Hospital 'observation' status a matter of billing

The Columbus Dispatch, February 15, 2011

The Ohio State University Medical Center has seen a decline in patient admissions in recent months. It's not a big drop - 1.5% compared with the same period last year - but any drop is unusual when growth has been the norm. One reason is that the number of patients held in "observation" status has increased. "We're observing more patients and admitting fewer patients," said Steve Gabbe, MD, CEO of the health system. "We're very cautious about unnecessary hospital admissions." Healthcare advocates say it's better to be admitted than placed under observation and that patients are caught in a "limbo" of sorts while hospitals and insurers grapple over reimbursements. Medicare, Medicaid and private insurers are increasingly scrutinizing whether patients really need to be admitted. If an insurer says a patient shouldn't have been admitted, it might not reimburse a hospital. For example, a man shows up at an emergency department with chest pains. Doctors order lab tests and an electrocardiogram but don't find any obvious problems. Still, they admit the man for two days and then send him home. Medicare likely would say the patient required observation, not admission.

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