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Fighting ‘Observation’ Status

Mon, 01/13/2014 - 10:09am
Susan Jaffe

Every year, thousands of Medicare patients who spend time in the hospital for observation but are not officially admitted find they are not eligible for nursing home coverage after discharge.

A Medicare beneficiary must spend three consecutive midnights in the hospital — not counting the day of discharge — as an admitted patient in order to qualify for subsequent nursing-home coverage. If a patient is under observation but not admitted, she will also lose coverage for any medications the hospital provides for pre-existing health problems. Medicare drug plans are not required to reimburse patients for these drug costs.

The over-classification of observation status is an increasingly pervasive problem: the number of seniors entering the hospital for observation increased 69 percent over five years, to 1.6 million in 2011.

The chance of being admitted varies widely depending on the hospital, the inspector general of the Department of Health and Human Services has found. Admitted and observation patients often have similar symptoms and receive similar care. Six of the top 10 reasons for observation — chest pain, digestive disorders, fainting, nutritional disorders, irregular heartbeat and circulatory problems — are also among the 10 most frequent reasons for a short hospital admission.

Medicare officials have urged hospital patients to find out if they’ve been officially admitted. But suppose the answer is no. Then what do you do?

Medicare doesn’t require hospitals to tell patients if they are merely being observed, which is supposed to last no more than 48 hours to help the doctor decide if someone is sick enough to be admitted. (Starting on Jan. 19, however, New York State will require hospitals to provide oral and written notification to patients within 24 hours of putting them on observation status. Penalties range as much as $5,000 per violation. )

To increase the likelihood of being formally admitted, “get yourself in the door before midnight,” advised Dr. Ann Sheehy, division head of hospital medicine at the University of Wisconsin Hospital in Madison, Wisc. A new Medicare regulation — the so-called “pumpkin rule” — requires doctors to admit people they anticipate staying for longer than two midnights, but to list those expected to stay for less time as observation patients.

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