MedPAC changing tune on hospital observation stays?

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Commissioner Rita Redberg says it's time to end observation stays.
Commissioner Rita Redberg says it's time to end observation stays.

Long-term care providers' hopes for eliminating hospital observation stays may be fading after some Medicare Payment Advisory Commission members said they were re-thinking their positions on changing the policy. 

Following a November MedPAC meeting that indicated growing support toward a “site-neutral” policy for patient observation, the commission changed course at a mid-January meeting after some members expressed reservations. 

The observation stay controversy flared after RAC auditors started challenging hospitals when they began admitting more people as inpatients for only a day or two. The situation led hospitals to start using observation status more liberally. Commissioner Craig Samitt, M.D., backed off his November endorsement of eliminating observation stays, saying that his position is “evolving” on the issue.

Previously, “I probably would have been a strong advocate for a site-neutral payment approach and the sense I got is we're seeing appropriate scrutiny of longer hospitalizations and a shift to shorter hospitalizations,” he said. “The problem we're trying to solve is the burden on hospitals with the [audit] process as well as the unintended consequences for beneficiaries. Now I'm thinking that we should leave the payment differences the way they are and focus instead on resolving the problems that were really the core to this in the first place.”

Commissioner Rita Redberg, M.D., continues to support eliminating the observation stays. She said it's “hard from a beneficiary or clinical point of view to separate an observation stay from a one-day inpatient stay.” Redberg  said she favors site-neutral payments, “paying the same amount for the same care, no matter what you call it.” n