In order for Medicare beneficiaries to receive access to Medicare’s skilled nursing benefit, the hospital must classify them as an inpatient. Unfortunately, more and more patients are either classified as outpatients receiving observation services instead of inpatients.
Studies have found that hospitals are classifying patients as outpatients more frequently. Researchers have suggested that hospitals are using outpatient observation status as a substitute for inpatient status – meaning more and more patients aren’t qualified for their Medicare benefits.
Hospitals are hesitant to classify patients as inpatients because they are concerned about the Recovery Audit Contractor (RAC) program, which can deny hospitals reimbursement if they conclude that a patient was incorrectly classified as an inpatient. Additionally, the hospital could face other penalties – causing the decrease in patients labeled inpatient.
Currently, Congress is working to solve the problem and ensure that Medicare beneficiaries who qualify for Medicare’s skilled nursing benefit receive adequate treatment. Multiple congresspersons are working on bills that improve access to necessary Medicare benefits.