Two Midnights in the Garden of Good and Evil

New rules by the Centers for Medicare and Medicaid Services (CMS) defining inpatient hospital care for Medicare recipients could increase patients’ expenses, decrease hospital reimbursements, and add to ED overcrowding and ED lengths of stay.

The story so far: to better differentiate between hospitalized Medicare recipients who are considered inpatients (Medicare Part A) from those hospitalized for “observation services” (Medicare Part B), CMS issued new rules on August 2, 2013 defining appropriate inpatient admissions as those requiring hospital stays over at least two midnights. The rules further require that the physician accepting the hospitalized patient record upon admission whether or not the patient is expected to remain for two midnights. CMS recently added that the time frame for ED admissions starts when patients begin to receive care there, excluding prior waiting room time or triage.

The new rules went into effect on October 1, 2013 with a 6-month period for CMS administrative contractors to review claims and educate hospital administrators and physician providers. On January 31, 2014, CMS extended these “probe and educate” audits for an additional 6 months, but emphasized that the rules apply throughout this period.

Though many hospitals with available beds have already been formally providing “observation services,” overcrowded urban teaching hospitals lacking observation-unit beds and/or sufficient inpatient capacity have not, even after CMS began reimbursing all hospitals at the outpatient services rate for many 1- or 2-day admissions.

What difference does it make if a hospitalization is considered an inpatient stay or observation services? Medicare reimbursement to hospitals for observation services is less than the inpatient rate, while observation patients frequently have more and higher co-pays and fewer posthospitalization benefits, especially after multiple tests and procedures during a hospital stay of more than 2 days.

Many hospitals, physicians, and patient advocacy groups have expressed unhappiness over the new rules, which may also create additional problems for overcrowded EDs struggling to bring down long lengths of stay as the number of ED patients requiring hospitalization continues to rise. According to the 2013 Rand report on the evolving role of EDs, nearly all of the increases in inpatient admissions between 2003 and 2009 were the result of a 17% increase in unscheduled admissions from EDs (http://www.rand.org/content/dam/rand/pubs/research_reports/RR200/RR280/RAND_RR280.pdf).

To prevent admitted patients from getting stuck in EDs for extended periods, most hospitals long ago gave EPs the ultimate authority to admit patients to the most appropriate inpatient service. Until now though, the admitting physician—the physician who will be caring for the patient upon admission—was not required to determine if the patient would need a two-midnight stay, or possibly be evaluated afterward on the accuracy rate of those predictions. If an admitting physician (or resident, PA or NP working with an attending physician) is not convinced that a patient needs admission or care on that particular service, further delays may now ensue.

Avoiding such prolonged discussions and disagreements was precisely the reason EPs were given the authority to make the final decision to “admit.” To prevent any additional delays under the new rules, perhaps EPs should instead be given the authority to “transfer further care of ED patients to the appropriate inpatient service,” even as the nature and location of that hospital care is being determined. EPs who may mourn the loss of authority to “admit” a patient to any service should recall that, from an ED perspective, “a rose by any other name.…”

To be continued. 

New rules by the Centers for Medicare and Medicaid Services (CMS) defining inpatient hospital care for Medicare recipients could increase patients’ expenses, decrease hospital reimbursements, and add to ED overcrowding and ED lengths of stay.

The story so far: to better differentiate between hospitalized Medicare recipients who are considered inpatients (Medicare Part A) from those hospitalized for “observation services” (Medicare Part B), CMS issued new rules on August 2, 2013 defining appropriate inpatient admissions as those requiring hospital stays over at least two midnights. The rules further require that the physician accepting the hospitalized patient record upon admission whether or not the patient is expected to remain for two midnights. CMS recently added that the time frame for ED admissions starts when patients begin to receive care there, excluding prior waiting room time or triage.

The new rules went into effect on October 1, 2013 with a 6-month period for CMS administrative contractors to review claims and educate hospital administrators and physician providers. On January 31, 2014, CMS extended these “probe and educate” audits for an additional 6 months, but emphasized that the rules apply throughout this period.

Though many hospitals with available beds have already been formally providing “observation services,” overcrowded urban teaching hospitals lacking observation-unit beds and/or sufficient inpatient capacity have not, even after CMS began reimbursing all hospitals at the outpatient services rate for many 1- or 2-day admissions.

What difference does it make if a hospitalization is considered an inpatient stay or observation services? Medicare reimbursement to hospitals for observation services is less than the inpatient rate, while observation patients frequently have more and higher co-pays and fewer posthospitalization benefits, especially after multiple tests and procedures during a hospital stay of more than 2 days.

Many hospitals, physicians, and patient advocacy groups have expressed unhappiness over the new rules, which may also create additional problems for overcrowded EDs struggling to bring down long lengths of stay as the number of ED patients requiring hospitalization continues to rise. According to the 2013 Rand report on the evolving role of EDs, nearly all of the increases in inpatient admissions between 2003 and 2009 were the result of a 17% increase in unscheduled admissions from EDs (http://www.rand.org/content/dam/rand/pubs/research_reports/RR200/RR280/RAND_RR280.pdf).

To prevent admitted patients from getting stuck in EDs for extended periods, most hospitals long ago gave EPs the ultimate authority to admit patients to the most appropriate inpatient service. Until now though, the admitting physician—the physician who will be caring for the patient upon admission—was not required to determine if the patient would need a two-midnight stay, or possibly be evaluated afterward on the accuracy rate of those predictions. If an admitting physician (or resident, PA or NP working with an attending physician) is not convinced that a patient needs admission or care on that particular service, further delays may now ensue.

Avoiding such prolonged discussions and disagreements was precisely the reason EPs were given the authority to make the final decision to “admit.” To prevent any additional delays under the new rules, perhaps EPs should instead be given the authority to “transfer further care of ED patients to the appropriate inpatient service,” even as the nature and location of that hospital care is being determined. EPs who may mourn the loss of authority to “admit” a patient to any service should recall that, from an ED perspective, “a rose by any other name.…”

To be continued. 

New rules by the Centers for Medicare and Medicaid Services (CMS) defining inpatient hospital care for Medicare recipients could increase patients’ expenses, decrease hospital reimbursements, and add to ED overcrowding and ED lengths of stay.

The story so far: to better differentiate between hospitalized Medicare recipients who are considered inpatients (Medicare Part A) from those hospitalized for “observation services” (Medicare Part B), CMS issued new rules on August 2, 2013 defining appropriate inpatient admissions as those requiring hospital stays over at least two midnights. The rules further require that the physician accepting the hospitalized patient record upon admission whether or not the patient is expected to remain for two midnights. CMS recently added that the time frame for ED admissions starts when patients begin to receive care there, excluding prior waiting room time or triage.

The new rules went into effect on October 1, 2013 with a 6-month period for CMS administrative contractors to review claims and educate hospital administrators and physician providers. On January 31, 2014, CMS extended these “probe and educate” audits for an additional 6 months, but emphasized that the rules apply throughout this period.

Though many hospitals with available beds have already been formally providing “observation services,” overcrowded urban teaching hospitals lacking observation-unit beds and/or sufficient inpatient capacity have not, even after CMS began reimbursing all hospitals at the outpatient services rate for many 1- or 2-day admissions.

What difference does it make if a hospitalization is considered an inpatient stay or observation services? Medicare reimbursement to hospitals for observation services is less than the inpatient rate, while observation patients frequently have more and higher co-pays and fewer posthospitalization benefits, especially after multiple tests and procedures during a hospital stay of more than 2 days.

Many hospitals, physicians, and patient advocacy groups have expressed unhappiness over the new rules, which may also create additional problems for overcrowded EDs struggling to bring down long lengths of stay as the number of ED patients requiring hospitalization continues to rise. According to the 2013 Rand report on the evolving role of EDs, nearly all of the increases in inpatient admissions between 2003 and 2009 were the result of a 17% increase in unscheduled admissions from EDs (http://www.rand.org/content/dam/rand/pubs/research_reports/RR200/RR280/RAND_RR280.pdf).

To prevent admitted patients from getting stuck in EDs for extended periods, most hospitals long ago gave EPs the ultimate authority to admit patients to the most appropriate inpatient service. Until now though, the admitting physician—the physician who will be caring for the patient upon admission—was not required to determine if the patient would need a two-midnight stay, or possibly be evaluated afterward on the accuracy rate of those predictions. If an admitting physician (or resident, PA or NP working with an attending physician) is not convinced that a patient needs admission or care on that particular service, further delays may now ensue.

Avoiding such prolonged discussions and disagreements was precisely the reason EPs were given the authority to make the final decision to “admit.” To prevent any additional delays under the new rules, perhaps EPs should instead be given the authority to “transfer further care of ED patients to the appropriate inpatient service,” even as the nature and location of that hospital care is being determined. EPs who may mourn the loss of authority to “admit” a patient to any service should recall that, from an ED perspective, “a rose by any other name.…”

To be continued.