Emergency room docs struggle with two-midnight rule, observation status

As hospitals across the nation face the complications involved with the two-midnight rule, emergency physicians may experience the most conflicts as they strive to balance patient needs with the federal government requirements for short inpatient stays.

Emergency and internal medicine physicians often struggle to get the right designation and status for the patient, Catherine Polera, M.D., (pictured) chief clinical officer of the division of emergency medicine at Sheridan Healthcare, a national hospital-based, multispecialty practice management company, told FierceHealthcare in an exclusive interview. "They go through a dance and it's not as clear as you might think."

In order to qualify for Medicare reimbursement under inpatient rates, the two-midnight rule requires that physicians deem the patient's condition as serious enough to require at least two overnight stays. Patients who aren't formally admitted may remain under outpatient or observation status--an action that may leave patients with high out-of-pocket expenses. The federal government delayed enforcement of the rule until October at which time hospitals may face financial penalties if auditors determine the hospital could have met the patient's needs in an outpatient setting.

But Polera, who oversees 13 emergency departments (EDs) for Sheridan, says that the determination is difficult even when emergency room (ER) doctors collaborate with hospitalists. As a result , she says, more ER docs write "bridge orders," or temporary orders to facilitate the transfer of care between the ED and the inpatient setting. She notices that physicians hesitate to make direct assignments for fear if they get it wrong, the hospital will face penalties from the Centers for Medicare & Medicaid Services.

"Part of the reason CMS put this rule in is they pay less if the patient goes into observation but more if they are admitted," she says.

The problem, she says, that in many cases Medicare patients, when they learn they may be responsible for a portion of the hospital care, actually sign themselves out against medical advice. "We don't want them to do that. We don't think they are well enough to go home but a lot of patients can't afford to pay for their medicine."

And, typically, those patients who do leave against medical advice often return to the ER sicker than before, according to Polera. "If they had borderline pneumonia, they might come back with full-blown pneumonia and require a two-midnight stay," she says.

The requirements, she says, put physicians in the predicament of balancing financial penalties with patient care. "We tell our doctors and I orient every new provider about CMS, value-based purchasing and the two-midnight rule. ... But I tell them do what is best for the patient's illness. Do not get into the money part. Educate them but stick to your guns about what needs to be done medically," she says.

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