Medicare delays enforcement of new hospital observation rule

Healthcare Finance News: September 30, 2013


Medicare officials announced last week that they will delay enforcement of controversial new rules that define when hospital patients should receive observation care, rather than being admitted, a distinction that makes beneficiaries ineligible for follow-up nursing home coverage.

The new rules take effect Tuesday, but officials said they will not be enforced until at least Jan. 1, 2014. During that time, Medicare auditors will review a small sample of hospital admission records to insure that hospitals are working to properly implement the new standards but will not penalize mistakes.

The rules require hospitals to admit a patient who is expected to stay through at least two midnights. Those whose stays are expected to be shorter will be classified as observation patients, who generally pay higher out-of-pocket costs than inpatients. Also, because Medicare requires a three-day inpatient hospital stay before it covers nursing home expenses, observation patients do not receive this this benefit. Read more