Have you been held for observation at hospitals? How about the people you know? This technique, which the federal government is pushing for, is designed to save the country money. But the result could be money out of your pocket.
In recent years, Washington has pushed hospitals to be careful about admitting Medicare recipients as inpatients. Instead, ERs can hold patients for observation. This is part of the shift in caring for an aging population, which may reduce costs to Medicare, but also create more out-of-pocket expenditures for patients.
In the study, the researchers found that the rate of observation stays varies widely by state and even by hospital. But, across the U.S., the number of Medicare patients “held for observation” compared to those who are admitted for inpatient stays increased 34% 2007 and 2009. I’m sure we all see the trend here.
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Being held for observation (even for days) is much like being admitted — except when the bill arrives. That’s because people held for observation are classified as “outpatients.” Under Medicare rules, outpatients may face higher co-pays for their in-hospital services and won’t be covered for subsequent care in skilled nursing facilities. The study came about after media reports found that patients were surprised by their higher costs after spending nights in the hospital.
This has raised an alarm, and led to an advocacy group filing a class-action suit against the government last year. But nobody really understood if the practice was increasing, which led to this new study. After reviewing Medicare records of 29 million fee-for-service Medicare beneficiaries 65 and older, here were some trends:
— Observation stays rose to 1,019,881 in 2009 from 814,692 in 2007
— Inpatient admissions fell to 22.5 per 1,000 beneficiaries in 2009 from 23.9 per 1,000 in 2007
— Observation stays got an average of seven percent longer over the study period
— In 2009, 44,843 patients were held for observation longer than 72 hours, compared to 23,841 in 2007
What the feds are doing is trying to contain Medicare costs by preventing unnecessary hospitalization. Classifying patients as outpatients, either on their first or second visit, helps hospitals steer clear of counting them as readmitted.
There is not much we can do about this ourselves at the moment. But you could certainly write to your local politician and express concern. Medicare is there to help, so older adults shouldn’t fall through the cracks created by loopholes.