Ask the Experts

Ask the Expert: Observation status

Q: A nursing home sends a SNF patient to the emergency room, after a fall.  A small scalp laceration is sutured, and a CT scan of the head shows no abnormality.  The patient is stable, and a decision is made by the treating physician, that the patient can return to the nursing home.  The patient’s primary physician calls and states that since the patient is Part A, he wants the patient admitted to observation status, so that the SNF facility will not incur a charge for the ER visit.  If the patient is not going to meet the three night minimum full admission criteria, does it really matter how long the patient remains in the hospital, under an “observation” status, with regard to who pays the bill? Would it not still fall on the responsibility of the SNF?  Is it fraudulent of the patient’s primary physician to insist on holding/admitting the patient, just so that the SNF will be not be billed for the visit?


A:  Lots of issues are brought up by your question! Any unnecessary services could be deemed as “waste” by Medicare. An observation status admission solely for the purpose of avoiding charges to a facility could fall under the category of “waste”. Patients can and will incur lots of additional expenses during an observation stay, since it is not covered under Medicare Part A, but rather Medicare Part B. For current updates and issues related to observation status, please go to: