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Under pressure from Medicare, hospitals hold more seniors for observation
Date:6/11/2012

PROVIDENCE, R.I. [Brown University] Nobody wins when patients stay in the hospital unnecessarily, so the federal government in recent years has pushed hospitals to be careful about admitting Medicare recipients as inpatients. The apparent result is that more patients are being "held for observation" instead, according to a new study by Brown University gerontologists. While the shift in how hospitals care for elderly patients in the emergency department may reduce costs to Medicare, it can also increase out-of-pocket expenditures for patients.

"The dual trends of increasing hospital observation services and declining inpatient admissions suggest that hospitals and physicians may be substituting observation services for inpatient admissions perhaps to avoid unfavorable Medicare audits targeting hospital admissions," the researchers wrote in their study published in the June edition of the journal Health Affairs.

In the study, the researchers found that although the rate of observation stays varies widely by state and even by hospital, the nationwide ratio of Medicare patients who are "held for observation" to those who are admitted for inpatient stays increased 34 percent between 2007 and 2009.

Being held for observation, especially for days, can appear to patients to be exactly the same experience as being admitted until they get the bill. 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. Zhanlian Feng, assistant professor of health services, policy, and practice and first author on the paper, said he first thought to conduct the study when he read media reports of patients who were surprised by their higher costs after spending nights in the hospital.

"They never thought they were being treated as outpatients," Feng said.

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Contact: David Orenstein
david_orenstein@brown.edu
401-863-1862
Brown University
Source:Eurekalert  

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