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Medicare delays controversial 'observation' rule

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Medicare officials announced Thursday that they will delay enforcement of controversial new rules that define when hospital patients should receive observation care, rather than being admitted as inpatients, Kaiser Health News reports. The distinction is important to seniors, because the observation care status makes them ineligible for follow-up nursing home coverage, if needed.

"The new rules take effect Tuesday, but officials said they will not be enforced until at least Jan. 1. During that time, Medicare auditors will review a small sample of hospital admission records to insure that hospitals are working to properly implement the new standards, but will not penalize mistakes.

"The rules require hospitals to admit a patient who is expected to stay through at least two midnights. Those whose stays are expected to be shorter will be classified as observation patients, who generally pay higher out-of-pocket costs than inpatients.  Also, because Medicare requires a three-day inpatient hospital stay before it covers nursing home expenses, observation patients do not receive this benefit.

"The new rules have been criticized by the hospital industry, which claims they were confusing, and by patient advocates, who said the changes don’t protect seniors. Both groups are pressing Medicare to end the three-day requirement for nursing home coverage." Read more.

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