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The NSPA Blog

Medicare 30 day Readmission Confusion

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Posted on July 22nd, 2013 by Teri Dreher, under Observation Status

Well, didn’t it used to be easy to know if you were admitted to the hospital? You went through the ER, got transferred “upstairs”, a nurse and admission specialist came and asked several dozen questions and you settled in for your stay. Not so much now…one can spend several days in the hospital, in a real hospital bed, not knowing wether you are “observation” or “inpatient” status. Why all the confusion and what consequences can patients expect to feel if they are not technically admitted to the hospital as an inpatient? One of the most obvious ones is if the short hospital stay should end with a short stay at a rehab facility after discharge. If one goes from observation status to being discharged to rehab, Medicare will not pay for the rehab stay if patients are not “admitted” for at least 3 days prior to discharge. “Observation” status is technically outpatient treatment as far as Medicare is concerned and outpatients cannot go straight to rehab and receive benefits. Many is the patient who has been surprised at receiving a several thousand dollar bill for his rehab stay because it was not covered due to his admission status. Oftentimestimes the status is changed by off site review specialists who dictate to the case management department what status the patient qualifies for after he has already been admitted. It changes…and payment consequences may be huge, so informed patients need to ask EVERY DAY what status they are under if they are unsure.

Hospitals like to have patients admitted as “observation” when possible because it will not be counted against them if the patient needs readmission within 30 days of discharge. For certain diagnoses, if a patient is readmitted within 30 days of a full admission, another hospitalization will be viewed by Medicare as a result of discharging the patient too early, a result of sloppy,case management. This is unsafe care, and the hospitals will be penalized by losing most if not all of their billing income from the first inpatient hospitalization. If there is no “inpatient” stay, they cannot be penalized. Observation stays are also financially beneficial to the hospitals as charges are based on hourly rates, and certain nursing observation rules apply that can be billed at a higher rate. There are many loopholes and exceptions to this rule and appeals may be made by patients and professional advocates working on their behalf.

Savvy patients need to be well informed today and ask questions. Medical personnel, patients and hospitals all need to work together to make decisions that lead to greater safety, efficiency, and more effective discharge planning: it helps everyone!

With over 36 years of clinical experience in Critical Care nursing, home based health care and expertise as a cardiovascular nurse clinician, Teri is well acquainted with the complexities of the modern healthcare system. She has served as a nursing leader, mentor, educator, and consistent patient advocate throughout her career in some of the best hospitals across the country. Her passion to keep the patient at the center of the model of nursing care led her to incorporate NShore Patient Advocates, LLC in 2011, serving clients throughout the northern suburbs of Chicago.

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