CMS backs off new observation care rule--for now

The Centers for Medicare & Medicaid Services delayed implementation of a rule that defines observation care cases, citing complaints by the hospital industry that the rules were often confusing. The rule, which was supposed to take effect on Oct. 1, has been moved back to at least Jan. 1. Under the proposal, any patient who stays in the hospital longer than two midnights should be admitted as an inpatient. Medicare will not pay for nursing home care for any patient treated under the current observation care rules, which permit hospitals to keep them under observation for up to three days prior to an admission. However, the observation care rules have been the focal point for auditors, causing the hospital sector to complain about the issue. Medicare auditors will keep tab on hospitals during the 90-day extension period to determine how well they are complying with the rule, but will not issue any financial penalties for those that err. Article