Recently, cardiovascular programs have experienced increased scrutiny over inappropriate inpatient admissions. As a result, many patients that were historically admitted as inpatients are now being classified as observation patients. To address some of the top-of-mind questions regarding this trend, Brian Contos, Executive Director of the Cardiovascular Roundtable, shares early insights on the financial and operational implications of providing observation services.
Q: Why have observation services garnered so much attention recently?
Observation status has existed for many years; however, recent events have placed a spotlight on this outpatient designation. Of particular note, this April, a for-profit hospital chain filed suit against another for-profit chain calling into question its admission practices - specifically alleging that it routinely admitted patients as inpatient, rather than observation, to bolster revenues. While the merits of the case are debated, the lawsuit emphasizes the weightiness, confusion and outright controversy associated with observation status.
Yet the attention to observation has deeper roots. Specifically, an increasing share of inpatient medical cases is short stay in nature. Cardiovascular medicine is a prime example with approximately 75 percent of chest pain, 50 percent of arrhythmia, and 25 percent of heart failure cases requiring inpatient stays of just one or two days. Moreover, CMS and other payers perceive many short stay inpatient cases as medically unnecessary. The Recovery Audit Contracts (RACs), which are now active across the entire country, have invested significant resources in identifying unnecessary admissions. The risk of revenue take-backs has certainly captured the attention of hospital leaders. Adding to this pressure, a national focus on reducing preventable readmissions has providers scrutinizing the necessity of index admissions.
Notwithstanding this regulatory scrutiny, hospitals are seeking more efficient, efficacious approaches to monitoring, diagnosing, and establishing treatment plans for medical cases - particularly those that present to the emergency department. As an immediate financial incentive, correct use of observation status allows providers to bill separately for the observation component of care. Further down the road, shared savings payment models will spur hospitals to provide care in the lowest cost setting, and outpatient observation is nearly always more economical than inpatient placement.
The Expanding Role of Observation Services: Q&A with Brian Contos
As reported in today's Daily Briefing, widespread adoption of evidence-based treatments for severe myocardial infarctions (MIs) has led to a "sharp drop" in patient deaths, according to study in JAMA, NPR's "Shots" reports.
For the study, Swedish researchers analyzed national coronary care registry data for more than 61,000 patients who suffered an ST-elevation MI (STEMI)--a deadly MI that accounts for about 29% of all MIs--between 1996 and 2007. Across the 12-year study period, the use of evidence-based MI treatments, such as clot-busting drugs and rapid angioplasty, increased nationwide.
The Case for Evidence-Based Treatment: JAMA Looks at MI
Last week, the American College of Cardiovascular Administrators (ACCA) held its annual meeting in Chicago, IL. While sessions on physician integration and health reform served to kick off the meeting, several sessions on transcatheter valve devices provided a look into current experience and future potential--both good and bad--for this still investigational field. On the heels of ACC, where clinical results of the hotly anticipated PARTNER trial were released, much of the discussion at ACCA focused on future reimbursement and profitability for these procedures.
Attendees were given the chance to hear a first-hand experience from Elizabeth Walsh, Director of the Aortic Clinical Trials Division at Penn Medicine. A leader in the cardiovascular field, Penn has been at the forefront of the transcatheter valve market as an early trial site for PARTNER. Although Penn has now enrolled roughly 100 patients in the PARTNER trial, this has been no easy feat. Several years of planning, training, and administrative work have been required to operate the growing TAVI program. In addition to physician and staff training, the center has invested time and money into expanding their hybrid operating room capabilities and administrative support. These two investments have been costly, but are also crucial to Penn's experience thus far.
Debate Continues Around Reimbursement and Profitability of TAVI