Poorer Medicare beneficiaries more likely to be kept for observation in the hospital

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Medicare beneficiaries with lower incomes are more likely to be hospitalized under an observation stay, leading to them paying more for hospital care, a recent study has found.

When Pennsylvania researchers compared the wealthiest quartile of beneficiaries with the poorest quartile of patients, the lower income group was 24% more likely to be hospitalized at least three times under observation in a given year.

Being in a hospital under observation status can affect patient's eligibility for Medicare post-acute coverage, and patients have historically often not known whether they were in under observation. The NOTICE Act, signed in 2015, is meant to have beneficiaries better understand their eligibility and out-of pocket costs.

Medicare beneficiaries in for observation also required to pay 20% of their hospital bill, in addition to certain drugs.

“To our knowledge, this is the first nationally representative study to find that beneficiaries who are least able to afford it may be at greatest risk for incurring these high costs,” Jennifer Goldstein, M.D. study author and researcher with Christiana Care Hospitalist Partners and Sidney Kimmel Medical College in Philadelphia, told Reuters.

The study used Medicare claims data from 2013. This included more than 67,000 patients with a total of more than 132,000 hospital stays for observation. The data used people from 97% of the counties in the country.

Results appeared in The American Journal of Medicine.