Health Information Management

Even the Senate is looking at care setting

APCs Insider, February 8, 2013

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As part of the 2013 OPPS proposed rule, CMS asked for input on potential clarifications or changes to its policies regarding patient status. Now the Senate is weighing in on the importance of appropriate care setting.

CMS does not specifically limit the number of hours a patient can remain in observation, but does provide some general guidelines. According to the Medicare Claims Processing Manual (Chapter 4, 290.1), in the majority of cases a physician can decide whether to admit a patient in less than 48 hours, and usually less than 24 hours. Patients who need longer monitoring probably should be admitted. Of course, the decision to admit isn’t that simple, as CMS acknowledged.
However, the number of cases of Medicare beneficiaries receiving observation services for more than 48 hours increased from approximately 3% in 2006 to approximately 7.5% in 2010.
Auditors pay a lot of attention to short stays, which may lead facilities to use observation (a lower-paying service) instead of admitting a patient and facing recoupment later.
Audits are where the Senate comes in. The Senate Finance Committee is currently studying ways to reduce fraud and waste in Medicare and Medicaid. The committee asked for recommendations from healthcare stakeholders and received almost 2,000 submissions.
One of the ways stakeholders suggested reducing fraud and waste: clarifying when it’s appropriate for a patient to receive inpatient care versus outpatient (observation) services.
The committee is still looking at recommendations and CMS is still considering its options for defining inpatients. So make sure you keep an eye out for further clarifications or requests for comments.

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