In the annual update to Medicare reimbursement of acute care hospitals for outpatient care (July 8, 2015)[1] the Centers for Medicare & Medicaid Services (CMS) includes proposed revisions to the “Two-Midnight Rule” and its enforcement. If the proposed changes lead to an increased number of patients being formally admitted as inpatients (rather than, as now, … Read more

The traditional Medicare program pays individual health care providers for the specific services and care they provide to beneficiaries and guarantees that patients have “freedom of choice”[1] to select their Medicare providers.  A current focus of Congress and policymakers is changing Medicare payment policy to pay, instead, for episodes of care for beneficiaries.  One issue … Read more

Medicare patients need to be aware that if they were hospitalized after October 1, 2013, hospitals may be contacting them about their bills. Final rules that were published in August 2013 and became effective October 1, 2013 created a new regulatory provision, 42 C.F.R. 414.5, "Hospital services paid under Medicare Part B when a Part … Read more

A study assessing the outcomes of patients who were treated in inpatient rehabilitation facilities (IRFs) with clinically and demographically similar patients who received their post-acute rehabilitation in skilled nursing facilities (SNFs) finds that IRFs provide better care to their patients over a number of outcome measures – IRF patients live longer, spend more days at … Read more

May 21, 2014 The May 20, 2014 hearing on "Current Hospital Issues in the Medicare Program," held by the Health Subcommittee of the House Committee on Ways and Means, was the first Congressional hearing to consider the impact of observation status on hospitalized Medicare patients.[1]  At the hearing, the Center for Medicare Advocacy's Senior Policy … Read more

The Center for Medicare Advocacy has heard that some Medicare beneficiaries believe that new federal rules authorize Medicare to pay for their nursing home care if they are inpatients in a hospital for two midnights.  This belief is NOT CORRECT.  New rules published by the Centers for Medicare & Medicaid Services (CMS) in August 2013, … Read more

Effective October 1, 2013, new rules for inpatient hospital reimbursement under the Medicare program[1] make final two sets of proposed rules that the Centers for Medicare & Medicaid Services (CMS) published in the Spring 2013 – the definition of an inpatient hospital stay based on time[2] and a hospital rebilling option.[3]  Neither set resolves the … Read more

On May 17, 2013, the Centers for Medicare & Medicaid Services (CMS) released an update of Appendix A of the State Operations Manual (SOM) revising its interpretive guidelines for hospital Discharge Planning.[1]  Medicare discharge planning is a Condition of Participation for hospitals, including psychiatric hospitals.[2] Medicare-participating hospitals must make their discharge planning process available to … Read more

As part of the annual update to inpatient hospital reimbursement under the Medicare program, the Centers for Medicare & Medicaid Services (CMS) is again considering observation status.  This time CMS is proposing "a time-based presumption of medical necessity for hospital inpatient services based on the beneficiary's length of stay."  78 Fed. Reg. 27486, 47644 (May … Read more

On July 30, 2012, as part of proposed rulemaking on the outpatient prospective payment system, the Centers for Medicare & Medicaid Services (CMS) asked for public comment on potential policy options related to "observation status."[1] What is Observation Status? Observation status refers to the classification of a patient in an acute care hospital as an … Read more

August 9, 2012 Note to Alert readers: This Posted version contains additional information beyond that in the emailed version. As part of a notice of proposed rulemaking published in the Federal Register on July 30, 2012, the Centers for Medicare & Medicaid Services (CMS) is asking for public comments on potential policy changes related to … Read more

Two websites that help Americans make informed choices about hospitals and nursing homes have been redesigned and will make more information available to the public, CMS announced on July 19, 2012. The two sites – Hospital Compare and Nursing Home Compare – have been enhanced to make navigation easier by users, and have added important … Read more

Hospital case managers and the hospital industry have joined the chorus of those opposed to observation status – a designation that renders a beneficiary ineligible for Medicare-covered skilled nursing facility (SNF) care.  This Alert discusses a recent survey by the American Case Management Association and an amicus brief filed by the American Hospital Association in … Read more

Since 2008, the Center for Medicare Advocacy (the Center) has been reporting that an increasing number of Medicare beneficiaries are being placed in acute care hospital beds for multiple days – receiving medical and nursing care, diagnostic tests, treatments, medications, and food – but are being called "outpatients" in observation status, rather than admitted "inpatients."[1]  … Read more

Reducing hospital readmissions is generating lots of confusion.  The rules are complicated.  In addition, some hospitals, facilities, and health care networks have adopted protocols, and have in place some level of procedures for reduction in hospital readmissions in advance of the requirements set forth in the Affordable Care Act (ACA). In general, the Centers for Medicare … Read more

For several years, reducing rehospitalizations of Medicare beneficiaries has been a key public policy goal, the intent of which is to improve quality of care for beneficiaries and reduce costs for the Medicare program.[1]  Studies have shown that rehospitalizations are common and expensive.  In 2006, for example, nearly one-quarter of nursing home residents (23.5%) were … Read more

The Center for Medicare Advocacy has heard increasingly about beneficiaries throughout the country whose entire stays in a hospital, including stays as long as 14 days, are classified by the hospital as outpatient observation.  In some instances, the beneficiaries' physicians order their admission, but the hospital retroactively reverses the decision.  As a consequence of the classification of … Read more

Coalition Urges Congress to Pass Legislation Safeguarding Medicare Beneficiaries' Skilled Nursing Care For Immediate Release October 21, 2012   Terry Berthelot 860-456-7790 Toby Edelman 202-293-5760 Washington, DC. – A Congressional briefing on "observation status," sponsored by Congressman Joe Courtney (D. CT), was held yesterday afternoon to examine Medicare beneficiaries' being denied Medicare coverage for care … Read more

Hospitalists are defined as physicians who are based full-time in acute care hospitals and who provide care to hospitalized patients.  The past decade has witnessed a rapid growth in hospitals' use of hospitalists, who have been shown to lead to reduced lengths of inpatient hospital stays.  A new study, however, finds that decreased inpatient costs … Read more

Max Richtman, Chair May 20, 2011 The Honorable John Kerry The Honorable Olympia Snowe United States Senate Washington, DC 20510 The Honorable Joe Courtney The Honorable Tom Latham United States House of Representatives Washington, DC 20515 Dear Senators Kerry and Snowe and Representatives Courtney and Latham: The Leadership Council of Aging Organizations (LCAO) – a … Read more

“Observation” is the term used to describe the outpatient status of a patient who is in a hospital, but not as an inpatient. Although the Medicare Manuals limit observation to 24-48 hours, many beneficiaries nationwide are experiencing extended stays in acute care hospitals under observation. A major consequence for beneficiaries of not being classified as … Read more

The Centers for Medicare & Medicaid Services (CMS) has recently issued new rules for Medicare and Medicaid participating hospitals that require written policies protecting patients’ rights to choose their visitors during a stay in the hospital.[1] The landmark rules ensure same-sex partners will have visitation rights, along with friends and other family members.[2] The final … Read more

What are Observation Services? CMS Brochure Favorable Decisions What Should Beneficiaries and their Advocates Do? Continuing Work Being in a hospital bed in a Medicare-participating hospital is no guarantee that a Medicare beneficiary is an inpatient.  In our December 11, 2008 Alert, the Center for Medicare Advocacy described the increasingly common practice of placing Medicare … Read more

Advocates at the Center for Medicare Advocacy are working on a case involving an individual who was in a hospital bed for four days but was never "formally admitted". Instead, the hospital accorded her "observation status". Although Medicare Part B covered her, she has not only not been unable to obtain a determination of Part … Read more

The Medicare statute and regulations authorize payment for skilled nursing facility (SNF) care for a beneficiary who, among other requirements, was a hospital inpatient for at least three days before the admission to the SNF.  The Center for Medicare Advocacy has written before about difficulties in calculating hospital time for purposes of using Medicare's post-acute … Read more

Starting July 1, 2007, hospitals participating in the traditional or Medicare Advantage Medicare program must provide beneficiaries with a new notice of discharge and appeal rights, as discussed in last week’s Weekly Alert. This Weekly Alert describes the new notice as well as beneficiary rights to question and appeal hospital discharge decisions and to receive … Read more

Medicare patients who are hospitalized sometimes find themselves being told to leave the hospital too soon, before they can safely be cared for at home or at a nursing home.[1]    The protections provided for hospital patients in this situation have recently been improved, due to a lawsuit brought by the Center for Medicare Advocacy, Inc. … Read more

The Health Care Financing Administration (HCFA) has made revisions to its Important Message from Medicare notice which all beneficiaries receive upon admission to the hospital and again at the time that the hospital establishes a discharge date. There are two forms of the notice, with essentially the same text: one for fee-for-service beneficiaries and one … Read more