• E-mail
• Print
• RSS

News: Bill will allow observation time to count toward three-day SNF requirement

Case Management Weekly, November 3, 2010

Want to receive articles like this one in your inbox? Subscribe to Case Management Weekly!

Joe Courtney (D-CT) has introduced a bill (HR 5950) in the House of Representatives that will allow observation stays that exceed 24 hours count toward the three-day inpatient hospital stay required for Medicare coverage in a SNF. A similar bill will be introduced in the Senate.

In support of the new legislation, Rick Pollack, American Hospital Association (AHA) executive vice president, sent a letter to CMS, which highlights changes to the Medicare inpatient-only list, Medicare billing policy, and Medicare audits that have led to the increase in extended observation stays.

Improvements in medical technology have allowed more procedures to be performed in the outpatient setting and, as a result, CMS has removed many medical services from the inpatient-only list. This means that more patients require observation services to ensure that they are stable and safe to discharge, the letter states.

The AHA also cited a change in CMS’ billing edits as a reason for more extended observation cases. In 2006, CMS eliminated a claims-processing edit that rejected outpatient claims containing more than 48 hours of observation services. According to the AHA, many hospitals eliminated their internal edits, which allowed the claims to be submitted.

Hospital leaders also use observation services to avoid jumping through Medicare policy hoops. The AHA noted that the process required to change an inpatient admission to observation services using condition code 44 is too elaborate and many physicians will err on the side of assigning observation services to avoid it. “The administrative burdens and financial consequences associated with [recovery audit contractor] audits, and subsequent appeals, have caused hospitals and physicians to exercise greater caution when admitting patients for inpatient stays.”

Source: AHA

Want to receive articles like this one in your inbox? Subscribe to Case Management Weekly!

• E-mail to a Colleague
• Print
• RSS
• Archive