Health care payers continue to classify large numbers of Medicare admissions as “observation status,” and while the recent extension of the two-midnight rule to Medicare Advantage plans has resulted in a decline in the use of observation status classifications among those plans, Medicare Advantage plans still use the observation status classification more than three times as often as traditional Medicare.
According to a new study, Medicare Advantage plans used the observation rate classification for between 14.4 percent and 16.1 percent of their claims during the first half of 2024. Traditional Medicare? With a one-month exception, from 3.7 percent to 5.2 percent.
The extensive use of the observation status classification by Medicare Advantage plans has potentially significant financial implications for the admitting hospitals and both financial and health care implications for their Medicare patients.
Learn more about the study its findings from the Becker’s Hospital Review article “Some payers are ‘hitting the snooze button’ on 2-midnight rule: Report,” which includes a link to the report.