evaluating Whether Changes in Utilization of Hospital Outpatient Services Contributed to Lower Medicare Readmission Rate.” Medicare & Medicaid Research Review. 2014. 4:1. https://www.cms.gov/mmrr/Downloads/MMRR2014_004_01_b03.pdf (site visited September 13, 2016).
The authors conclude that the decrease in readmission rates is not due to observation status utilization, but the authors only look at the “observation” classification and do not take into account acute care outpatient admission rates.
Gleckman, Howard. “AARP's New Evidence That Medicare's Hospital Observation Rules Are a Mess.” Forbes. 20 April 2015. http://www.forbes.com/sites/howardgleckman/2015/04/20/aarps-new-evidence-that-medicares-hospital-observation-rules-are-a-mess/#2dcb7a6e6e68 (site visited September 19, 2016).
In discussing the Noel-Miller and Lind AARP study, the author mentions the evidence for rising observation rates in hospitals. The writer then goes on to say that in trying to put some cost controls onto hospitals, CMS went way too far and has imposed too many out-of-pocket costs on patients.
Gooch, Kelly. "Judge to rule whether Medicare patients can appeal observation-outpatient charges." Becker’s Hospital Rev. (Sept. 6, 2017). http://www.beckershospitalreview.com/legal-regulatory-issues/judge-to-rule-whether-medicare-patients-can-appeal-observation-outpatient-charges.html.
Provides a brief description of observation status and a link to the September 1, 2017 NY Times article by Paula Span.
Goozner, Merrill. “Editorial: Hospital Admission Policy in Dismaland.” Modern Healthcare. 29 August 2015. http://www.modernhealthcare.com/article/20150829/MAGAZINE/308299984 (site visited September 13, 2016).
The writer states that hospital readmissions dropped because hospitals had RAC audits as disincentives, which led hospitals to adopt better data analytics for identifying patients most at risk for hospital readmissions as well as because hospitals had stronger incentives to adopt more robust discharge planning.
Gurnon, Emily. “What Hospitals Must Now Reveal to Medicare Patients.” Next Avenue. 09 August 2016. http://www.nextavenue.org/hospital-observation-status-must-tell-patients/ (site visited January 9, 2017).
The writer describes an observation stay for a stroke patient that lasted 6.5 days as well as the NOTICE Act. Furthermore, the piece’s author highlights the financial disincentives CMS has put in place that may deter hospitals from calling patients “inpatients.”
Harris-Taylor, Marlene. Hospital Billing Trick Saddles the Ill with Unexpected Costs.” The Blade. 08 May 2016. http://www.toledoblade.com/Medical/2016/05/08/Hospital-billing-trick-saddles-the-ill-with-unexpected-costs.html (site visited September 13, 2016).
The author discusses what would come to be known as the MOON as well as the increase in observation stays and the decrease in hospital readmissions. The article quotes Senator Sherrod Brown discussing the out-of-pocket costs patients face when they’re placed in observation and need such things as skilled nursing and hospital-administered medications.
Herbert, Marc . "Money Matters: Attention, Medicare patients: You might get 'MOONed' by Medicare." WMUR (Feb. 23, 2017). http://www.wmur.com/article/money-matters-attention-medicare-patients-you-might-get-mooned-by-medicare/8972608.
“The Center for Medicare Advocacy has indicated that hospitals will be required “… to provide oral and written notification to patients who are classified as outpatients or observation status patients for more than 24 hours. Notice of non-inpatient status must be provided within 36 hours.”’
Herman, Bob. “Hospitals Hope for Relief from Two-Midnight Purgatory.” Modern Healthcare. 21 August 2014. http://www.modernhealthcare.com/article/20140821/NEWS/308219948/hospitals-hope-for-relief-from-two-midnight-purgatory (site visited September 13, 2016).
The author highlights the nature of the Two-Midnight Rule and how it is affecting patient admission practices. Also, he points out ways in which beneficiary advocate organizations had proposed to modify the rule such as the proposal to count any two, non-consecutive nights towards the patient’s inpatient stay requirement.
Himmelstein, David and Woolhandler, Steffie. “Quality Improvement: ‘Become Good At Cheating And You Never Need To Become Good At Anything Else.” Health Affairs. 27 August 2015. http://healthaffairs.org/blog/2015/08/27/quality-improvement-become-good-at-cheating-and-you-never-need-to-become-good-at-anything-else/ (site visited September 13, 2016).
The author’s view: Putting patients in observation status meets CMS’s standards, but harms the financial health of patients. “Medicare’s readmission penalties are among the growing number of pay-for-performance (P4P) and value-based purchasing initiatives that offer bonuses to high performers and/or penalize the laggards…Adopting unproven everywhere P4P strategies that have been proven nowhere risks quality failure on a monumental scale.”
Hirsch, Ronald. “An Open Letter to the OIG on Your Two-Midnight Hospital Policy Report.” RAC Monitor. 19 December 2016. http://www.racmonitor.com/news/special-bulletins/2231-an-open-letter-to-the-oig-on-your-two-midnight-hospital-policy-report.html (site visited January 9, 2017).
The author says that the OIG’s Two-Midnight-related report is invalid because it uses fiscal year 2013 and 2014 data to make a point about observation status even though rules changed for fiscal year 2016, thereby making the OIG’s review of the past irrelevant to the present status quo. Mr. Hirsch has qualms with the OIG’s highlighting cases of unsafe hospital discharges following a patient’s observation status stay; he states that patients given observation status would never be discharged from hospitals unless they had been deemed to be safe to return home.
Hirsch, Ronald. “CMS Walks Back the MOON Walk.” The RAC Monitor. 10 August 2016. http://www.racmonitor.com/rac-enews/2122-cms-walks-back-the-moon-walk.html (site visited September 22, 2016).
The author writes that he’s encouraged that the final rule that mentions the MOON states that anyone can deliver the MOON, even clerical staff. Mr. Hirsch also states that the emergency room is the best place to present the MOON. He also states that patients should not ask their physicians to try to change their status from observation to inpatient and calls doing so asking physicians to commit Medicare fraud.
Hirsch, Ronald. “Does the MOON Violate HIPAA?” RAC Monitor. 8 March 2017. http://www.racmonitor.com/rac-enews/2284-does-the-moon-violate-hipaa.html (site visited March 10, 2017).
The writer says that the open door forum concerning the MOON notes that a patient’s reason for being in observation status needs to be indicated on the MOON, but that a clinical explanation is not necessary. The writer had this to say, “David Glaser, a lawyer, member of the RACmonitor Editorial Board, and Risky Business segment presenter on Monitor Mondays, noted during his last Risky Business report that if a single phrase was applicable to all patients, then CMS would not have designed the form with a box that requires completion… What can hospitals expect when they start using the MOON? Sherri Ernst at Covenant Health in Knoxville, Tenn. told me they are already providing the MOON, and the average time to prepare and deliver the form is 20 minutes.”
Hirsch, Ronald. “New Issues Rise with the New MOON Rising.” 14 December 2016. http://www.racmonitor.com/rac-enews/2228-new-issues-rise-with-the-new-moon-rising.html (site visited December 15, 2016).
“There are two looming uncertainties. First, we are required to indicate why each patient is not being admitted as an inpatient. The only guidance is that this reason be specific. It seems that not meeting the two-midnight expectation is very specific, because it is the actual reason. In fact, it was good enough for CMS in the first version of the MOON that was released for public comment. But in Friday’s report on Medicare compliance from Nina Youngstrom, she notes that she spoke with a compliance officer who stated that he thinks CMS wants a clinical reason written on the form. I disagree…check-box reasons related to the two-midnight rule are fine. But as with any use of check boxes, adding an option for “other” that allows free text always makes sense.
The other issue is the verbal notification. Once again, we have no idea what CMS expects. The rule only stated that staff be available to provide an explanation and answer questions…I feel that a registration clerk can give the form with a simple explanation and then have someone available if there are questions. Unlike what the compliance officer mentioned previously, we do not think a clinical voice is required. Case managers are in short supply at most hospitals, and are usually overloaded with a multitude of ongoing tasks. They are also relatively highly compensated. It would be unreasonable to expect there to be a case manager available in the emergency department at all times for the MOON, especially considering the fact that many patients will have no questions at all. And since the form is not required until 24 hours of observation services have elapsed, if a patient in the ED does have a question, the form presentation and signature can be deferred to the time when a case manager is available.”
Hirsch, Ronald. “Observation Infographic: Misleading and Dangerous.” 30 November 2016. http://www.racmonitor.com/rac-enews/2215-observation-infographic-misleading-and-dangerous.html (site visited January 9, 2017).
The author takes issue with the Center’s and the John A. Hartford’s combined effort to create an observation-status-related infographic and criticism is that auditors have recently been prohibited from targeting hospitals for short stays. Hirsch also states that the Center’s suggesting that observation-status patients ask their doctors to change their status to inpatient is asking the doctor to commit fraud.
Hirsch, Ronald. “Observation Notices: Coming Soon to Every Hospital.” The RAC Monitor. 05 August 2015. http://www.racmonitor.com/rac-enews/1868-observation-notices-coming-soon-to-every-hospital.html (site visited September 21, 2016).
The writer says CMS’s giving hospitals one year to comply with the NOTICE Act is probably too generous to hospitals (and patients get hurt in the meantime when they’re not notified of their observation status). Mr. Hirsch also questions the necessity of the act given that the Two-Midnight Rule would convert persons spending 48 hours in observation into inpatients.
Hirsch, Ronald. “Senate Hearing Confused by Outdated Rules.” The RAC Monitor. 06 August 2014. http://www.racmonitor.com/rac-enews/1707-senate-hearing-confused-by-outdated-rules.html (site visited September 21, 2016).
The author claims that the 2014 Inpatient Prospective Payment System (IPPS) Final Rule’s prohibition on observation stays is irrelevant given the already-existing Two-Midnight Rule, which on paper at least does not allow for observation stays beyond two days. The fact that there are statistics, the writer says, of people being held in observation beyond two days is an example of hospitals breaking the rules of the existing Two-Midnight Rule. “The horror stories of huge hospital bills from observation stays, as promulgated by several media sources, were from cases prior to the introduction of the two-midnight rule and have contributed to current misunderstandings about the relative cost of inpatient admission versus observation care as an outpatient.”
Hirsch, Ronald. “State Observation Notices: Why Can’t They all just Get Along?” The RAC Monitor. 14 October 2015. http://www.racmonitor.com/rac-enews/1897-state-observation-notices-why-can-t-they-all-just-get-along.html (site visited September 21, 2016).
The author notes that not all outpatient services given to an observation patient are billed under observation services. The writer then goes on to explain the various kinds of observation notices required by individual states such as Maryland and Vermont. In writing about Vermont, Mr. Hirsch states that because observation stays are not part of the Critical Access Hospital bundles, previous observation patients admitted during the same stay as an inpatient would still receive an observation notice for their previous observation care. The NOTICE Act would have been appropriate in the pre-Two-Midnight World.
Hirsch, Ronald. “The MOON and Two-Midnight Rule Questions Continue.” 22 February 2017. http://www.racmonitor.com/rac-enews/2276-the-moon-and-two-midnight-questions-continue.html (site visited March 10, 2017).
The writer addresses whether a person on observation status transferred to another hospital and placed in observation status can count that time at another hospital towards the requirement that hospitals provide the MOON after a patient has been in observation status for two days. The writer says that it isn’t clear whether this time at another hospital should be counted.
Hockenberry, Jason M.; Mutter, Ryan; Barrett, Marguerite; Parlato, Judy; et. al. “Factors Associated with Prolonged Observation Services Stays and the Impact of Long Stays on Patient Cost.” Health Services Research. 18 December 2013. 49:3. http://onlinelibrary.wiley.com/doi/10.1111/1475-6773.12143/full (site visited September 20, 2016). Pages 893–909.
“Patient cost sharing for most OS [(observation service)] stays of less than 24 hours is lower than the Medicare inpatient deductible. However, prolonged OS stays potentially increase this cost sharing.”
“Hospital Patients Must Know If They're Admitted or Not.” The Hartford Courant. 03 October 2014. http://www.courant.com/opinion/editorials/hc-ed-patients-must-be-told-hospital-admittance-st-20141003-story.html (site visited September 16, 2016).
The author explains the Connecticut law requiring hospitals to notify patients of their observation status. The editorial writer also mentions Rep. Courtney’s bill eliminating the observation exclusion from Part-A SNF services be passed by Congress.
Huffman, Charlotte & Smith, Mark. "Observation status: It can cost you." WFAA, http://www.wfaa.com/news/local/investigates/observation-status-it-can-cost-you/406583944 (last visited Sept. 13, 2017).
Provides a link to the Center for more information.
“In fiscal 2014, more than 633,000 Medicare beneficiaries were given observation status for at least one or more of their three-day hospital stays, according to an analysis by the Office of Inspector General (OIG) at the U.S. Dept. of Health and Human Services.”
“Several authorities said hospitals continue to put more patients on observation status, in part, because they’re under increased scrutiny by federal inspectors.”
“Inpatient or Observation: Knowing the Difference Could Save You Thousands.” Care Conversations. https://careconversations.org/inpatient-or-observation-knowing-difference-could-save-you-thousands (site visited September 19, 2016).
The article’s author discusses the NOTICE Act as well as the Center’s self-help packets for persons wishing to appeal their observation status designation.
“Inpatient vs. Observation: Will it Ever be Clear?” AHC Media. 01 August 2015. https://www.ahcmedia.com/articles/135802-inpatient-vs-observation-will-it-ever-be-clear (site visited January 9, 2017).
The authors write the following advice: “The two-midnight rule bases patient status on time in the hospital rather than clinical criteria, but case managers should still use decision-support software to determine if patients meet medical necessity criteria for an inpatient stay. Take a proactive approach and educate physicians up front about the level of detail the documentation should include to reflect the patient’s conditions and intensity of service, and give them prompts in the medical record about what they should include.”
Jackson, Blair. “Observation Stays Coalition Comments On Revised Medicare Outpatient Observation Notice.” Provider Magazine. 02 September 2016. http://www.providermagazine.com/news/Pages/2016/0916/Observation-Stays-Coalition-Comments-On-Revised-Medicare-Outpatient-Observation-Notice.aspx (site visited September 21, 2016).
The Observation Stays Coalition, a group of about 30 organizations including the American Health Care Association, takes issue in its comments on a CMS proposed rule regarding the MOON with the access to care issues that observation status creates. The author also notes that CMS has the statutory authority under existing law to count all time under observation care towards the three-day stay requirement for Part-A-covered SNF care.
Jaffe, Ina. “For Hospital Patients, Observation Status Can Prove Costly.” NPR. 04 September 2013. http://www.npr.org/sections/health-shots/2013/09/04/218633011/for-hospital-patients-observation-status-can-prove-costly (site visited September 15, 2016).
The article describes observation status. The writer quotes the Center’s Toby Edelman as stating that denying Part A coverage of a SNF because a hospital called a person an outpatient makes little sense given that the quality of care for observation and inpatients is the same. Ms. Edelman then describes the Center’s lawsuit to overturn observation status.
Jaffe, Susan. “$18 For A Baby Aspirin? Hospitals Hike Costs For Everyday Drugs For Some Patients.” Kaiser Health News. 30 April 2012. http://khn.org/news/observational-care/ (site visited September 15, 2016).
The writer highlights the out-of-pocket Part B costs observation patients are stuck with when they are not considered inpatients at an acute hospital. The author quotes the Center’s Gill Deford, who says that CMS is driving the observation stays because they’re concerned about saving money.
Jaffe, Susan. “Advocates Head To Court To Overturn Medicare Rules For Observation Care.” Kaiser Health News. 03 May 2013. http://khn.org/news/lawsuit-challenges-observation-rules-in-medicare/ (site visited September 15, 2016).
In addition to mentioning the lawsuit that sought to overturn observation status that came before a Hartford federal court, the article also mentions that 1-800-Medicare scripts do not tell patients they have the option of appealing their observation status. The Center’s Judy Stein is quoted telling the writer that beneficiaries calling the help line are often told there isn’t anything they can appeal since the decision to admit a patient is the hospital’s, not CMS’s.
Jaffe, Susan. “Congress Overwhelmingly Approves Bill Bolstering Medicare Patients’ Hospital Rights.” Kaiser Health News. 29 July 2015. http://khn.org/news/congress-overwhelmingly-approves-bill-bolstering-medicare-patients-hospital-rights/ (site visited September 15, 2016).
The author discusses the out-of-pocket costs faced by observation patients and the passage of the NOTICE Act. The article includes comments by the Center’s Toby Edelman, who discusses the limitations of such a notice given that beneficiaries cannot challenge their being labeled as observation patients.
Jaffe, Susan. “Controversy Erupts over Medicare Observation Care Requirements.” USA Today. 11 June 2016. http://www.usatoday.com/story/news/2016/06/11/kaiser-controversy-erupts-over-medicare-observation-care-requirements/85753660/ (site visited September 14, 2016).
The author discusses the MOON, but states that the draft MOON was written with a 12th-grade reading level. Vice chairman for emergency services at Ochsner Health System in New Orleans states that the notice should also inform patients that the decision described on the notice is not always final.
Jaffe, Susan. “FAQ: Hospital Observation Care Can Be Costly For Medicare Patients.” Kaiser Health News. 29 August 2016. http://khn.org/news/observation-care-faq/ (site visited September 14, 2016).
The article discusses the out-of-pocket costs patients face as a result of observation status. The author also quotes the Center’s Toby Edelman, who recommends asking clinicians once one’s admitted of one’s observation or inpatient status. She also provides options for SNF patients who find out they cannot receive Part A coverage for their SNF stay.
Jaffe, Susan. “Federal Judge Throws Out Lawsuit Over Hospital Observation Care.” Kaiser Health News. 23 September 2013. http://khn.org/news/federal-judge-throws-out-lawsuit-over-hospital-observation-care/ (site visited September 15, 2016).
The article describes the Center’s losing its lawsuit against CMS. The Center’s Ali Bers talks about the decision’s placing much of responsibility for observation status on the hospital and its physicians and not on CMS even though the agency is in charge of ensuring that hospitals meet their obligations.
Jaffe, Susan. “Fighting Observation Status.” The New York Times. 10 January 2014. http://newoldage.blogs.nytimes.com/2014/01/10/fighting-observation-status/ (site visited September 13, 2016).
The author describes the Two-Midnight Rule and how patients can increase their likelihood of being admitted under the rule as an inpatient. The article quotes the Center’s Terry Berthelot recommending that patients get their “regular physician” to talk to the hospital about getting the patient admitted as an inpatient.
Jaffe, Susan. “HHS Inspector General Scrutinizes Medicare Observation Care Policy.” Kaiser Health News. Kaiser Health News. 30 July 2013. http://khn.org/news/ig-report-observation-care/ (site visited September 15, 2016).
“Medicare patients’ chances of being admitted to the hospital or kept for observation depend on what hospital they go to — even when their symptoms are the same, notes a federal watchdog agency in a report to be released today, which also urges Medicare officials to count those observation visits toward the three-inpatient-day minimum required for nursing home coverage.”
Jaffe, Susan. “Hospitals Required To Tell Patients Of Observation Care Status.” Connecticut I-Team. 30 September 2014. http://c-hit.org/2014/09/30/hospitals-required-to-tell-patients-of-observation-care-status/ (site visited September 16, 2016).
The author discusses the NOTICE Act. The writer also quotes the Center’s Terry Berthelot stating that such a notice could be misleading because the notice states that the patient “may” have to pay for their skilled nursing services if they’re given an observation designation.
Jaffe, Susan. “Medicare Covers Less When a Hospital Stay is an Observation, Not an Admission.” The Washington Post. 08 September 2014. https://www.washingtonpost.com/national/health-science/medicare-covers-less-when-a-hospital-stay-is-an-observation-not-an-admission/2014/09/08/9c609544-2d5c-11e4-9b98-848790384093_story.html (site visited September 19, 2016).
The author writes of Medicare’s attempts to create some demonstration projects that would waive the three-day hospitalization stay requirement for Part-A-covered inpatient status. Furthermore, the writer describes what observation care covers and how patients can find out if they’ve received this designation.
Jaffe, Susan. “Medicare May Be Overpaying Hospitals For Short-Stay Patients.” Kaiser Health News. 20 May 2014. http://khn.org/news/medicare-observation-care-overpaying-hospitals-for-short-stays/ (site visited September 15, 2016).
The author highlights the $5 billion overpayments Medicare gave hospitals when it suspended the Two-Midnight Rule for 18 months. The writer then mentions the AHA’s belief that this $5 billion figure is inflated. Additionally, Sean Cavanaugh is quoted as saying that CMS is considering ways to remove the three-day hospitalization requirement for certain Part A services.
Jaffe, Susan. “Medicare Releases Draft Proposal for Patient Observation Notice.” Kaiser Health News. 15 June 2016. http://khn.org/news/medicare-releases-draft-proposal-for-patient-observation-notice/ (site visited September 14, 2016).
The author highlights the out-of-pocket costs faced by patients as a result of observation status and the facets of the draft MOON, including its using language equivalent to a 12th grade reading level. Rep. Doggett comments that the MOON neither fulfills the spirit or intent of the NOTICE Act.
Jaffe, Susan. “Medicare Seeks To Cut Number Of Seniors Denied Nursing Home Coverage After Hospital Stays.” Kaiser Health News. 10 August 2012. http://khn.org/news/medicare-seniors-nursing-home-observation-care/ (site visited September 15, 2016).
The author highlights CMS’s three-year demonstration project in which administrators would have sought input on such things as how many days and which diagnoses qualify the patient for inpatient status. The Center’s Toby Edelman is quoted as saying that observation status does not make sense because an inpatient designation should be based on the care needs of patients not on billing concerns.
Jaffe, Susan. “Medicare Seeks To Limit Number Of Seniors Placed In Hospital Observation Care.” Kaiser Health News. 03 May 2013. http://khn.org/news/cms-offers-new-rule-for-medicare-observation-care/ (site visited September 15, 2016).
The article describes the Two-Midnight Rule. Toby Edelman of the Center states that the rule is problematic because the proposal made categorization dependent on the amount of time spent in an observation unit and not about the kinds of services that are performed in an acute hospital.
Jaffe, Susan. “Medicare To Delay Enforcement Of New Observation Rule.” Kaiser Health News. 27 September 2013. http://khn.org/news/medicare-to-delay-enforcement-of-new-observation-rule/ (site visited September 15, 2016).
The writer describes’ CMS’s intent to delay enforcement of the Two-Midnight Rule until January 2014. The author also describes the hospital industry’s concerns that the rule is confusing and patient advocates’ concerns that the rule harms seniors.
Jaffe, Susan. “Patients Held for Observation Can Face Steep Drug Bills.” USA Today. 01 May 2012. http://usatoday30.usatoday.com/money/industries/health/drugs/story/2012-04-30/drugs-can-be-expensive-in-observation-care/54646378/1 (site visited September 22, 2016).
A Duluth, Minnesota woman is told she’s an observation patient and must pay large out-of-pocket costs for her hospital care. Unfortunately, Medicare did not have any rules at the time requiring hospitals to inform patients of their being in observation.
Jaffe, Susan. “Protecting California’s Seniors From Surprise Hospital, Nursing Home Bills.” Kaiser Health News. 29 August 2016. http://khn.org/news/protecting-californias-seniors-from-surprise-hospital-nursing-home-bills/ (site visited September 14, 2016).
CA’s legislature passed a MOON of its own. Unlike the MOON with its 24 hour observation stay qualifier for the notice, the even less specific CA notice would require that hospitals issue this notice as soon as the patient receives their observation status and would apply to all insurances.
Jaffe, Susan. “Rep. Courtney Pushes Bill To Expand Medicare Coverage Of Nursing Home Stays.” Kaiser Health News. 09 August 2012. http://khn.org/news/rep-courtney-pushes-bill-to-expand-medicare-coverage-of-nursing-home-stays/ (site visited September 15, 2016).
The writer describes Rep. Courtney’s attempts to build up support among his constituency for his bill that would get rid of observation status. The article mentions the Center’s litigation at the time challenging the legality of observation status.
Jaffe, Susan. “Study: Hospital Observation Stays Increase 25 Percent In 3 Years.” Kaiser Health News. http://khn.org/news/study-hospital-observation-stays-increase-25-percent-in-3-years/ (site visited September 15, 2016).
The author describes the gerontology Brown University study findings (published in the June 2012 edition of Health Affairs) in which there were spikes in observation stays and decreases in the number of inpatient readmissions.
Jaffe, Susan. “You’re Being Observed in the Hospital? Patients with Private Insurance Better Off Than Seniors.” Kaiser Health News. 11 September 2014. http://khn.org/news/youre-being-observed-in-the-hospital-patients-with-private-insurance-are-better-off-than-seniors/ (site visited September 15, 2016).
The author looks at Medicare vs. other insurers and highlights the effects observation status has on SNF care. The writer also looks at how Medicare is experimenting with pilot models that follow the example of private insurers and exempt beneficiaries from the three-day requirement.
Jaquith, Hanna. “Clement: What Medicare is Doing to Limit Observation Status.” The Advisory Board. 28 May 2013. https://www.advisory.com/daily-briefing/2013/05/28/clement-what-medicare-is-doing-to-limit-observation-status (site visited September 22, 2016).
Brian Clement of the Physician Executive Council stated that the Two-Midnight Rule helps hospitals because it clarifies who should be an inpatient and who should be in observation. He also says that the Inpatient Prospective Payment System proposed rule that partially concerns the Two-Midnight Rule does not go far enough and qualify observation patients for Part-A-covered post-acute services.
Kadereit, Bill. “Positive News for Medicare Beneficiaries.” National Retiree Legislative Network. http://www.nrln.org/documents/Email%20Notice%20Act%203.1.15.pdf (site visited September 15, 2016).
Following the clearing of the NOTICE Act from the Ways and Means Committee, the writer commends Rep. Doggett and others for introducing and champing the bill. The author then describes certain elements of the NOTICE Act, such as the requirement that the notice be given between 24 and 36 hours following the patient’s being admitted into observation.
Kanne, Judith L. “Medicare Patients: Beware of ‘Observation’ Status in Hospitals.” Reuters. 11 June 2014. http://www.reuters.com/article/us-medicare-patients-observation-idUSKBN0EM1US20140611 (site visited September 15, 2016).
The author describes observation care and the out-of-pocket costs patients face. The writer also mentions the spike in observation stays in recent years.
Kennedy, John. "Court Keeps Medicare Patient Class Action Alive." Law360 (Feb. 8, 2017), https://www.law360.com/articles/890107/court-keeps-medicare-patient-class-action-alive.
Provides an overview of the action. “A Connecticut federal judge declined Wednesday to dismiss class allegations against the U.S. Department of Health and Human Services, finding that Medicare patients claiming an agency policy forced them to overpay for hospital care sufficiently showed they were denied their constitutional right to due process.”
Konrad, Walecia. "Medicare billing: Hospital “observation” can cost you." CBS News (Nov. 13, 2017). https://www.cbsnews.com/news/medicare-billing-hospital-observation-can-cost-you/.
"We get calls on this every day," said Toby Edelman, senior policy attorney with the Center for Medicare Advocacy. "In one of our cases, the person was there for 39 days. How can you be an outpatient for 39 days?" She explained that hospitals often classify patients with the observation or outpatient status to avoid aggressive Medicare audits and high readmission penalties.
Last July a federal judge in Connecticut certified the class in the lawsuit as all Medicare recipients who have been hospitalized and received observation services as outpatients since Jan. 1, 2009. This may eventually open the door for patients like Mary Higgins to file an appeal. "For now, I just hope she continues to improve and gets better before her money runs out," said Titus. "We just don't know what the future holds."
For more information on observation status and what to do if you've been affected by it, check out the Center for Medicare Advocacy's self-help packet.
Kowalczyk, Liz. “Beth Israel Deaconess Settles with US for $5.3m.” The Boston Globe. 30 July 2013. https://www.bostonglobe.com/lifestyle/health-wellness/2013/07/29/beth-israel-deaconess-medical-center-pays-million-settle-medicare-overbilling-charges/ryLU35esqdCqmSo1GCw5xI/story.html (site visited September 22, 2016).
The author describes a fine a Boston-area hospital had to pay because Recovery Audit Contractors’ audits uncovered that, in the auditors’ view, the hospital admitted patients as inpatients when the auditors believed they should have been admitted into observation. The hospital commented that it had been trying quite a bit to properly bill Medicare for services, but noted that on occasion determining inpatient vs. observation status can be a very subjective guessing game.
Kowalczyk, Liz. “Hospital’s Medicare Billing Examined.” The Boston Globe. 06 February 2012. http://www.bostonglobe.com/metro/2012/02/06/federal-investigators-subpoena-six-years-medicare-records-from-beth-israel-deaconess/ZYDqRnjSILGZW3JzwmEpsK/story.html (site visited September 16. 2016).
Ms. Kowalczyk writes about the investigation into whether Beth Israel Deaconess Medical Center overbilled Medicare includes a discussion of observation status’ out-of-pocket costs to patients. Part of the investigation looked into whether patients were properly labeled as inpatients or observation patients.
Kowalczyk, Liz. “Status of Medicare Patients Can Result in Huge Bills.” The Boston Globe. 25 August 2013 https://www.bostonglobe.com/lifestyle/health-wellness/2013/08/24/despite-long-hospital-stays-some-patients-never-admitted-leaving-them-with-huge-bills/UjD0YLmFZE2XMtBee6KveN/story.html (site visited September 19. 2016).
The author describes an observation patient who had to pay for various costs at the hospital. Furthermore, the writer says that patients may not digest being told by a case worker that they’re an observation patient because of the stress of the hospital situation, drugs, etc.
Kutscher, Betsy. “Hospitals Start Self-Audits of Observation Stays.” Modern Healthcare. 18 June 2013. http://www.modernhealthcare.com/article/20130618/NEWS/306189985 (site visited September 13, 2016).
As observation stays increase, hospitals research whether trends exist concerning observation status classification. One hospital pilot program examines not only potential overutilization of observation stays, but also the financial impact of decreasing the number of observation stays.
Kuttner, Robert. “Medicare ‘Cost-Savings’ Rules Pushing Costs onto Patients.” The Boston Globe. 18 July 2013. https://www.bostonglobe.com/opinion/2013/07/18/medicare-disguised-form-rationing/W6sF7dkTW08oGOlSekzlFI/story.html (site visited September 19, 2016).
The author describes a time when his 99-year old mother was admitted to a Boston hospital after falling, admitted as an observation patient, and asked to pay a 20 percent copay for her outpatient stay. Mr. Kuttner then decries Medicare’s shifting further costs onto patients. Even though his mother had supplementary insurance to cover these Part B copayments, most Medicare patients, the writer adds, do not have such an option.
Lade, Diane C. “Being in a Hospital 'under Observation' vs. Admitted Can Limit Vital Benefits for Seniors.” Sun Sentinel. 21 February 2017. http://www.sun-sentinel.com/features/fl-medicare-hospital-observation-stays-limit-coverage-20170214-story.html (site visited February 23, 2017).
The writer quotes the Center’s lawyer, Toby Edelman, who explains that observation status is a billing designation and not a clinical one. The author also had the following to add: “In 2015, the Florida Health Care Association was among those that pushed for a state law requiring that hospitals include a patient’s observation status in the discharge paperwork.” Ms. Lade then goes on to explain a patient’s observation notification rights under the NOTICE ACT to receive the notification called the MOON.
Lade, Diane C. "Being in a hospital 'under observation' vs. admitted can limit vital benefits for seniors." Sun Sentinel (Feb. 21, 2017). http://www.sun-sentinel.com/features/fl-medicare-hospital-observation-stays-limit-coverage-20170214-story.html.
“This issue is so preposterous to me. It’s a Medicare billing issue, not a care issue,” said Toby Edelman, senior policy attorney for the Center for Medicare Advocacy. “The stories we get are completely ridiculous.”
“Sean Cavanaugh, a CMS deputy administrator, in 2015 told members of the Senate Special Committee on Aging that the agency was “pushing very hard” on hospitals to better educate their patients about observation status, according to news stories. But he said it was unclear if CMS could mandate hospitals do more.”
“The Center for Medicare Advocacy has started a public education campaign, advising seniors to ask if they’re on observation status as soon as the hospital staff suggests they stay for additional testing or monitoring. If the answer is yes, the center advises patients to ask their doctor if they should be admitted as inpatients.”
“This month, the Center for Medicare Advocacy received a federal judge’s permission to proceed with a class action lawsuit that would allow Medicare patients the right to appeal their observation classifications. The plaintiffs, including a Delaware woman who was denied nursing home coverage despite being hospitalized for six nights, were forced to spend up to $30,000 each for their post-hospital care.”
“Edelman said she was particularly troubled by the latest Inspector General’s findings that hospitals are billing for a large number of long observation stays, adding to patients’ in-hospital costs as well as shutting them out from having their nursing home rehabilitation care coverage.”
“People may have to pay many thousands of dollars upfront,” Edelman said. “They’re told to go to the nursing home and bring their checkbook.”
Lane, Erin. “Follow These Steps to Compare Your Observation Use to Your Peers.’” The Advisory Board. 09 October 2015. https://www.advisory.com/research/cardiovascular-roundtable/cardiovascular-rounds/2015/10/hospital-benchmark-generator-observation-use (site visited September 22, 2016).
The writer mentions the 96 percent increase in observation stays between 2006 and 2013. She also talks about the Advisory Board tool, the Benchmark Generator, that uses financial, operational, and quality measures and gives hospitals a benchmark comparison to similar hospitals available in the tool.
“Lawmakers, Hospitals Call for Delay of 'Two Midnight' Rule.” The Advisory Board. 26 September 2013. https://www.advisory.com/daily-briefing/2013/09/26/lawmakers-hospitals-call-for-delay-of-two-midnight-rule (site visited September 22, 2016).
“More than 100 House members and the American Hospital Association (AHA) are urging federal officials to delay a controversial rule on Medicare inpatient admissions that is set to take effect on Oct. 1.” The author also mentions a judge’s dismissing the Center’s lawsuit challenging the legality of observation status.
Marso, Andy. “More Debate Ahead on Medicare ‘Observation Stays.’” Kansas Health Institute. 04 August 2015. http://www.khi.org/news/article/more-debate-on-medicare-observation-stays-ahead (site visited September 19, 2016).
In discussing Congress’ passage of the NOTICE Act, the author quotes Debra Zehr, LeadingAge’s president and chief executive officer, saying that the Act is a step in the right direction in that it provides more information to patients, but it does not resolve the coverage issues that result from the three-day hospitalization requirement for Part-A coverage.
Mason, Diana. “The Unintended Consequences of the ‘Observation Status’ Policy.’” JAMA. 19 November 2014. 312:19. http://jama.jamanetwork.com/article.aspx?articleid=1935109 (site visited September 19, 2016).
The author mentions the steep, out-of-pocket costs patients without Part B are stuck with when they’re in observation care. The writer then suggests limiting the amount a patient would have to pay under observation care and waiving or reducing the three-day stay requirement for inpatient services.
Mathews, Anna Wilde. “Check Hospital Tab.” The Wall Street Journal. 05 February 2012. http://www.wsj.com/articles/SB10001424052970204652904577196823084944622 (site visited September 16, 2016).
The writer describes the out-of-pocket costs faced by observation patients. The author quotes the Center’s Toby Edelman, who urged observation patients to work with their physician to try to have their status changed while they’re in the hospital.
“Medicare Tries to Limit the Use of Observation Status.” The Advisory Board. 06 May 2013. https://www.advisory.com/daily-briefing/2013/05/06/medicare-tries-to-limit-the-use-of-observation-status (site visited September 13, 2016).
The author mentions the American Hospital Association’s challenge of the legality of observation status. Regarding the Two-Midnight Rule, the Center’s Toby Edelman is quoted saying that the rule doesn’t make sense because time determines the designation, not the procedure or the patient’s needs.
“MedPAC Approves Draft Proposal to Get Rid of the Two-Midnight Rule.” The Advisory Board. 06 April 2015. https://www.advisory.com/daily-briefing/2015/04/06/medpac-approves-draft-proposa (site visited September 13, 2016).
MedPAC urged CMS to drop the Two-Midnight Rule because it incentivizes hospitals to hospitalize patients. The Committee also recommended notifying patients when they were in observation status and not an inpatient. Furthermore, MedPAC recommends “updating government auditing programs to target reviews at hospitals that have a high number of short patient stays.”
“Members Ask: How Can our Hospital Succeed under the Two-Midnight Rule?” The Advisory Board. 25 October 2013. https://www.advisory.com/daily-briefing/2013/10/25/members-ask (site visited September 22, 2016).
The writer advises hospitals to review the processes that are present at admission in light of the Two-Midnight Rule. The new rule provides an opportunity to review the new rule as well as when observation and inpatient admissions are most appropriate.
Mesure, Shelly. “Beware of Hospital Observation Loopholes.” McKnight’s. 07 December 2012. http://www.mcknights.com/rehab-realities/beware-of-hospital-observation-lout-of-pocketholes/article/271800/ (site visited September 13, 2016).
Ms. Mesure describes the effect of observation status on patients’ out-of-pocket expenses. She then issues a call to action for people to contact Congress to solve the problem.
Meyerson, Steven J. “Beyond the Two-Midnight Rule.” RAC Monitor. 17 June 2015. http://www.racmonitor.com/rac-enews/1847-beyond-the-two-midnight-rule.html (site visited September 21, 2016).
The Two-Midnight Rule makes an arbitrary distinction between inpatients and observation patients that is often based on an assessment of available hospital staff and subjective factors that the physician can decide. The author calls for throwing out the Two-Midnight Rule and instituting a rule that says that anyone who stays in a hospital overnight is an inpatient.
Miller, Mark. “The Medicare Quirk That Can Cost You Thousands.” Money. 29 September 2016. http://time.com/money/4512889/medicare-cost-observation-status/ (site visited November 20, 2016).
The author discusses the NOTICE Act and includes the Center’s Toby Edelman discussing the need for the MOON notice to have an appeals process. She goes on to advocate for counting all time in the hospital towards the three-day requirement for Part A SNF coverage.
“Moody's: Two-Midnight Rule Will Cost Hospitals.” The Advisory Board. 17 March 2014. https://www.advisory.com/daily-briefing/2014/03/17/moodys-two-midnight-rule-will-cost-hospitals (site visited September 22, 2016).
According to Moody’s, the Two-Midnight Rule could have reduced the average hospital reimbursement per case by $3-4,000. Moody’s acknowledges that there is a silver lining in this rule in that it offers hospitals better clarity regarding proper patient classifications.
Mongan, Emily. “CMS Resumes Two-Midnight Rule Audits.” 13 September 2016. McKnight’s. http://www.mcknights.com/news/cms-resumes-two-midnight-rule-audits/article/522345/ (site visited September 14, 2016).
The author mentions that CMS resumed Two-Midnight Rule audits after temporarily suspending the audits in November 2015 in order to ‘“improve standardization.”’
Mongan, Emily. “Court Paves Way for Fight Over Inpatient Stays, SNF Coverage.” McKnight’s. 15 February 2017. http://www.mcknights.com/news/court-paves-way-for-fight-over-inpatient-stays-snf-coverage/article/638119/ (site visited February 23, 2017).
The article discusses an ongoing Center for Medicare Advocacy case: “Debate over Medicare beneficiaries' hospital stays being classified as inpatient — a designation crucial to receive skilled nursing coverage — will continue, thanks to a court's order last week.
The U.S. District Court for the District of Connecticut's Feb. 8 order allows Alexander v. Cochran to proceed, citing ongoing disputes over whether the Centers for Medicare & Medicaid Services criteria or a physician's judgment is the best way to designate a stay as inpatient or outpatient.
Alice Bers, an attorney with the Center for Medicare Advocacy who represented the plaintiffs in the case, said in a statement that the court's decision allowing the case to proceed ‘is an important step in the establishment of a fair process for patients who risk having to pay thousands of dollars for necessary medical care or forgo that care altogether.’
The court now has two issues to mull: whether CMS' criteria — which some argue push hospitals to put more patients on observation status — influences how patients' stays are designated, and whether beneficiaries have a protected interest in how their stays are classified.”
Mongan, Emily. “NOTICE Act Implementation Pushed Back to Fall.” McKnight’s. 08 August 2016. http://www.mcknights.com/news/notice-act-implementation-pushed-back-to-fall/article/514748/ (site visited September 21, 2016).
CMS states that it decided to delay implementation of the NOTICE Act and its MOON in order to allow the hospital industry enough time to put business and systems processes in place that would implement the law’s requirements.
Mongan, Emily. “Obama Signs NOTICE Act into Law.” McKnight’s. 10 August 2015. http://www.mcknights.com/news/obama-signs-notice-act-into-law/article/431903/ (site visited September 13, 2016).
Explains the NOTICE Act’s elements and the President’s signing the bill into law.
Mongan, Emily. “Observation Stay Bill Hits CA Governor's Desk.” McKnight’s. 29 August 2016. http://www.mcknights.com/news/observation-stay-bill-hits-ca-governors-desk/article/519124/ (site visited January 10, 2017).
The author writes of a California bill that Governor Brown would eventually sign informing patients of their observation status. The law also requires a certain nurse-to-patient ratios for hospitals that have separate units for observation status patients.
Morgan, David. “Medicare Beneficiaries Sue US over Hospital Stays.” Reuters. 03 November 2011. http://www.reuters.com/article/usa-medicare-lawsuit-idUSN1E7A21ST20111103 (site visited September 16, 2016).
Mr. Morgan discusses the Center’s Bagnall v. Sebelius lawsuit against CMS seeking to overturn observation status. The author interviews the Center’s Judy Stein who mentions the financial burdens that beneficiaries are left with as a result of their receiving this designation.
Mullaney, Tim. “Dedicated Observation Stay Units Could protect Nursing Home Benefits, Save Hospitals $1 Billion Annually, Researchers Say.” McKnight’s. 06 December 2013. http://www.mcknights.com/news/dedicated-observation-stay-units-could-protect-nursing-home-benefits-save-hospitals-1-billion-annually-researchers-say/article/324391/
Mr. Mullaney discusses the December 2013 Health Affairs article that proposes specialized, more-efficient hospital observation units.
Mullaney, Tim. “Dramatic Drop in Hospital Inpatient Readmissions Cannot Be Explained By a Shift to Observation Stays, Researchers Find.” McKnight’s. 25 April 2014. http://www.mcknights.com/news/dramatic-drop-in-hospital-inpatient-readmissions-cannot-be-explained-by-a-shift-to-observation-stays-researchers-find/article/344136/ (site visited September 13, 2016).
“Hospitals achieved a notable reduction in their inpatient readmissions rate in 2012 and were not using observation stays to game the system, according to Centers for Medicare & Medicaid Services researchers. That means it is possible increases in the quality of care and care coordination are working in reducing readmissions.”
Mullaney, Tim. “MedPAC Considers Eliminating Observation Stays.” McKnight’s. 10 November 2014. http://www.mcknights.com/news/medpac-considers-eliminating-observation-stays/article/382167/ (site visited September 13, 2016).
Discusses certain MedPAC members’ stating that observation status is not working as it was originally intended, has had severe consequences for patients, and should be eliminated.
Mullaney, Tim. “MedPAC Debates End of Observation Stays.” McKnight’s. 01 December 2014. http://www.mcknights.com/news/medpac-debates-end-of-observation-stays/article/386104/ (site visited September 13, 2016.)
“Observation status should be eliminated as a way of categorizing hospital patients, members of the Medicare Payment Advisory Commission proposed at a Nov. 6 meeting… Other commissioners said making observation stays into inpatient stays could wreak havoc with billing. Some urged limiting Recovery Audit Contractor activity, which some say aggressively targets hospitals with high inpatient rates.”
Nanda, Jyotirmaya. “Challenging the Status Quo: Solutions to the Hospital Observation Stay Crisis.” American Hospital Association. 20 May 2015. http://www.aha.org/advocacy-issues/testimony/2015/150520-tes-agingcom-obsvstatus.pdf (site visited September 19, 2016). P. 3.
A physician stated before the Senate Aging Committee that some Department of Justice “attorneys have started using the False Claims Act (FCA) to challenge physicians’ inpatient admission decisions.” These attorneys have in turn countered that some inpatient admissions were not reasonable and necessary and that any unreasonable claim is fraud against the government.
Nesbit, Dave. “Elder Care: Consequences of Improper Hospital Admission and Observation Policy.” The Sentinel. 26 January 2017. http://cumberlink.com/news/local/neighbors/elder_care/elder-care-consequences-of-improper-hospital-admission-and-observation-policy/article_847d7e79-47ed-59c4-8937-dcdb78c8220c.html (site visited February 23, 2017).
The article provides an explanation of observation status and states that the MOON should be provided to observation-status patients as notification of their status beginning in March 2017. The author also explains the following: “Pennsylvania’s Hospital Observation Status Consumer Notification Act of Oct. 22, 2014 became effective April 20, 2015. The act requires a hospital to notify a patient who has received hospital services for 23 consecutive hours if the patient has not been ‘formally admitted.’
Pennsylvania has not enforced this act with regulations, although the New York Times reported that New York has regulations to fine hospitals up to $5,000 per violation.”
“New law: Hospitals Must Notify Medicare Patients of Observation Status. Here's What You Need to Know.” The Advisory Board. 10 August 2015. https://www.advisory.com/daily-briefing/2015/08/10/hospitals-must-notify-medicare-patients-of-observation-status-heres-what-you-need-to-know (site visited September 22, 2016).
The AARP and the American Hosptial Association gave reserved praise for the NOTICE Act because it offered transparency to patients. The AARP says it does not, however, resolve “all the issues associated with observation care.”
Noel-Miller, Claire and Lind, Keith D. “Is Observation Status Substituting for Hospital Readmission?” AARP Public Policy Institute. 13 November 2016. http://blog.aarp.org/2015/11/13/is-observation-status-substituting-for-hospital-readmission/ (site visited September 19, 2016).
This AARP study used data from Medicare’s OptumLabs Data Warehouse to highlight increasing observation rates and simultaneously decreasing hospital readmission rates.
“NOTICE ACT Goes into Effect Regarding Medicare ‘Observation Status.’” Generations of New York. 10 August 2016. https://generationsofnewyork.com/2016/08/10/notice-act-goes-into-effect-regarding-medicare-observation-status/ (site visited September 21, 2016).
The article describes observation status and the out-of-pocket costs patients face as a result of their receiving this designation. The author states that the notification of observation status must be given no sooner than 24 hours and no later than 35 hours after observation hours begins.
Nguyen, Anthony H. “Observation Status Placement: Medical Judgment or Medical Criteria.” Wolters-Kluwer. 23 January 2015. https://lrus.wolterskluwer.com/news/health-law-daily/observation-status-placement-medical-judgment-or-medicare-criteria (site visited September 19, 2016).
The article’s author discusses the history of the Barrows v. Burwell case, the Center’s lawsuit challenging observation status.
O'Donnell, Jayne. “Hospitals, Regulators Spar over In-Patient Care Policy.” USA Today. 13 July 2014. http://www.usatoday.com/story/news/nation/2014/07/13/observation-versus-in-patient-medicare-hospital-fight/12486711/ (site visited September 15, 2016.)
The article discusses observation status and its effects on patients’ out-of-pocket costs and interviews the Center’s Judy Stein, who discusses the harm this causes patients. The article mentions the AHA’s suit claiming that observation status is arbitrary.
“Observation v. Inpatient? Amid Audits, Hospitals Struggle to Decide.” The Advisory Board. 09 August 2012. https://www.advisory.com/daily-briefing/2012/08/09/observation-v-inpatient (site visited September 22, 2016).
The author describes the Brown University study showing increased observation rates and decreased inpatient readmissions between 2007 and 2009. The article then states that hospitals will lose a great deal of income when patients are placed in observation and not considered inpatients.
Pace, Mary Beth. “Another MOON Shot: What the Form Means for Hospitals.” RAC Monitor. 17 August 2016. http://www.racmonitor.com/rac-enews/2128-another-moon-shot-what-the-form-means-for-hospitals.html (site visited September 21, 2016.)
The author writes that patients need to know right away that they’re in observation and that being notified 24 hours after their observation stay starts could lead the patients to unknowingly face out-of-pocket costs. She also notes that some hospitals are considering using care management clinicians and social workers to deliver the MOON and verbally explain it to the patient or representative.
Pace, Mary Beth. “Patient Observation and the MOON.” 07 December 2016. http://www.racmonitor.com/rac-enews/2222-patient-observation-and-the-moon.html (site visited January 9, 2017).
The author mentions a previous RAC Monitor article featuring Dr. Ronald Hirsch’s critique of the Center’s observation-status-related infographic. Furthermore, the article discusses the MOON and some of the information it would provide to patients.
“Patient Status Can Wind Up Costing Seniors.” The Hartford Courant. 11 November 2013. http://www.courant.com/opinion/editorials/hc-ed-knowing-hospital-status-can-avoid-big-bils-20131111-story.html (site visited September 16, 2016).
The author advocates that the CT legislature pass a bill notifying patients of their observation status. The writer also mentions Rep. Courtney’s bill that would qualify observation status patients for Part-A-covered SNF care.
“Patients Sue over Hospital 'Observation Status.’” The Advisory Board. 04 November 2011. https://www.advisory.com/daily-briefing/2011/11/04/patients-sue-hhs-over-observation-status-rules (site visited September 22, 2016).
The article’s author discusses the Center’s lawsuit that attempted to challenge CMS’s, as the Center’s Judy Stein put it in the article, denying promised coverage to beneficiaries According to Stein, CMS and hospitals are not statutorily obliged to apply observation status and that CMS has the authority to set standards for when observation status is appropriate.
Pear, Robert. “New Medicare Law to Notify Patients of Loophole in Nursing Home Coverage.” The New York Times. 06 August 2016. http://www.nytimes.com/2016/08/07/us/politics/new-medicare-law-to-notify-patients-of-lout-of-pockethole-in-nursing-home-coverage.html (site visited September 16, 2016).
The author explains observation status and the MOON. The article quotes the Center’s Judy Stein stating that the law is an important first step, but that Congress and CMS need to do more to protect beneficiaries.
Pecci, Alexandra Wilson. “Patient Notification of Observation Status is Now Law.” Health Leaders Media. 12 August 2015. http://www.healthleadersmedia.com/quality/patient-notification-observation-status-now-law# (site visited September 21, 2016).
The author writes of the NOTICE Act’s being signed into law and the delay of the Two-Midnight Rule until the end of 2015. In addition to explaining that such a notification explain the financial implications for an observation status label, the writer says that Vermont would begin using its own notice in December 2015.
Pecquet, Julian. “Beneficiary Advocates Hit Medicare with Second Class Action Suit.” The Hill. 03 November 2016. http://thehill.com/policy/healthcare/191707-beneficiary-advocates-hit-medicare-with-second-class-action-suit (site visited September 16, 2016).
The writer mentions the Center’s lawsuit seeking to overturn observation status. Also, the author discusses Democratic-sponsored legislation that sought to overturn observation status.
Petrovich, Holly. “NOTICE Act Movement Earns Association Approval.” McKnight’s. 24 June 2015. http://www.mcknights.com/news/notice-act-movement-earns-association-approval/article/422669/ (site visited September 13, 2016).
“The American Health Care Association and National Center for Assisted Living commended the Senate Finance Committee Wednesday for moving forward a bill that would change appointment of “observation status” for hospital patients.”
Premack, Paul. “Cut Hospital Bills by Understanding Your Admission Status.” My San Antonio. 17 October 2016. http://www.mysanantonio.com/life/life_columnists/paul_premack/article/Knowing-Medicare-Status-can-Save-you-Money-9977409.php (site visited November 20, 2016).
The author discusses the NOTICE Act and recommends that patients ask doctors when they’re admitted if they’re an inpatient or an observation patient. He also recommends asking doctors to reclassify any observation status and to appeal if this doesn’t work.
Primeau, Debi. “Make the Two-Midnight Rule a Friend, Not a Foe.” RAC Monitor. 06 May 2015. http://www.racmonitor.com/rac-enews/1824-make-the-two-midnight-rule-a-friend-%20not-a-foe.html (site visited September 21, 2016).
Since hospitals do not properly document why a patient is in observation or is an inpatient, RACs oftentimes are able to successfully audit and penalize hospitals for improperly admitting someone as an inpatient. The author encourages such documentation to include the expected length of the patient’s stay, the severity of the patient’s signs and symptoms, possible negative patient reactions to treatment, expected duration of stay, and include a plan of care.
Provine, Tony. “Guest: Depending on Observation Status, Medicare May Not Cover a Hospital Stay.” The Seattle Times. 25 December 2013. http://www.seattletimes.com/opinion/guest-depending-on-observation-status-medicare-may-not-cover-a-hospital-stay/ (site visited September 16, 2016).
The author states that observation status was originally conceived of only being applied for stays lasting less than 24 hours. The author then explains the Two-Midnight Rule and mentions the self-help, appeal packets that the Center offered at the time on its website.
Radelat, Ana. “Courtney Took a Moderate Path in 113th Congress.” The Connecticut Mirror. 26 December 2014. http://ctmirror.org/2014/12/26/courtney-took-a-moderate-path-in-113th-congress/ (site visited September 16, 2016).
The article discusses Rep. Courtney’s bill that would have qualified observation status patients for SNF care. The article paraphrases someone from the Center stating that Courtney’s bill, although not the only bill confronting observation status and facing an uphill battle of its own, was the one most likely to pass Congress.
Rakover, Jeffrey. “Two-Midnight Rule resurrects Age-Old Question: Can Observation Care Be Profitable?” The Advisory Board. 27 January 2014. https://www.advisory.com/research/cardiovascular-roundtable/cardiovascular-rounds/2014/01/two-midnight-rule-resurrects-age-old-question-can-observation-care-be-profitable (site visited September 22, 2016).
The author states that the Two-Midnight Rule will result in revenue losses for hospital and that long-term observation stays are not compensating hospitals for the revenue losses they suffered as inpatient admissions dropped
Rau, Jordan. “Medicare Penalizes Hospitals in Effort to Reduce the Number of Patients Readmitted.” The Washington Post. 23 September 2016. https://www.washingtonpost.com/national/health-science/medicare-penalizes-hospitals-in-effort-to-reduce-the-number-of-patients-readmitted/2013/09/23/9f33fcfe-fdea-11e2-9711-3708310f6f4d_story.html (site visited September 15, 2016).
“Every hospital in the District and five in the Virginia suburbs will be penalized in the second round of Medicare’s campaign to reduce the number of patients readmitted to hospitals within a month, according to federal records.” Howard University Hospital, for instance, received the highest penalty in the DMV region at the time, but would receive a lesser penalty at the time of the article’s publication because of investments in health care IT. The writer describes why hospitals serving low-income populations are more likely to be hit with readmissions penalties.
Rau, Jordan. “Rehospitalization Rates Fell In First Year Of Medicare Penalties.” Kaiser Health News. 09 December 2013. http://khn.org/news/rehospitalization-rates-fell-in-first-year-of-medicare-penalties/ (site visited September 15, 2016).
Not only have rehospitalization rates fallen in the first year that readmission penalties were in place, but data also showed rising observation status rates as well.
Regan, Tim. "SNFs Renew Push to Change Three-Day Stay Rule." Skilled Nursing News (Oct. 24, 2017). https://skillednursingnews.com/2017/10/snfs-renew-push-change-three-day-stay-rule/.
- The Observation Stays Coalition—a group formed in 2010 that includes organizations such as the American Health Care Association (AHCA) and AARP—is leading the charge against the three-day stay rule, which requires patients to undergo a three-day hospital stay as an inpatient before Medicare will pay for subsequent SNF care.
- There have been some recent efforts to fix the problem. A 2015 law known as the NOTICE Act requires hospitals to inform patients receiving observation care for more than 24 hours that they are outpatients, not inpatients.
- Another hope is that legislation currently making its way through Capitol Hill could address the problem. Lawmakers on both sides of the aisle in the U.S. House of Representatives and Senate have backed legislation that would make observation stays count toward the three-day stay rule.
Rice, Sabriya. “No, Hospitals Aren't Gaming Readmissions with Observation Claims, HHS says.” Modern Healthcare. 24 February 2016. http://www.modernhealthcare.com/article/20160224/NEWS/160229957/no-hospitals-arent-gaming-readmissions-with-observation-claims-hhs (site visited September 14, 2016).
CMS points to research showing that drops in readmission rates does not have to do with rising observation stays and instead has more to do with improved care delivery in acute hospitals.
Roland, Elisa . "Fighting this Hidden Hospital Policy Helped My Mom Save Thousands of Dollars." Reader’s Digest (Sept. 20, 2017). https://www.rd.com/health/conditions/save-money-fighting-hidden-hospital-policy/.
But that chilly November day I learned a sneaky little policy—among other secrets health insurance company won’t tell you—that keeps over 50,000 Medicare patients a year from going to rehab, according to a 2015 AARP Public Policy Institute report. It’s called “observation status.”
According to the Philadelphia Inquirer, Medicare beneficiaries had nearly 620,000 hospital stays for a minimum of three nights that were considered under “observation status” and therefore didn’t quality for benefits.
“People call in dire situations, and we have to tell them there’s no way to challenge this,” said Alice Bers, litigation director of the Center for Medicare Advocacy, which brought the lawsuit with Justice in Aging and a law firm, Wilson Sonsini Goodrich & Rosati. “Now we can tell them, ‘You’re a member of the class, so stay tuned.'”
I had to advocate for my parents:
I immediately put in a second appeal with Livanta.
I made sure I was loud and clear about both my parents’ situation. Letting them know that my father’s macular degeneration and age made him unsuitable to be
Rosin, Tamara. “Medicare Releases Draft of Observation Notice That Will Take Effect Aug. 6.” Becker’s Hospital Review. 15 June 2016. http://www.beckershospitalreview.com/legal-regulatory-issues/medicare-releases-draft-of-observation-notice-that-will-take-effect-aug-6.html (site visited September 19, 2016).
The author writes that the draft MOON was written at a 12th-grade reading level, despite the NOTICE Act’s statutory requirement that the written notice be comprehensible. The author then describes the complaints of one of the NOTICE Act’s authors, Rep. Doggett: the law does not distinguish between Part-A- and Part-B-covered services and does not explain to patients why they were placed in observation.
Ross, Michael A.; Hockenberry, Jason M.; Mutter, Ryan; Barrett, Marguerite; et. al. “Protocol-Driven Emergency Department Observation Units Offer Savings, Shorter Stays, And Reduced Admissions.” Health Affairs. December 2013. 32:12. P. 2149-2156. http://content.healthaffairs.org/content/32/12/2149.abstract#aff-1 (site visited September 13, 2016).
The authors explain that there are two types of observation patients: those that need to be observed for a short period of time and those that are labeled as such because of CMS’s cost-shifting, readmission penalties. They describes type 1 observation units’ greater efficiency and, if more widely utilized, their leading to greater utilization of observation services in hospitals.
Ruiz, Patricia K. “Observation Status: Attempting to Fill the Gap in Medicare Coverage, Reimbursement Rules.” Wolters Kluwer Law & Business White Paper. January 2015. http://health.wolterskluwerlb.com/wp-content/uploads/2014/03/Observation-Status.pdf (site visited September 19, 2016).
The author explains that hospital clinicians need more training in order to better understand the nuances between inpatient and outpatient care. The white paper also discusses providers’ concerns with the Two-Midnight Rule and suggests ways to reform observation care.
Salzman, Eric and Schecter, Anna R. “Law Aims to Protect Medicare Patients from Surprise Hospital Bill.” NBC News. 8 March 2017. http://www.nbcnews.com/news/us-news/law-aims-protect-medicare-patients-surprise-hospital-bill-n730686 (site visited March 10, 2017).
The article’s authors discusses Rep. Courtney’s introducing a bill in 2017 that would count all time spent in observation status towards a Part A-qualified SNF stay. The writers then quote the Center’s Judy Stein’s discussion of the NOTICE Act as well as an individual who fought her husband’s observation status and had it changed to an inpatient one. Had she not succeeded, "‘It would have been a major hardship,’ she said. She and her husband, who later passed away, would've owed as much as $30,000 for 30 days of rehab. ‘We would have been broke.’"
Schieszer, John. "Improving Emergency Department Care for Older Adults with Cancer." Oncology Nurse Advisor (Nov. 9, 2017). https://www.oncologynurseadvisor.com/general-oncology/ed-care-for-older-adults-with-cancer/article/706623/2/.
Allison Lipitz-Snyderman, PhD, an assistant attending outcomes research scientist at Memorial Sloan Kettering Cancer Center, in New York, New York, and co-author of the study, said since not all acutely ill patients in the ED require inpatient admission for a safe discharge, observation status can provide an important alternative. “Observation status can help align patients' needs with the appropriate level and intensity of care. For cancer patients, little is known about how much observation status is used. The purpose of this study was to better understand cancer patients' use of observation status and the potential moving forward,” explained Dr Lipitz-Snyderman.
The authors noted that observation status may be a viable and possibly a better alternative than inpatient admission for patients presenting to the ED with specific conditions such as chest pain, new-onset atrial fibrillation, chronic obstructive pulmonary disease (COPD) exacerbation, and transient ischemic attack.
Schorsch, Kristen. “Hospitals Play with Medicare Patients' Status.” Modern Healthcare. 13 October 2013. http://www.modernhealthcare.com/article/20131013/INFO/310139984/hospitals-play-with-medicare-patients-status (site visited September 21, 2016).
The author, a writer at Crain's Chicago Business, describes the increase in observation status among Chicago-area hospitals in the aggregate, at specific hospitals in Chicago, and nationwide.
Sheehy, Ann M. “A Renewed Call to Overhaul Hospital Observation Care.” The Hospital Leader. 16 January 2017. http://blogs.hospitalmedicine.org/Blog/a-renewed-call-to-overhaul-hospital-observation-care/ (site visited March 10, 2017).
Regarding the NOTICE Act: “There is no doubt transparency is important, and patients should be informed when hospitalized as outpatients instead of as inpatients. But the wisdom of the NOTICE Act essentially stops there. First, Medicare beneficiaries are notified after they have been hospitalized, certainly after they could make an informed decision about accepting observation care. Second, patients or their representative must sign the form, yet it is unclear if this signature holds the patient financially liable, particularly if signed by a representative with no legal authority over the patient’s financial affairs. Third, the form does nothing for a patient’s right to appeal their status. And because observation is a billing distinction, the field at the top of the form requiring hospitals to specify why the patient is not an inpatient is circular reasoning, as patients are outpatients only when they fail to meet Medicare inpatient billing criteria.”
Sheehy, Ann M. Hospitalized but Not Admitted: Characteristics of Patients with “Observation Status” at an Academic Medical Center.” JAMA Internal Medicine. 25 November 2013. http://archinte.jamanetwork.com/article.aspx?articleID=1710122 (site visited September 22, 2016).
In a study of around 44,000 hospital stays, 10 percent were observation stays that averaged 33.3 hours. Of this 10 percent, around 1,100 distinct diagnosis codes were used when billing. The article shows that these observation stays mostly led the hospital to lose money because reimbursement did not cover costs.
Sheehy, Ann M.; Caponi, Bartho; Gangireddy, Sreedevi; Hamedani, Azita; et. al. “Observation and Inpatient Status: Clinical Impact of the 2-Midnight Rule.” Journal of Hospital Medicine. 14 February 2014. 9:4. http://onlinelibrary.wiley.com/doi/10.1002/jhm.2163/full (site visited September 22, 2016). P. 203–209.
The study’s authors predicted a net decrease of 7.4 percent in national inpatient designations as a result of the Two-Midnight Rule.
Sheehy, Ann M.; Graf, Ben K.; Gangireddy, Sreedevi; Formisano, Roger; et al. ‘“Observation Status’ for Hospitalized Patients Implications of a Proposed Medicare Rules Change.” JAMA Internal Medicine. 25 November 2013. 173:21. http://archinte.jamanetwork.com/article.aspx?articleID=1731964&utm_source=Silverchair%20Information%20Systems&utm_medium=email&utm_campaign=ArchivesofInternalMedicine%3AOnlineFirst08%2F26%2F2013 (site visited September 15, 2016). P. 2004-2006.
In a study of all observation and inpatient encounters at the University of Wisconsin Hospital between July 1, 2010, and December 31, 2011, the effects of the proposed Two-Midnight Rule were charted and compared to observation and inpatient data. The article highlights the greater financial incentives hospitals have to keep a patient for more than two midnights in order to qualify for a larger share of reimbursement funds. Total reimbursement without the proposed rule would have been $4.8 million for observation patients with greater ≥2 day stays and total reimbursement with the proposed rule would have been $787.4 million.
“Skewed Data? Observation Stays Rise as Readmissions Drop.” The Advisory Board. 11 June 2013. https://www.advisory.com/daily-briefing/2013/06/11/skewed-data-observation-stays-rise-as-readmissions-drop (site visited September 22, 2016).
Harvard professor Ashish Jha asks this about the rise in observation stays and the drop in readmissions: have hospitals really done a good job with care quality improvements and did this lead to a drop in inpatient readmissions or were people merely reassigned into observation? The American Hospital Association says that the rise in observation stays should not obscure the care improvements hospitals have made in recent years.
Smith, Tammy. “Your Health: Observation Status and Medicare.” Richmond Times-Dispatch. 15 February 2015. http://www.richmond.com/life/health/article_9644c6f8-ae4a-5f3a-a1d0-267fc2015327.html (site visited September 19, 2016).
The author describes a bill before the Virginia legislature that would have required doctors to inform patients if they are admitted into observation or as inpatients. Kathy Pryor, an attorney with the Virginia Poverty Law Center, refers to information provided by the Center which advises observations patients in the hospital to try to change their status and advises patients in Skilled Nursing Facilities to inform the facilities that they are trying to appeal their having received an observation status designation.
Sisto, Daniel. “Medicare's Observation Status is Unfair to Patients.” Times Union. 19 September 2016. http://www.timesunion.com/opinion/article/Medicare-s-observation-status-is-unfair-to-4244626.php (site visited September 19, 2016).
The author, the president of the Healthcare Association of New York, writes the following: “Lawsuits have been filed to challenge these policies. The federal government has been inundated with negative feedback yet nothing indicates these harmful practices will be changed. Meanwhile, the Medicare denials generate money for the government, consultants and auditors at the expense of seniors and providers.”
Smith, Sherry. “Rules for Seniors Under "Observation Status," Violate Medicare Beneficiaries' Constitutional Rights.” Santa Monica Observer. 06 October 2016. http://www.smobserved.com/story/2016/10/05/health/rules-for-seniors-under-observation-status-violate-medicare-beneficiaries-constitutional-rights/2051.html (site visited November 20, 2016).
The author describes the effects of observation status on patients’ out-of-pocket costs and calls on Congress to pass a law that would prevent such harm in the future. She goes on to say that observation status is quite the subjective label.
Span, Paula. “In the Hospital, but Not Really a Patient.” The New York Times. 22 June 2012. http://newoldage.blogs.nytimes.com/2012/06/22/in-the-hospital-but-not-really-a-patient/ (site visited September 13, 2016).
“Discusses the costs patients face as a result of their being given an observation status designation. The Center states that fixing observation status does not necessarily have to require congressional action.”
Span, Paula. “Two Kinds of Hospital Patients: Admitted, and Not.” The New York Times. 29 October 2013. http://newoldage.blogs.nytimes.com/2013/10/29/two-kinds-of-hospital-patients-admitted-and-not/ (site visited September 14, 2016).
The author highlights observation status and its effects on patient out-of-pocket costs, the Two-Midnight Rule, and advocates’ push to get rid of the three-day inpatient stay qualifier for Part A coverage. The article quotes the Center’s Judy Stein discussing the effects of observation status.
Span, Paula . "Under ‘Observation,’ Some Hospital Patients Face Big Bills." The New York Times. (Sept. 1, 2017). https://www.nytimes.com/2017/09/01/health/medicare-observation-hospitals.html.
“People call in dire situations, and we have to tell them there’s no way to challenge this,” said Alice Bers, litigation director of the Center for Medicare Advocacy, which brought the lawsuit with Justice in Aging and a law firm, Wilson Sonsini Goodrich & Rosati. “Now we can tell them, ‘You’re a member of the class, so stay tuned.’”
“The Medicare appeals system is far from perfect,” said Ms. Bers. Patients routinely lose in the early stages, and though their odds of success improve if they pursue the appeal to an administrative law judge, many drop out before that point.
Stein, Judith. “Medicare Beneficiaries Hurt by System’s Rules.” The Boston Globe. 28 July 2013. https://www.bostonglobe.com/opinion/letters/2013/07/27/medicare-beneficiaries-hurt-system-rules/VwLESxdhJTdSNygNgWc3yM/story.html (site visited January 10, 2017).
In a response to an op-ed, the Center’s Judy Stein highlights the Center’s class-action lawsuit to challenge observation status and patients’ barriers to challenging this classification.
Stein, Judith. “More Needs To Be Done To Address 'Observation Status.'” The Hill. 11 July 2014. http://thehill.com/blogs/congress-blog/healthcare/211881-more-needs-to-be-done-to-address-observation-status (site visited September 16, 2016).
The author urges other states to follow the lead of CT, MD, and NY and require hospitals to provide notice when a patient is admitted as an observation patient. She also discusses the Courtney/Brown bills in Congress at the time that would have “required to count all time spent in the hospital toward the three-day qualifying hospital stay required for nursing home coverage.”
Stein, Judith and Courtney, Joe. “A Healthcare Bill that Everyone Can Agree On.” The Hill. 08 March 2017. http://thehill.com/blogs/congress-blog/healthcare/322974-a-healthcare-bill-that-everyone-can-agree-on (site visited March 10, 2017).
The authors describe a 90-year-old Conn. resident’s $7,700 rehabilitation center bill following his being in a car accident. The article discusses the March 2017 implementation of the MOON observation notice as well as the 2017 reintroduction of Rep. Courtney’s bill that would count time spent in observation towards a Part-A-covered stay in a Skilled Nursing Facility.
“Study: The Drop in Readmissions Isn't Because of More Observation Stays. It's Real.” The Advisory Board. 26 February 2016. https://www.advisory.com/daily-briefing/2016/02/26/study-drop-in-readmissions-isnt-because-of-more-observation-stays (site visited September 23, 2016).
The article discusses the early 2016 New England Journal of Medicine article by Zuckerman, et. al in which the authors contend that the inpatient readmissions reduction program is working and that the drop in readmissions had little to do with patients being placed in observation. Ashish Jha, who comments in the article, wonders whether return visits to an emergency department could be contributing to the drop in readmissions.
Teichert, Erica. “Supporting Prime in False Claims Suit, AHA Says Allegations Undermine Physician Judgment.” Modern Healthcare. 26 October 2017. http://www.modernhealthcare.com/article/20161026/NEWS/161029939 (site visited November 20, 2016).
The article’s writer discusses the American Hospital Association’s saying in a False Claims Act case that the Justice Department’s second guessing hospital admission decisions has led to “troubling changes in medical treatment” that have raised costs for Medicare beneficiaries.
Tergesen, Anne. “Beware Medicare's 'Observation' Status.” The Wall Street Journal. 19 October 2013. http://www.wsj.com/news/articles/SB10001424052702303376904579135732284488114 (site visited September 16, 2016).
The author describes the out-of-pocket costs patients face as a result of their being given an observation status. The author mentions the Center’s Toby Edelman stating that observation patients should try to get their status changed while they are still in the hospital.
Tergesen, Anne. “‘Observation care’ Woes Continue.” MarketWatch. 22 October 2013. http://blogs.marketwatch.com/encore/2013/10/22/observation-care-woes-continue/ (site visited September 16, 2016).
The author describes the Courtney observation status bill before Congress at the time. The writer also paraphrases the Center’s Judy Stein stating that the costs of SNF care that come with observation status lead patients to forgo care because they cannot afford it. The Center’s Toby Edelman is also quoted as advising observation patients to try to get their status changed to that of an inpatient while they’re still in the hospital.
“The Observation Status Problem: Impact and Recommendations for Change.” Society of Hospital Medicine Public Policy Committee. July 2014. http://www.hospitalmedicine.org/Web/Advocacy/Key_Issues/Observation_Status/Web/Advocacy/Observation_Status.aspx?hkey=4b746745-7a0b-4295-a842-375bc28fe64a (site visited September 21, 2016).
The authors recommend educating providers so that they can proficiently apply observation and inpatient statuses as well as reforming the Recovery Audit Contractor system to ensure that hospitals are not unnecessarily pressured to make admission decisions that are solely based on the threat of audits. Furthermore, the authors recommend counting time spent in observation care towards the three-day requirement for Part-A-covered skilled nursing care.
Thompson, Connie. “Hospital Admission or Observation? New Law Requires Disclosure So You Know the Difference.” Komo News. 02 February 2017. http://komonews.com/news/consumer/hospital-admission-or-observation-new-law-requires-disclosure-so-youll-know (site visited February 3, 2017).
The author discusses a Seattle-area resident’s experiences with being deemed an observation-status patient and the out-of-pocket costs that come with this status. The writer also discusses the NOTICE Act’s requiring hospitals to notify patients of their observation status after their being an observation outpatient for more than 24 hours.
“‘Too Many Patients Fall Victim to Medicare's 'Observation Status' Loophole.” Lancaster Online. 23 September 2016. http://lancasteronline.com/opinion/editorials/too-many-patients-fall-victim-to-medicare-s-observation-status/article_14651758-80fe-11e6-8fb2-436b92c1732e.html (site visited November 20, 2016).
The authors highlight a doctor’s feeling that doctors should decide inpatient status without interference or pressure from the government. They then go on to urge observation patients with high out-of-pocket costs to contact their congressional representatives.
“Under Observation? Some Hospitals Admit Just 10% of Patients.” Advisory Board. 31 July 2013. https://www.advisory.com/daily-briefing/2013/07/31/under-observation-some-hospitals-admit%20just-10-of-patients (site visited September 22, 2016).
“A new report from the HHS Office of Inspector General (OIG) found major variation in how Medicare patients were classified at different hospitals in 2012, with some facilities claiming more than 70% of patient stays as inpatient stays and other facilities claiming just 10% in the same category.”
“Unfair to Patients: Medicare’s Three-Day Rule.” The Boston Globe. 15 August 2016. https://www.bostonglobe.com/opinion/editorials/2016/08/14/unfair-patients-medicare-three-day-rule/oR1bXWmTYpcEoJnmY6PqWN/story.html (site visited September 22, 2016).
The article features the story of a 84-year old woman admitted to a Wisconsin hospital who thought she was admitted as inpatient, but instead was admitted into observation. After discussing the upcoming implementation of the NOTICE Act, the article’s author describes an interview with the Center’s Toby Edelman who says that providing the MOON might cause further stress for patients when they find they are not admitted as inpatients and might face certain out-of-pocket costs for skilled nursing care and hospital-administered Part-B drugs.
“Use of Observation Status Rises by 34%—and Patients May Suffer.” The Advisory Board. 07 June 2012. https://www.advisory.com/daily-briefing/2012/06/07/use-of-observation-status-rises-by-34-percent-and-patients-may-suffer (site visited September 22, 2016).
Speaking about the Brown University study concerning rising observation stays between 2007 and 2009, Feng Zhanlian says that the rise in observation rates is not a result in the increase in health problems among Americans. The article’s author goes on to discuss the findings of the Brown University study.
Weaver, Christopher; Mathews, Anna Wilde; and McGinty, Tom. “Medicare Rules Reshape Hospital Admissions.” The Wall Street Journal. 01 December 2015. http://www.wsj.com/articles/medicare-rules-reshape-hospital-admissions-1449024342 (site visited September 14, 2016).
The authors’ own original research highlighted that 319 hospitals—10 percent of the nation’s acute hospitals—contributed half of the aggregate number of observation stays from 2010 to 2013. “At the same time, the share of follow-up visits labeled as observation stays rose 156%, accounting for nearly two-thirds of the reduction…Across the roughly 3,500 short-term acute-care hospitals—often referred to as general hospitals—that face the penalty program, the Journal identified a drop in readmission rates of about 9% from 2010 to 2013 for penalty-program conditions. Follow-up observation-stay rates increased about 48%. The rise in observation stays accounted for about 40% of the decline in readmissions, by the Journal’s measure.”
“WSJ: 40% of Reduction in Hospital Readmissions from Jump in Observation Cases.” The Advisory Board. 08 December 2015. https://www.advisory.com/daily-briefing/2015/12/08/forty-percent-of-reduction-in-hospital-readmissions-from-jump-in-observation-cases (site visited September 22, 2016).
“Analysis by the Journal suggests that a large portion of the reduction in readmissions came from reclassifying certain patients as being under observation status—even though in many cases treatment is essentially the same as being an inpatient. The Journal analyzed Medicare payment data from 2010 to 2013. It only tracked readmissions and follow-up observation stays that started with ED visits for all medical conditions currently in HRRP and excluded stays that resulted in transfers to different facilities to guard against double counting. The Journal says six outside experts reviewed its methodology and judged it as sound.”
“What Is Hospital ‘Observation Status’?” 02 December 2015. http://blogs.wsj.com/briefly/2015/12/02/what-is-hospital-observation-status-the-short-answer/ (site visited September 16, 2016).
The article briefly describes observation status, observation units, and the out-of-pocket costs many observation patients face.
“What You Need to Know About 'Observation Status.'” Philadelphia Inquirer. 14 October 2016. http://www.philly.com/philly/health/20161016_What_You_Need_to_Know_About_Observation_Status.html (site visited January 9, 2017).
The author encourages patients to ask about their status once they’re admitted to a hospital and to ask one’s personal physician if he/she agrees with the hospital’s inpatient or observation designation. Furthermore, the piece’s writer highlights some of the out-of-pocket costs that come with an observation-status, hospital designation.
Wolfson, Elijah. “The Dangerous Medicare Loophole of Observation Status.” Aljazeera America. 24 March 2015. http://america.aljazeera.com/articles/2015/3/24/the-dangerous-medicare-loophole-of-observation-status.html (site visited September 19, 2016).
The article quotes a University of Wisconsin internist who discusses the process of changing a patient’s status from inpatient to observation status retroactively. The author also quotes Feng Zhanlian, a Brown University researcher who studies observation status, talking about the explosion in outpatient billing in recent years.
Wood, Sam. “Seniors Socked with Huge Unexpected Bills After Receiving Hospital Observation Care.” The Philadelphia Inquirer. 14 October 2016. http://www.philly.com/philly/health/20161016_Seniors_socked_with_huge_unexpected_bills_after_receiving_hospital_observation_care.html (site visited November 20, 2016).
The author begins with an illustration of the out-of-pocket costs observation patients face when they seek physical therapy in a Skilled Nursing Facility following an observation stay using the story of the costs faced by a Landsdale, PA couple. The Center’s Toby Edelman remarks that, in light of Congress’ passage of the NOTICE Act, she fears Congress will not feel compelled to take any further action on observation status.
Zuckerman, Rachael B.; Sheingold, Steven H.; Orav, E. John; Ruhter, Joel; et. al. “Readmissions, Observation, and the Hospital Readmissions Reduction Program.” The New England Journal of Medicine. 21 April 2016. 374. P. 1543-1551. http://www.nejm.org/doi/full/10.1056/NEJMsa1513024?query=TOC (site visited September 14, 2016).
Using hospital admissions data from 2007 to 2015, the authors conclude that “readmission rates for targeted conditions declined from 21.5% to 17.8%, and rates for nontargeted conditions declined from 15.3% to 13.1%… Stays in observation units for targeted conditions increased from 2.6% in 2007 to 4.7% in 2015, and rates for nontargeted conditions increased from 2.5% to 4.2%.” The authors believe that the drop in readmissions had little to do with placing patients in observation.