Increased observation services in Medicare beneficiaries with chest pain.

INTRODUCTION: We examined trends in the use of observation services and the relationship between index service type (observation services, emergency department [ED] visits, inpatient stays) and both clinical outcomes and Medicare payments. METHODS: We created a yearly cohort panel of Medicare beneficiaries with chest pain. We evaluate the relationships between index service type and 30-day clinical outcomes using a multinomial logit model and between index service type and Medicare payments using generalized linear models. RESULTS: In 2009, 24% of patients with chest pain received observation services; this rose to 29% in 2011. Conversely, 20% were treated as hospital inpatients in 2009; this fell to 16% in 2011. In the adjusted analysis, the risk of 30-day return to the hospital was 7% less (95% confidence interval, 5%-8%) for those receiving observation services as compared with inpatients. Average Medicare payments ranged from $3032 for beneficiaries initially treated in the ED to $3885 for those initially treated in observation to $6545 for those initially treated as inpatients. DISCUSSION: Patients treated in observation are less likely than those treated in the ED or as inpatients to have an adverse event within 30 days. Adjusted Medicare payments, including the index stay and the subsequent 30 days, were substantially less for those treated in observation as compared with those treated as inpatients, but more than for those treated and released from the ED. Higher rates of observation service use do not appear to be negatively affecting patient outcomes and may lower costs relative to inpatient treatment.

Patient financial responsibility for observation care.

BACKGROUND: As observation care grows, Medicare beneficiaries are increasingly likely to revisit observation care instead of being readmitted. This trend has potential financial implications for Medicare beneficiaries because observation care-although typically hospital based-is classified as an outpatient service. Beneficiaries who are readmitted pay the inpatient deductible only once per benefit period. In contrast, beneficiaries who have multiple care episodes under observations status are subject to coinsurance at every stay and could accrue higher cumulative costs. OBJECTIVES: We were interested in answering the question: Do Medicare beneficiaries who revisit observation care pay more than they would have had they been readmitted? DESIGN: We used a 20% sample of the Medicare Outpatient Standard Analytic File (2010-2012) to determine the total cumulative financial liability for Medicare beneficiaries who revisit observation care multiple times within a 60-day period. PARTICIPANTS: Participants were fee-for-service Medicare beneficiaries who had Part A and Part B coverage for a full calendar year (or until death) during the study period. MEASUREMENTS: Our primary measure was beneficiary financial responsibility for facilities fees. RESULTS: On average, beneficiaries with multiple observation stays in a 60-day period had a cumulative financial liability of $947.40 (803.62), which is significantly lower than the $1100 inpatient deductible (P < 0.01). However, 26.6% of these beneficiaries had a cumulative financial liability that exceeded the inpatient deductible. CONCLUSIONS: More than a quarter of Medicare beneficiaries with multiple observation stays in a 60-day time period have a higher financial liability than they would have had under Part A benefits.

Observation encounters and subsequent nursing facility stays.

BACKGROUND: Medicare coverage of skilled nursing facility (SNF) care requires that beneficiaries have a 3-night inpatient stay in the prior 30 days to be eligible. Time spent by beneficiaries receiving hospital-based observation services does not count toward this requirement. OBJECTIVES: To examine the frequency of Medicare beneficiary discharge from hospital-based observation services to SNFs and its impact on Medicare coverage. STUDY DESIGN: Retrospective cohort study. RESULTS: In 2010, 195,068 community-dwelling beneficiaries received hospital-based observation services. Beneficiaries were overwhelmingly (96.5%) discharged back to the community without home health services. Only 1.2% (2319) were discharged to non-covered SNFs, while 0.6% (1196) were discharged to covered SNFs. Patients discharged to SNFs experienced longer lengths of stay (LOS) than those discharged back to the community (34.9 hours vs 25.5 hours; P<.01). Approximately one-fourth of beneficiaries discharged to SNFs had an observation LOS of 48 hours or more. CONCLUSIONS: While only a small minority of community-dwelling Medicare beneficiaries who received hospital-based observation services in 2010 were discharged to an SNF not covered by Medicare, the implications for these patients and the associated costs deserve attention. These findings have important implications for Medicare's observation service and 2-midnight policies.