Trends in Observation Care Among Medicare Fee-for-Service Beneficiaries at Critical Access Hospitals, 2007-2009

Authors

  • Brad Wright PhD,

    Corresponding author
    • Center for Gerontology and Health Care Research, Brown University, Providence, Rhode Island
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  • Hye-Young Jung PhD(Cand.),

    1. Department of Health Services, Policy and Practice, Brown University, Providence, Rhode Island
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  • Zhanlian Feng PhD,

    1. Center for Gerontology and Health Care Research, Brown University, Providence, Rhode Island
    2. Department of Health Services, Policy and Practice, Brown University, Providence, Rhode Island
    3. RTI International, Waltham, Massachusetts
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  • Vincent Mor PhD

    1. Center for Gerontology and Health Care Research, Brown University, Providence, Rhode Island
    2. Department of Health Services, Policy and Practice, Brown University, Providence, Rhode Island
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  • Funding: This work was funded by the Retirement Research Foundation (Grant No. 2011–066), the National Institute on Aging (Grant No. P01AG027296) and the Agency for Healthcare Research and Quality (Grant No. 5T32H000011–27). The Medicare enrollment and claims data used in this analysis were made available through a data use agreement (DUA 21845) authorized by the Centers for Medicare and Medicaid Services.

  • Disclosures: None of the authors have any disclosures to report.

For further information, contact: Brad Wright; Center for Gerontology and Health Care Research; Brown University; 121 S. Main St., Box G-S121–6; Providence, RI 02912; e-mail: bradwright@brown.edu.

Abstract

Purpose

Observation care is used to evaluate patients prior to admission or discharge. Often beneficial, such care also imposes greater financial liability on Medicare beneficiaries. While the use of observation care has increased recently, critical access hospitals (CAHs) face different policies than prospective payment (PPS) hospitals, which may influence their observation care use.

Methods

We used 100% Medicare inpatient and outpatient claims files and enrollment data for years 2007 to 2009, and the 2007 American Hospital Association data to compare trends in the likelihood, prevalence and duration of observation stays between CAHs and PPS hospitals in metro and non-metro areas among fee-for-service Medicare beneficiaries over age 65.

Findings

While PPS hospitals are more likely to provide any observation care, the 3-year increase in the proportion of CAHs providing any observation care is approximately 5 times as great as the increase among PPS hospitals. Among hospitals providing any observation care in 2007, the prevalence at CAHs was 35.7% higher than at non-metro PPS hospitals and 72.8% higher than at metro PPS hospitals. By 2009, these respective figures had increased to 63.1% and 111%. Average stay duration increased more slowly for CAHs than for PPS hospitals.

Conclusions

These data suggest that a growing proportion of CAHs are providing observation care and that CAHs provide relatively more observation care than PPS hospitals, but they have shorter average stays. This may have important financial implications for Medicare beneficiaries.

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