A quick little article, but I thought it was interesting that hospitals filed a federal suit against HHS over Medicare payments. Apparently, government auditors decide whether hospitals should have admitted Medicare patients or arranged for their care on an outpatient basis. If an auditor finds that the hospital did not need to admit the Medicare patient, the hospital will need to return the money it received for the patient's care.
I had a difficult time figuring out where I fall on this policy. On one hand, hospitals typically have a financial incentive to admit patients which may result in overutilization when it isn't appropriate. However, the admitting physician should be making a medical judgment based upon the patient's health status at the time they present to the hospital. The medical judgment in this instance can be a gray area and I don't understand how a government auditor can retrospectively quantify if it was an appropriate decision or not. I imagine it might take a while for this lawsuit to play out.
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I find this really interesting, too, because in my last job we saw a lot of Medicare beneficiaries staying in the hospital for days under outpatient "observation" status rather than being admitted. Our speculation was that hospitals didn't want to admit them because the government is being more strict about monitoring admissions - and your article suggests this is true.
For beneficiaries, this is a huge issue because if they don't have a three-day inpatient hospital stay, Medicare won't pay anything for their inpatient rehab in a skilled nursing facility after the hospital. So they might be in the hospital for a few days under observation, then get transferred for SNF care, and find out they'll have to pay for rehab themselves because - surprise! - they were never actually admitted to the hospital.
The following Forbes article probably explains it much better than I do. But it's just one more aspect of this debate to consider - that if HHS does consistently claw back Medicare payments for inpatient care, how will hospitals change their admissions protocols and how, in turn, will that affect patients.
http://www.forbes.com/sites/howardgleckman/2012/09/05/what-the-ongoing-battle-over-medicares-observation-stays-means-for-seniors/
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