NPR Observation Status Story: How Medicare’s Conflicting Hospitalization Rules Cost Me Thousands Of DollarsPosted in Article
On April 20, 2018, Alison Kodjak of NPR published the story of trying to navigate her own Mother’s “Outpatient” Observation Status and follow-up care. After four nights in the hospital, all coded as observation, Alison’s Mother, Catherine Fitzgerald, was discharged, still unable to walk, and in need of follow-up care at a skilled nursing facility, care she was told that Medicare would not cover, because her Mother had not been admitted to the hospital as an inpatient.
“I picked a handful of rehab centers from a list after a quick search of reviews on my iPhone,” said Alison. “One was full, one rejected her because she was listed as "Medicaid pending," and finally, Genesis Healthcare said they would take her — on the condition that I come by with a $12,000 check that day.”
Alison’s story is not new, and not uncommon. Center for Medicare Advocacy Executive Director Judith Stein says in the article “the use of observation status has grown dramatically in the past decade, in part because Medicare has become far more aggressive in going after hospitals the agency said were inappropriately – and expensively – admitting patients who didn't need hospital care.”
Observation status is not about care, it is about money, and it is an outdated coding system. Jonathan Blum, the former Medicare director at CMS, suggests another fix in the article: Get rid of the three-night requirement altogether. "It's really an artifact," he said. "It was put in place as a budgetary control and it was designed when the average length of a hospital stay was seven, eight or nine days."