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Trend: More hospital patients classified as 'observation'

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As Medicare and private health plans get even tougher on which patients can be admitted to hospitals, a growing number of them are being classified as "observation" patients. Typical patients for observational care include those with chest pain, asthma attacks, kidney stones, dehydration, dizziness and mild trauma.

These patients are a step up in case from emergency department diagnosis and treatment, but not classed as having been formally hospitalized. This type of care is typically provided to patients who don't seem well enough to discharge, but clearly aren't well enough to be admitted.

The phenomenon is particularly pronounced among Medicare patients, because hospitals are concerned that if they bill for an inpatient stay not meeting the program's standards, they could be charged with fraud. (Meanwhile, the Recovery Audit Program should soon be barreling down hospitals to make sure cases don't slip by.) In Illinois last year, for example, 320,000 people received observational care, up from 32,000 in 1998.

The observation period is typically about 24 hours. However, if it goes longer, some Medicare patients face serious financial pain; Medicare may refuse to pay for treatments since they're not classified as inpatient care. Worse, hospitals aren't required to tell patients that they're in observational care, which means that they don't know that their medical bills are growing.

To learn more about this trend:
- read this Kaiser Daily Health Policy Report item

Related Articles:
RAC program moves ahead after delay
Lawmakers question California Medicare audits
Study: 40 percent of hospitals expect to owe money to Medicare under RAC

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Comments

This is exactly what happened to my 93-yr-old mom a year ago! Nor was I told (and my mom's dementia was too severe for her to have a conversation about such matters). I regard this as 100% unethical! I appealed to the social workers at the hospital, and I did not see the bill, as they said I would. The hospital must have eaten the bill, which they should.

Come on. Are we willing to do ANYTHING to save a buck--even do stuff that is unfair, unethical??!! The healthcare org and CMS has to have a contract with the patient so that the patient knows what s/he is entitled to, and what s/he is not entitled to. And it has to be up front, not sneaky, like this policy. Who said that Medicare is an efficient system or a model system? If this kind of thing is going on, Medicare is a rip-off system!
CAK

As an ER nurse, I can attest that this ruling is the main chokehold in ER's all over the country. Listen up...this is why YOU are waiting for your turn to be seen in the ER. Insurers rule this country and it's time they took a look at what they are doing to all of us...killing us softly.

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