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As observation stays become widely used, SNFs begin to worry

Hospital readmissions are decreasing, which may be the result of an increase of hospitals classifying return hospital visits as observation stays, rather than admissions, leaving the SNF leaders worried about the financial impact this shift will have in the long-term care community.

Because observation stays do not count as an admission; rather they count as outpatient stays. Beneficiaries who have observations stays aren’t eligible for Medicare coverage for a nursing home stay. This comes as a surprise for many beneficiaries who have spent a night in a hospital bed, unaware they weren’t actually admitted to the hospital.

A study by the Wall Street Journal revealed that in a sample of 319 short-term acute care hospitals, heart failure and pneumonia readmission fell by 14%; however, the amount of follow-ups defined as observation stays jumped by 156%.

Of course, a rise in observation stays could mean a fall in SNF admissions. Congress recently acted to stop observation stay abuse with the NOTICE Act, signed into law by President Obama in August.

Source: McKnight’s