Medicare Attempts to Rein In Costs

Hospitals with higher-than-average 30-day risk-adjusted re-admission rates for heart failure, acute myocardial infarction, pneumonia cases between July 1, 2008, and June 30, 2011, will receive reduced Medicare payments starting in FY 2013, capped at a maximum of 1% of inpatient payments. 

In response to this change in re-imbursement process, some hospitals have adjusted their admissions process — not necessarily in a good way. Hospitals can categorize a patient as being under “observation”. Such a patient is physically in the hospital, and under medical care. But they have not been processed as “admitted”.   My elderly parents have been involved in this very categorization.  Such situations enable the hospital some extra time with the patient before formal “admittance”. In many cases, this simply skirts the issue of Medicare and admittance.   Older adults would seem especially effected by this process.

Hospitals can discharge patients under “observation”, which delays the clock on a formal admission. Then, when an elderly patient returns and is admitted two weeks later, the Medicare clock will start. The hospital can sweep under the rug the earlier patient “observation”, thereby hoping to provide care to a patient multiple times within a 30 day period without incurring the penalty on re-admissions.

Now, some re-admissions are planned, such as follow-up from surgery. There may be a change in patient condition, or a series of unrelated health issues which require medical expertise. And many other cases are unplanned, and unavoidable. Realistically, there will always be cases which legitimately require hospital admission, or re-admission.

But as of now, hospitals having too many counts of patient re-admission will begin to pay for their inadequate medical diagnosis and patient care.

– John D. Miller is the owner of Home Care Partners, LLC, a Massachusetts business providing private duty, in-home assistance, personalized and companion care services to those needing help in daily activities and household functions. He can be reached at: (781) 378-2164; email: ; or online at: