End ob­ser­va­tion sta­tus and let docs, pa­tients fo­cus on treat­ment

Modern Healthcare - - COMMENT - By Dr. Chris Ed­wards

I read with in­ter­est the re­cent ar­ti­cle “Hos­pi­tals hope for re­lief from Medi­care’s two-mid­night pur­ga­tory” (Mod­ern Health­care, Aug. 25, p. 14). Ev­ery time I see a story about the is­sue of ob­ser­va­tion ser­vices I feel com­pelled to re­ply. Quite frankly, it is the ex­is­tence of ob­ser­va­tion ser­vices that is ac­tu­ally the prob­lem. Any so­lu­tion has to in­clude the elim­i­na­tion of ob­ser­va­tion.

First and fore­most, the pres­ence of ob­ser­va­tion ser­vices has a neg­a­tive ef­fect on qual­ity of care. Be­cause of its avail­abil­ity, hos­pi­tals have to spend in­or­di­nate amounts of time, money and other re­sources try­ing to de­cide whether a pa­tient who needs hos­pi­tal­iza­tion should be ob­ser­va­tion or in­pa­tient. A hos­pi­tal like mine, which is a 250-bed com­mu­nity fa­cil­ity, might spend $1 mil­lion a year in per­son­nel costs—highly trained med­i­cal per­son­nel in­clud­ing nurses and physi­cians—de­ter­min­ing whether a pa­tient should be in ob­ser­va­tion or ad­mit­ted as an in­pa­tient.

If any­one feels that this price tag is an ex­ag­ger­a­tion, re­al­ize that it is a con­di­tion of par­tic­i­pa­tion with Medi­care to have a uti­liza­tion process to re­view for proper hos­pi­tal sta­tus. Th­ese costs also in­clude de­fend­ing de­nials from re­cov­ery au­dit con­trac­tor reviews. For a com­mu­nity hos­pi­tal, spend­ing time and money on ob­ser­va­tion is­sues takes away re­sources that could have been used on qual­ity and pa­tient-safety is­sues.

Ob­ser­va­tion ser­vices also are dis­tract­ing to physi­cians. When a physi­cian puts a pa­tient in the hos­pi­tal, the fo­cus should be on treat­ing the acute med­i­cal is­sue. How­ever, physi­cians also have to make a decision about whether that pa­tient should be in ob­ser­va­tion or ad­mit­ted to the hos­pi­tal as an in­pa­tient. The physi­cian has to look into the crys­tal ball and de­cide whether that pa­tient is go­ing to stay two mid­nights. And the physi­cian knows that what­ever decision is made as to the hos­pi­tal sta­tus of the pa­tient will be scru­ti­nized by the hos­pi­tal uti­liza­tion com­mit­tee, and then later by gov­ern­ment-con­tracted au­di­tors. Physi­cians should not have to deal with this. If the decision is made that a pa­tient needs to be in the hos­pi­tal, then that pa­tient should be ad­mit­ted as an in­pa­tient, end of story. Physi­cians could then de­vote their fo­cus to im­por­tant mat­ters such as the med­i­cal con­di­tion of the pa­tient and ap­pro­pri­ate treat­ment.

Ob­ser­va­tion is also con­fus­ing and dis­tress­ing to pa­tients. I gave a pre­sen­ta­tion in my com­mu­nity re­cently in an at­tempt to ed­u­cate our cit­i­zens on ob­ser­va­tion ver­sus in­pa­tient sta­tus. Amaz­ingly, it was a record crowd and a com­pletely packed house.

Our pa­tients do not un­der­stand how they could be in the hos­pi­tal oc­cu­py­ing a bed and not be ad­mit­ted (ob­ser­va­tion is an out­pa­tient ser­vice; thus they are not ac­tu­ally ad­mit­ted). They do not un­der­stand why they have to pay for self-ad­min­is­tered med­i­ca­tions and out­pa­tient co­pay­ments. They be­lieve that since they have paid into Medi­care for decades, they should not be de­nied ben­e­fits they de­serve. They are afraid they will get stuck with the bills when their in­pa­tient hos­pi­tal­iza­tion is de­nied. Ob­ser­va­tion thus cre­ates con­flict be­tween pa­tients and their lo­cal hos­pi­tals over th­ese billing is­sues, and dis­tracts pa­tients from more im­por­tant is­sues such as learn- ing about their treat­ment plans.

Fi­nally, ob­ser­va­tion cases are the gen­e­sis of the vast majority of de­nials in re­cov­ery au­dits of in­pa­tient hos­pi­tal­iza­tions. As some­one who writes th­ese ap­peals and tes­ti­fies in ad­min­is­tra­tive law judge hear­ings de­fend­ing the in­pa­tient ad­mis­sions of our pa­tients, I can at­test that the au­dit con­trac­tor never de­nies an in­pa­tient hos­pi­tal­iza­tion us­ing the ar­gu­ment that the pa­tient should not be treated in the hos­pi­tal. The de­nial is al­ways based on the ar­gu­ment that the pa­tient could have been treated in ob­ser­va­tion sta­tus.

Re­cov­ery au­dit con­trac­tors use the neb­u­lous def­i­ni­tions in the Medi­care ben­e­fit pol­icy man­ual to make their case. And although I be­lieve the judges do their best, there is cer­tainly no agree­ment among the 65 ad­min­is­tra­tive law judges as to when a pa­tient should be ob­ser­va­tion ver­sus in­pa­tient. Stud­ies have shown the over­turn rate for th­ese de­nials ranges from 15% to 85%. Ob­ser­va­tion ver­sus in­pa­tient is also one of the rea­sons there are re­port­edly 500,000 re­cov­ery au­dit de­nial cases back­logged at the ad­min­is­tra­tive law judge level.

The two-mid­night rule is an at­tempt to de­fine ob­ser­va­tion ser­vices. I do ap­pre­ci­ate the CMS rec­og­niz­ing the need for clar­i­fi­ca­tion and then act­ing. But clearly this rule has its own sig­nif­i­cant prob­lems. Let’s fix the prob­lem by elim­i­nat­ing ob­ser­va­tion, which can be done in a bud­get-neu­tral way. When a physi­cian de­ter­mines hos­pi­tal­iza­tion is nec­es­sary, that per­son should be ad­mit­ted as an in­pa­tient.

In­ter­ested in sub­mit­ting a Guest Ex­pert op-ed? View guide­lines at mod­ern­health­care.com/op-ed. Send drafts to As­sis­tant Man­ag­ing Ed­i­tor David May at dmay@mod­ern­health­care.com.

Dr. Chris Ed­wards is chief med­i­cal of­fi­cer at Maury Re­gional Health Sys­tem, Columbia, Tenn.

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