Final analysis

People are often unreasonable, illogical, and self-centered;

Final analysis

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Share Joining the discussion about hospitals' extended use of observation status, the Department of Health and Human Services' Office of Inspector General OIG has issued a memorandum report that describes the nationwide use of observation and Final analysis stays in calendar year OIG reports that more thanMedicare beneficiaries had hospital stays lasting at least three midnights but not including at least three inpatient midnights.

The Problem Many Medicare beneficiaries receiving care in an acute care hospital are classified as observation patients an outpatient categoryeven though the care they receive may be indistinguishable from the care received by patients who are classified as inpatients.

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The consequence for beneficiaries is significant if they need post-hospital care in a SNF. Medicare will not pay for a SNF stay under Part A unless the beneficiary has been classified as an inpatient for at least three consecutive days, not counting the day of discharge.

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One recent call involved an year old woman who was hospitalized with a broken shoulder. Initially admitted as an inpatient, the woman was reclassified by the hospital as an outpatient.

Final analysis

A second recent call involved an year old woman who fractured her shoulder. A third beneficiary, an 89 year-old woman, was hospitalized for three days with pneumonia and sent home.

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She returned to the hospital the next day, having fallen and broken her hip. She remained in the hospital for six days as an "outpatient in bed" and then went to a SNF, paying out-of-pocket for her care.

First, CMS, Congress, and others are concerned about "beneficiaries spending long periods of time in observation stays without being admitted as inpatients," [5] resulting in beneficiaries being ineligible for Medicare coverage of their post-acute stay in a SNF.

Second, CMS is also concerned about "improper payments for short inpatient stays when the beneficiaries should have been treated as outpatients.

The Manual describes the factors a physician should use to determine whether to admit a patient to inpatient status. According to OIG, the Manual directs physicians to consider, as one factor, whether a patient is likely to remain in the hospital for 24 hours.

One set of proposed rules would create time-based presumptions of inpatient status, using two midnights as the benchmark for inpatient admission.

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