Abstract
BackgroundMedicare beneficiaries hospitalized under observation status have significant cost-sharing responsibilities under Medicare Part B. Prior work has demonstrated an association between increased cost-sharing and health care rationing among low-income Medicare beneficiaries. The objective of this study was to explore the potential impact of observation cost-sharing on future medical decision making of Medicare beneficiaries.MethodsSingle-center pilot cohort study. A convenience sample of Medicare beneficiaries hospitalized under observation status care was surveyed.ResultsOut of 144 respondents, low-income beneficiaries were more likely to be concerned about the cost of their observation stay than higher-income respondents (70.7% vs29.3%, p = 0.015). If hospitalized under observation status again, there was a trend among low-income beneficiaries to request completion of their workup outside of the hospital (56.3% vs 43.8%), and to consider leaving against medical advice (AMA) (100% vs 0%), though these trends were not statistically significant (p = 0.30).ConclusionThe results of this pilot study suggest that low-income Medicare beneficiaries hospitalized under observation status have greater concerns about their cost-sharing obligations than their higher income peers. Cost-sharing for observation care may have unintended consequences on utilization for low-income beneficiaries. Future studies should examine this potential relationship on a larger scale.
Highlights
Medicare beneficiaries hospitalized under observation status have significant cost-sharing responsibilities under Medicare Part B
Since 2013, The Centers for Medicare and Medicaid Services (CMS) has defined observation patients by the 2-Midnight Rule, which stipulates that patients with an anticipated length of stay of < 2 midnights be designated as observation status while those anticipated to require ≥2 midnights be designated as inpatients, regardless of clinical status
Our objective was to explore whether cost-sharing for observation care could impact future medical decision-making related to such care among low-income versus higher-income Medicare beneficiaries
Summary
Medicare beneficiaries hospitalized under observation status have significant cost-sharing responsibilities under Medicare Part B. The objective of this study was to explore the potential impact of observation cost-sharing on future medical decision making of Medicare beneficiaries. Observation status or “hospital outpatient status” is a classification for Medicare beneficiaries that are billed as outpatients for a hospitalization. Whereas hospital inpatients are billed through Medicare Part A, observation patients are billed through Medicare Part B, which can result in higher out-of-pocket costs [1]. Between 2006 and 2010, the use of observation stays increased 70%, largely as a result of penalties that CMS was imposing on hospital systems under the Recovery Audit Contractor Program for inappropriately billing for short-stay admissions [2, 3]. It is estimated that approximately 25% of adult general medicine hospitalizations are observation visits [5]
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