A story ran Thursday night (1/9/14) about the new billing code at American hospitals, called “observation care.” I hope you can open this without the accompanying commercial ad. Basically, the story is about the problem of the new billing code for seniors in hospitals–called observation care. If a patient is in observation care, their subsequent care in a rehab facility is not covered because rehab care requires ‘in patient’ hospital care according to existing Medicare rules and regulations.
What is missing from this story, told only by hospital association executives and a patient is why hospitals started this new billing practice.
Last year, for the first time, hospitals were fined by Medicare if there were too many re-admissions of patients who had recently had surgery. By changing the coding to “observation,” patients are not technically re-admitted to in-patient care, and therefore, the hospitals are not subject to fines by Medicare.