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This morning, I heard an interesting piece on Morning Edition on NPR about hospitals using "observation status" rather than admitting individuals as inpatients (the story can be found here: http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=218633011&m=218811152). I listened with interest and thought about unintended consequences--the heart of so much of the study of health economics.
The key message here is that the government (the Center for Medicare and Medicaid Services, abbreviated CMS) has a program in which it reviews old hospital admissions (up to three years back) and determines whether the patient should have been an inpatient or outpatient. If the patient was admitted as an inpatient and should have been (based on the CMS standards) an outpatient, then the hospital will have to repay the reimbursement it received and will likely get nothing back (according to the story).
Holding a patient in observational status (which we would generally expect would be just for a day or less, perhaps two days) avoids the determination of whether the patient needs inpatient care. Some patients have been held in observation for even longer. If their care is essentially inpatient and they recover, they can then be sent someplace else. So far, if they do not need the full inpatient care this would seem to be good for CMS, good for taxpayers, and good even for the patient to the degree that the patient has copayments for which she is responsible.
The hang up (and the unintended consequence is this). Patients are only eligible for Medicare to pay for nursing home services if they are discharged from an inpatient setting. So, now patients who still need fairly skilled care but who do not need hospital care are not eligible for having the nursing home care covered by Medicare. Who pays? The family in most cases.
So, the government implemented a policy to control costs. This led to a rational response by hospitals to avoid losses. This leads to a lack of ability to discharge to nursing homes and/or get high quality nursing home care as patients and their families cannot pay for it. This was not part of the intended cost control but is part of the impact.
The solution--perhaps allow Medicare to cover any rehabilitation-related care regardless of prior location. But what unintended consequences might this have? I will leave readers to ponder.
The key message here is that the government (the Center for Medicare and Medicaid Services, abbreviated CMS) has a program in which it reviews old hospital admissions (up to three years back) and determines whether the patient should have been an inpatient or outpatient. If the patient was admitted as an inpatient and should have been (based on the CMS standards) an outpatient, then the hospital will have to repay the reimbursement it received and will likely get nothing back (according to the story).
Holding a patient in observational status (which we would generally expect would be just for a day or less, perhaps two days) avoids the determination of whether the patient needs inpatient care. Some patients have been held in observation for even longer. If their care is essentially inpatient and they recover, they can then be sent someplace else. So far, if they do not need the full inpatient care this would seem to be good for CMS, good for taxpayers, and good even for the patient to the degree that the patient has copayments for which she is responsible.
The hang up (and the unintended consequence is this). Patients are only eligible for Medicare to pay for nursing home services if they are discharged from an inpatient setting. So, now patients who still need fairly skilled care but who do not need hospital care are not eligible for having the nursing home care covered by Medicare. Who pays? The family in most cases.
So, the government implemented a policy to control costs. This led to a rational response by hospitals to avoid losses. This leads to a lack of ability to discharge to nursing homes and/or get high quality nursing home care as patients and their families cannot pay for it. This was not part of the intended cost control but is part of the impact.
The solution--perhaps allow Medicare to cover any rehabilitation-related care regardless of prior location. But what unintended consequences might this have? I will leave readers to ponder.
