Observation Status Costly for Hospitals
In a related invited commentary, Robert Wachter, MD, likened the assignment of patients to observation status to a passage from Lewis Carroll's Alice in Wonderland, because Medicare's original observation policy has "morphed into madness."
"But I don't want to go among mad people," Alice remarked.
"Oh, you can't help that," said the Cat:
We're all mad here. I'm mad. You're mad."
"How do you know I'm mad?" said Alice.
"You must be," said the Cat,
"Or you wouldn't have come here."
"If one was charged with coming up with a policy whose purpose was to confuse and enrage physicians and nearly everyone else, one could hardly have done better than observation status," he wrote.
With Medicare's proposed rule "improves on the status quo and should provide much needed clarity.""However," he wrote, "CMS could further improve the situation by requiring hospitals to inform patients of their status—observation or inpatient—as soon as it is determined, given the potential financial impact."
The agency also should be more flexible in allowing hospitals to retroactively change patients' status when more information becomes available, rather than taking the physician's initial orders to determine to what status the patient should be assigned.
Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
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