"Observation Status" for Hospitalized Patients: Implications of a Proposed Medicare Rules Change

Division of Hospital Medicine, Department of Medicine, University of Wisconsin School of Medicine and Public Health, Madison.
JAMA Internal Medicine (Impact Factor: 13.12). 08/2013; 173(21). DOI: 10.1001/jamainternmed.2013.9382
Source: PubMed
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    ABSTRACT: In response to growing concern over frequency and duration of observation encounters, the Centers for Medicare and Medicaid Services enacted a rules change on October 1, 2013, classifying most hospital encounters of <2 midnights as observation, and those ≥2 midnights as inpatient. However, limited data exist to predict the impact of the new rule. To answer the following: (1) Will the rule reduce observation encounter frequency? (2) Are short-stay (<2 midnights) inpatient encounters often misclassified observation encounters? (3) Do 2 midnights separate distinct clinical populations, making this rule logical? (4) Do nonclinical factors such as time of day of admission impact classification under the rule? Retrospective descriptive study of all observation and inpatient encounters initiated between January 1, 2012 and February 28, 2013 at a Midwestern academic medical center. Demographics, insurance type, and characteristics of hospitalization were abstracted for each encounter. Of 36,193 encounters, 4,769 (13.2%) were observation. Applying the new rules predicted a net loss of 14.9% inpatient stays; for Medicare only, a loss of 7.4%. Less than 2-midnight inpatient and observation stays were different, sharing only 1 of 5 top International Classification of Diseases, 9th Revision (ICD-9) codes, but for encounters classified as observation, 4 of 5 top ICD-9 codes were the same across the length of stay. Observation encounters starting before 8:00 am less commonly spanned 2 midnights (13.6%) than later encounters (31.2%). The 2-midnight rule adds new challenges to observation and inpatient policy. These findings suggest a need for rules modification. Journal of Hospital Medicine 2014;. © 2014 Society of Hospital Medicine.
    Journal of Hospital Medicine 04/2014; 9(4). DOI:10.1002/jhm.2163 · 2.30 Impact Factor
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    ABSTRACT: Purpose: Recent policy changes in the USA have led to an increasing number of patients being placed into observation units rather than admitted directly to the hospital. Studies of administrative data that use inpatient diagnosis codes to identify cohorts, outcomes, or covariates may be affected by this change in practice. To understand the potential impact of observation stays on research using administrative healthcare data, we examine the trends of observation stays, short (≤2 days) inpatient admissions, and all inpatient admissions. Methods: We examined a large administrative claims database of commercially insured individuals in the USA between 2002 and 2011. Observation stays were defined on the basis of the procedure codes reimbursable by Medicare or commercial insurers. We report monthly rates of observation stays and short inpatient admissions overall and by patient demographics. Results: We identified 5 355 752 observation stays from 2002 to 2011. Over the course of study, the rate of observation stays increased, whereas the rate of short inpatient stays declined. The most common reason for observation stays was nonspecific chest pain, also the third most common reason for short inpatient stays. The increasing trend of observation stays related to circulatory diseases mirrors the decreasing trend of short inpatient stays. Conclusions: The use of observation stays has increased in patients with commercial insurance. Failure to account for observation stays may lead to an under-ascertainment of hospitalizations in contemporary administrative healthcare data from the USA.
    Pharmacoepidemiology and Drug Safety 09/2014; 23(9). DOI:10.1002/pds.3647 · 2.94 Impact Factor
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    ABSTRACT: To reduce costs, the Centers for Medicare and Medicaid Services (CMS) implemented new policies governing which patients are automatically admitted as inpatients (staying greater than "two midnights") and which require additional justification with physician documentation to be admitted. This study examines procedures missing from the Medicare Inpatient Only (MIO) list and uses national data to evaluate its appropriateness. Non-MIO procedures were identified from the current MIO list. Utilizing relevant billing codes, procedures were queried in the National Surgery Quality Improvement Program database for length of stay (LOS), percentage requiring >2 day stay, and inpatient status from 2005 to 2012. In addition, a separate analysis was performed for patients 65 years old or older who would qualify for Medicare. A majority of patients stayed more than 2 days for several procedures not included on the MIO list (% staying >2 days, mean LOS), including component separation (79.1 %, 5.9 ± 12.3 days), diagnostic laparoscopy (64.2 %, 5.5 ± 11.9 days), laparoscopic splenectomy (60.0 %, 9.0 ± 13.6 days), open recurrent ventral hernia repair (58.2 %, 6.3 ± 9.0 days), laparoscopic esophageal surgery (46.4 %, 5.3 ± 13.3 days), and laparoscopic ventral hernia repair (24.7 %, 2.5 ± 8.8 days). In patients ≥65 years, the average LOS was longer than the general population; for example, 40.2 % of laparoscopic appendectomies and 38.7 % of laparoscopic cholecystectomies in this older group required more than two nights in the hospital. In 92.3 % of procedures examined, patients ≥65 years required greater than two nights in the hospital with an average LOS of 2.5-10.7 days. Commonly encountered non-MIO surgical procedures have national precedents for inpatient status. Before enacting policy, CMS and other regulatory bodies should consider current data to ensure rules are evidence-based and applicable.
    Surgical Endoscopy 06/2015; DOI:10.1007/s00464-015-4271-1 · 3.26 Impact Factor