Medicare testing payment options that could end observation care penalties

Medicare officials have allowed patients at dozens of hospitals participating in pilot projects across the country to be exempted from the controversial requirement that limits nursing home coverage to seniors admitted to a hospital for at least three days. The idea behind these experiments is to find out whether new payment arrangements with the hospitals and other health care providers that drop the three-day rule can reduce costs or keep them the same while improving the quality of care. They are conducted under a provision of the Affordable Care Act that created the Center for Medicare and Medicaid Innovations to develop ways of improving Medicare.