January
2003
Volume 27 •
No. 1
New procedure aims to boost proper use of observation status
In an effort to improve compliance with Medicare regulations and ensure the
hospital's financial viability, starting this month a new procedure will be
implemented in the emergency department that will help admitting physicians
determine whether Medicare patients should be admitted under observation status
or as inpatients. The move will not affect the type or duration of medical
care that patients can receive.
Under the new procedure, an observation case manager will be paged to the ED when a decision is to be made on how a Medicare patient will be admitted. Through discussions with the admitting physician team, the case manager - longtime Stanford nurse William Gressman - will evaluate the situation and provide guidance on whether the patient best fits the criteria for observation or inpatient admission. Gressman will make a recommendation based on his extensive knowledge of Medicare's utililization review guidelines.
The procedure is being implemented because patients who meet the criteria for observation status are still being inappropriately admitted as inpatients, said Christopher Sharp, staff physician and the medical director of the D and E Ground units. See: Observation status - Keypoints to remember
"A lot has been done to promote the proper use of observation, but we still misclassify a lot of patients," Sharp said. "We need to be more active on this issue."
In November 2001, a campaign was launched at Stanford to more appropriately use observation status, which was introduced by Medicare a decade ago. Observation is designed for patients who come to the hospital unscheduled - typically through the ED - who have an uncertain diagnosis and require monitoring or evaluation for up to 24 hours until a clear diagnosis or disposition can be made. Observation is appropriate for conditions including chest pain, minor trauma, difficulty breathing and "rule out" or differential diagnoses.
Sharp noted that when patients are improperly classified as inpatients, it not only violates Medicare regulations, but it means the hospital doesn't get paid for treating those patients. In September 2001, hospital administration decided that all Medicare one-day inpatient admissions would be retrospectively reviewed by case management, and that the hospital would not bill Medicare for those inappropriately admitted as inpatients. The hospital foregoes payment on about 20 such patients each month.
"It's important for our physicians to understand that compliance with these rules contributes to keeping the hospital financially sound," Sharp said. He noted that because those making the admission determinations are usually residents - most commonly in medicine or cardiology - it behooves the medical staff to make sure residents understand the rules and the new procedure.
Elizabeth Polek, director of social work and case management, emphasized that contrary to some physicians' assumptions, the type and duration of medical care available to patients is not affected by their classification. "Whether a patient is admitted under observation or as an inpatient, they'll still receive the care the doctor orders," she said. "This is not about changing clinical practice. It's about correctly classifying patients according to Medicare's guidelines." While a patient admitted for observation can later be converted to inpatient status, she noted, the reverse isn't true.
Given the sometimes-confusing nature of Medicare's regulations, Polek added, receiving guidance from a case manager "who knows these rules inside and out" should help admitting physicians.
A nurse with master's degrees in health science and public administration, Gressman has worked at Stanford Hospital for 14 years, initially in the emergency department and later in case management. In fall 2001 he assumed the new position of observation case manager. Over the past year, Sharp said, Gressman "has been incredibly helpful to our service in figuring out which way to go" when admitting patients.
The new procedure will initially be implemented during regular business hours but could be expanded if it works well, Polek said.
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