An advisory panel thinks Congress should consider having Medicare count some days in hospital outpatient observation status when deciding whether patients qualify for skilled nursing facility benefits.
Mark Miller, executive director of the Medicare Payment Advisory Commission (MedPAC), made that case Wednesday at a hearing on hospital “observation stays” organized by the Senate Aging Committee.
Traditionally, hospitals have kept some patients in the hospital “for observation” without formally admitting those patients as inpatients.
Since 2003, Congress and the Centers for Medicare & Medicaid Services (CMS) have been expanding use of a Medicare recovery audit contractor (RAC) program to detect Medicare fraud and abuse. When RACs successfully detect fraud or abuse, they get a share of the Medicare program’s savings.
Some RACs have focused on identifying cases in which hospitals provided care that could have been provided through outpatient clinics on an inpatient basis.
Witnesses testified that hospitals have been keeping more patients in outpatient observation status, to reduce uncertainty about whether they had to admit the patient.
Much of the testimony at the hearing came from health care providers who were blasting the recovery auditors, and from the recovery auditors, who defended their work.