Hospitals report that they’re being pressured to reverse Medicare patients’ status of inpatient hospitalization, if the patient has had a short inpatient hospital stay.  The federal government has made short inpatient hospital stays a target in the attempt to reclassify or under-place many patients into a lower-cost observation status as part of cost savings.

The pressure on many hospitals is continual auditing and high penalties, and this situation is forcing many hospitals to reclassify Medicare patients as less-costly “observation” cases.  The unaware patients who have received short term care are suddenly liable for medical bills that they thought government would cover.

This is a problem that is putting hospitals in opposition against the admitting doctors, and forcing the hospitals to scrutinize admitting doctors’ decisions.  The hospitals, as an entity that seems to be in the middle and in jeopardy themselves, may actually review medical records and many times even use specific software to analyze the patients’ medical histories and documents to determine if the patient can be reclassified to an observational status.  Observational status leaves the patient ineligible to receive Medicare coverage.

According a senior vice president and counsel for the American Hospital Association, “No hospital wants a patient to be denied payment for services they really should have when they need them. But hospitals, like patients, are the ones who face a penalty when they guess wrong in the eyes of the authorities about whether something should be an admission or an observation.”

Fourteen seniors are suing the federal government in a class-action case in U.S. District Court in Bridgeport, Conn., saying the policy that allows healthcare providers to reclassify hospital care from inpatient to observation after being admitted is illegal and ought to be overturned.

Filed under: Busch Chiropractic