Readmissions Dilemma: Admit or Observe?

More stringent penalties for hospital readmissions are creating tough situations for hospitals when it comes to Medicare patients that may need to recover from a hospital stay in a nursing home, according to a report from The Patriot-News.

Medicare only pays nursing home bills if the patient in question required at least three days of inpatient care. Some patients are finding themselves with bills they can't pay, however, because for hospitals, it may make more sense to keep some patients under observation instead of as inpatients.

According to the report, observation and admission seem similar from a patient perspective, but for a hospital, patients under observation are not inpatient admissions and do not have to be considered when hospitals calculate readmission rates. In addition, observation carries a 20 percent co-pay not applicable with inpatient care.

The report cited a study from Providence, R.I.-based Brown University showing a 25 percent increase in patients held under observation between 2007 and 2009, with four percent of patients held longer than 72 hours. 

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