Q&A: Follow-Up Question: Conversion Rates from Observation to Inpatient

August 12, 2016
Medicare Web

Q. The August 2 issue of Revenue Cycle Daily Advisor included a question about benchmark conversion rates from observation to inpatient status. With regard to that question, I think it may be helpful to know the average national conversion rate and average rate for critical access hospitals. Do you have that information?

A. My response to the original question was intended to help hospitals understand that observation practices should and do differ from one hospital to another depending upon the types of patients the hospital treats and an understanding of the observation instruction for Medicare patients. There is still a high error rate with observation stays continuing to exceed two midnights, according to CMS. For example, a surgical hospital should have a very low observation rate and hospitals that include a heart hospital should have a significantly higher rate due to chest pain patients who present to the ER and need to be ruled out. There are all types of variations among hospitals. CMS said the following: “A Medicare patients' chances of being admitted to the hospital or kept for observation depend on which hospital they go to—even when their symptoms are the same.” Given all these factors, I don’t think national or state averages are a benchmark to strive for. For that reason, I suggested the measurement of observation to inpatient discharges for several months and auditing to verify accuracy. Based upon this finding the hospital can establish their own benchmark and measure their data monthly to identify any change in practice that needs further investigation.

Deborah Hale, CCS, CCDS, president and CEO of Administrative Consultant Service, LLC, in Shawnee, Oklahoma, answered this question.

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