Rehab Realities

Beware of hospital observation loopholes

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Shelly Mesure, MS, OTR/L
Shelly Mesure, MS, OTR/L
Hospitals have been undergoing more and more restrictions on re-admissions, and are now facing financial penalties in some situations. Unfortunately, this has also resulted in more patients not being classified as “admits” or “re-admits,” but rather getting coded as “observation” stays.

Hypothetically, hospitals are able to keep a patient for observation for 24 hours or less. I say, “hypothetically” because, unfortunately, many hospitals do not follow the 24-hour rule these days. This has resulted in significant issues for patients transferred to inpatient rehab facilities, such as skilled nursing facilities.

In one example, a patient was treated at the emergency room and sent directly upstairs to receive emergency surgery. The patient stayed for three nights at the hospital but was able to discharge to home afterwards. The patient received a bill for the emergency room co-pay but the insurance company doesn't charge an emergency room co-pay if the patient gets admitted. Unfortunately, the hospital ER coded the patient as observation status, even though the patient was clearly admitted to the hospital for surgery.

In another example, the patient has used $4,000 of therapy services within the calendar year for another condition. He spends three nights at the hospital, coded as an observation stay, and then gets admitted to a skilled nursing facility for short-term rehab. Unfortunately, because this patient is coded as observation status from the hospital, upon admission to the SNF, he does NOT qualify for the Medicare Part A benefits.

I've already seen this scenario played out too many times to count, but now there are additional complications when considering the limitations with the manual medical review process.

It's important for physicians and hospitals to realize the consequences to their decisions. However, it's also important for our lawmakers to realize the loopholes they've created and the need to limit this possibility. Congress has slowly begun to address the issues that arise from hospital observation stays, but it's very slow going.

I encourage all of you to join my efforts in letter writing campaigns to our Congress to help enlighten lawmakers about the current complications these loopholes have created. Ultimately, it's the patient who is put in the worst situation.

Medicare Part B services do not cover the room and board portion of a SNF stay, and now pose all of these restrictions from the caps, modifiers, and medical manual reviews. I think it would also be helpful for patients to become better informed so they can provide their input to the hospitals and physicians.

Shelly Mesure ("Measure"), MS, OTR/L, is the senior vice president of Orchestrall Rehab Solutions and owner of A Mesured Solution Inc., a rehabilitation management consultancy with clients nationwide. A former corporate and program director for major long-term care providers, she is a much sought after speaker and writer on therapy and reimbursement issues.

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Rehab Realities is written by Shelly Mesure, MS, OTR/L. She is the senior vice president of Orchestrall Rehab Solutions and owner of A Mesured Solution Inc., a rehabilitation management consultancy with clients nationwide.

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