The Unintended Consequences of the “Observation Status” Policy | Nursing | JAMA Forum Archive | JAMA Network
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JAMA Forum Archive, 2012-2019: Health policy commentary from leaders in the field
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The Unintended Consequences of the “Observation Status” Policy

Imagine you’re 78 years old and covered by Medicare, and one afternoon sudden chest pain sends you to the emergency department (ED). There, after a physical examination and some diagnostic tests, the ED physician says she wants to hospitalize you to monitor your condition. After a week of hospitalization, experiencing fluctuating symptoms, you are transferred to a skilled-nursing facility (SNF); on the second day there, you are told Medicare won’t pay for your care at the SNF because you weren’t a hospital inpatient for a minimum of 3 nights.

What you didn’t know—and what even the hospital unit physicians and nurses may not have known—is that you were hospitalized as an outpatient on what is called “observation status.” Even though you were on a unit with others admitted as inpatients, and even though all of you received care from the same staff, you were initially admitted so that your health status could be observed and evaluated. But during your week-long hospital stay, your status was never changed from outpatient (observation status) to inpatient.

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