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November 26, 2015

Medicare Payment Quirk Grabs Senate Panel’s Attention

Senators on Wednesday mulled the impact of a restriction in Medicare payment policies that has riled both hospitals and patients. When a Medicare patient stays in a hospital under “observation status” the person does not qualify for certain Medicare coverage in a subsequent stay in a nursing home or rehabilitation facility — and may end up paying more in co-payments and drug costs.

The Senate Special Aging Committee on Wednesday led an examination on the coverage quirk, which could come as a surprise to the patient and lead to additional out-of-pocket costs.  CQ HealthBeat’s John Reichard reported that a hospital might admit a patient under “observation” status because the hospital fears that auditors will challenge whether the person should be admitted, throwing the facility’s Medicare reimbursement into doubt.

Separately, a bipartisan duo of Texas Democratic Rep. Lloyd Doggett and Indiana Republican Todd Young introduced a bill this week, which would require hospitals to provide meaningful written and oral notification to patients who are in the hospital ‘under observation’ for more than 24 hours.

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  1. Brendon Shank

    July 31, 2014
    10:38 a.m.

    As hospitalist Ann Sheehy noted at the hearing yesterday, hospitalists — physicians and other caregivers who work in the hospital — are on the front lines of the observation status problem. It’s a major issue that affects nearly 2 million hospitalized Americans every year and costs CMS about $2.5 billion.

    Yesterday, the Society of Hospital Medicine published a new report on observation care with recommendations to improve it.

    You can find it here through SHM’s blog:

    • bibol

      Aug. 15, 2014
      9:15 p.m.

      You act like this is news. I heard about it for over a year

  2. Layla

    July 31, 2014
    1:02 p.m.

    Either this article is not very well written or we are looking at another meaningless fix coming from Congress. This is not a new problem and written notification is NOT a fix. It’s passing the damn buck once again.

  3. Red in a Blue State

    July 31, 2014
    5:09 p.m.

    A useless solution for a problem that doesn’t exist. Hospitals are already providing written notice of Observation status to patients. It’s required in MediCare regs. Congress needs to be scaling back the authority of these contractors to deny payment based on a retrospective review of physician judgment. MediCare regs state that the decision to admit is a complex decision and rests with the attending physician. NOT some nurse working for an auditor who gets a cut of the take.

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    10:32 a.m.

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