Study finds dramatic increase in hospital 'observation care' for Medicare patients

Although patients don't often know the difference between observation and inpatient care, observation care leaves them on the hook for a much larger bill. A study published in Health Affairs finds this circumstance becoming more common.

Politico: Hospital Billing Shifting Costs
A hospital billing practice that can leave Medicare beneficiaries on the hook for large medical costs is becoming increasingly common, according to a report released in Health Affairs on Monday. Three researchers from Brown University examined how frequently patients are placed on "observation status," meaning they're getting treatment in a hospital but are not technically admitted. That means their care is covered by Medicare Part B rather than Part A, which can leave patients responsible for a greater share of their costs (Feder, 6/4).

Kaiser Health News: Study: Hospital Observation Stays Increase 25 Percent In 3 Years
The number of Medicare patients who enter the hospital for observation rose dramatically even though Medicare enrollment and hospital admissions declined slightly, according to a study by gerontologists at Brown University in Providence, R.I. (Jaffe, 6/4).

California Watch: 'Observation Stays' For Medicare Patients Create Coverage Problems
Advocacy organizations have criticized the practice of classifying patients who are treated in a hospital over several days as observation stays, which has left some Medicare patients with large, unexpected expenses. "If you're in a hospital for a week, what do mean you're not an inpatient?" said Toby Edelman, a senior policy attorney for the Center for Medicare Advocacy, who is one of the attorneys representing Jackson in the class-action lawsuit. "The (financial) consequences are serious" (Yeung, 6/4).

Other outlets reported on two other studies in Health Affairs -

National Journal: Report: Even When Free, Many Seniors Skip Checkups
Even though Medicare offers a free "welcome to Medicare" checkup for seniors who enter the program, about one in eight still wait two years or longer to seek a physical, a study in Health Affairs finds. The report did not find that those who delayed care were any sicker as a result. In fact, patients who waited were less likely to have chronic disease and more likely to believe they would live at least another decade (Sanger-Katz, 6/4).

The Hill: Study: Caution Needed In Handling Care For Dual Eligibles
Policymakers must be cautious in formulating plans to streamline care for some low-income elderly and disabled patients, according to an analysis published in the journal Health Affairs. Estimates about savings from new plans and demonstration projects must also be approached with skepticism, the authors wrote (Viebeck, 6/4).