Q: You co-authored a study on how specialized hospital observation stay units could increase transparency and allow quicker inpatient admission decisions. This would help people meet the three-midnight requirement for skilled care. What are the characteristics of type 1 unit care?

A: Essentially, there are criteria for patient selection, provision of care first in the emergency department and then in the observation unit, and for timely discharge or inpatient admission from the unit.

Q: Why aren’t there more of these type 1 units?

A: Lack of awareness, and confusion regarding observation payment policy, which changed five times over 10 years. Payment policy changes may have created financial incentives in the past which discouraged the use of observation services, then the swing of the pendulum encouraged overutilization of observation services. 

Q: Should time spent in a type 1 unit count toward the requirement that people stay three midnights?

A: I think that it is reasonable to include time spent in a type 1 unit in the Three-Midnight Rule – since the level of care in that setting is likely to be comparable or higher than care in an inpatient bed.