HHS Rule on Observation Status Falls Short, Says Advocacy Group

The Center for Medicare Advocacy says a new rule released by HHS does not do enough to correct billing procedures that make it financially beneficial for a hospital to classify patients as outpatients under observation.

According to an NPR report, hospitals' use of the observation status has doubled, mostly to avoid potentially having to refund reimbursements if recovery auditors decide an inpatient should have been classified as an outpatient.

A Medicare recipient classified as an outpatient under observation, however, faces a 20 percent copay and must also pay for any follow-up nursing home treatment out of pocket, according to the report.

CMA does not feel an HHS rule issued in August does enough to correct the issue. "For at least the past three years, CMS has repeatedly expressed concern about Medicare beneficiaries' increasingly lengthy stays in hospitals as outpatients," according to the CMA statement. "Unfortunately, this has not yet translated into action that resolves the issue for beneficiaries."

More Articles on HHS Rules:

Dr. Don Berwick: Change Medicare Nursing Coverage Rule
OIG: Hospital of the University of Pennsylvania Must Refund $538k
2 Large Kansas Hospitals to Refund Medicare Overpayments

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