Trends in observation care among Medicare fee-for-service beneficiaries at critical access hospitals, 2007-2009

Identifying Observation Stays In Medicare Data: Policy Implications of a Definition

Observation stays are increasingly common, yet no standard method to identify observation stays in Medicare claims is available, including events with status change. To determine the claims patterns of Medicare observation stays, define comprehensive claims-based methodology for future Medicare observation research and data reporting, and identify policy implications of such definition, we identified potential observation events in a 2014 20% random sample of Medicare beneficiaries with both Part A and B claims and at least 1 acute care stay (1,667,660 events). Observation revenue center (ORC) and Healthcare Common Procedure Coding System codes occurring within 30 days of an inpatient hospitalization were recorded. A total of 125,920 (7.6%) events had an ORC code, and 75,502 (4.5%) were in the outpatient revenue center. Claims patterns varied tremendously, and almost half (47.3%, 59,529) of the ORC codes were associated with an inpatient claim, indicating status change and demonstrating a need for clarity in observation policy. The proposed University of Wisconsin method identified 72,858 of 75,502 (96.5%) events with ORC codes as observation stays, and provides a comprehensive, reproducible methodology.

Evidence of Racial and Geographic Disparities in the Use of Medicare Observation Stays and Subsequent Patient Outcomes Relative to Short-Stay Hospitalizations

Purpose: To examine racial and geographic disparities in the use of—and outcomes associated with—Medicare observation stays versus short-stay hospitalizations.

Methods: We used 2007–2010 fee-for-service Medicare claims, including 3,555,994 observation and short-stay hospitalizations for individuals over age 65. We estimated linear probability models with hospital fixed effects to identify within-facility disparities in observation stay use, estimated in-hospital mortality, 30- and 90-day postdischarge mortality, return emergency department (ED) visits, and hospital readmissions as a function of placement in observation using linear probability models, propensity-score matching, and interaction terms.

Results: We identified racial and geographic disparities in the likelihood of observation stay use within hospitals (blacks 3.9% points more likely than whites, rural 5.4% points less likely than urban). Observation is associated with an increased likelihood of returning to the ED within 30 or 90 days and a decreased likelihood of readmission or mortality, but there are racial and geographic disparities in these outcomes.

Conclusion: While observation generally results in improved outcomes, disparities in these outcomes and the use of observation stays within hospitals are concerning and may be driven by clinical and nonclinical factors.

Chest Pain Patients at Veterans Hospitals Are Increasingly More Likely to Be Observed Than Admitted for Short Stays

Observation stays are an outpatient service used to diagnose and treat patients for extended periods of time while a decision is made regarding inpatient admission or discharge. Although the use of observation stays is increasing, little is known about which patients are observed and which are admitted for similar periods of time as inpatients. The aim was to identify patient characteristics associated with being observed rather than admitted for a short stay (<48 hours) within the Veterans Health Administration (VHA). In our longitudinal analysis, we used logistic regression within a generalized estimating equation framework to model observation stays as a function of patient characteristics, time trends, and hospital fixed effects. To minimize heterogeneity between groups, we limit our sample to patients with a presenting diagnosis of chest pain. Our analysis includes a total of 121 584 hospital events, which consist of all observation and short-stay admissions for chest pain patients at VHA hospitals between 2005 and 2013. Both the absolute and relative use of observation stays increased markedly over time. The odds of an observation stay were higher among women, but lower among older patients and rural residents. Despite strong evidence that chest pain patients are increasingly more likely to be observed than admitted, suggesting a substitution effect, we find little evidence of within-hospital disparities in VHA observation stay use.

Patient, hospital, and local health system characteristics associated with the use of observation stays in veterans health administration hospitals, 2005 to 2012

Recent studies have documented that a significant increase in the use of observation stays along with extensive variation in patterns of use across hospitals.The objective of this longitudinal observational study was to examine the extent to which patient, hospital, and local health system characteristics explain variation in observation stay rates across Veterans Health Administration (VHA) hospitals.Our data came from years 2005 to 2012 of the nationwide VHA Medical SAS inpatient and enrollment files, American Hospital Association Survey, and Area Health Resource File. We used these data to estimate linear regression models of hospitals' observation stay rates as a function of hospital, patient, and local health system characteristics, while controlling for time trends and Veterans Integrated Service Network level fixed effects.We found that observation stay rates are inversely related to hospital bed size and that hospitals with a greater proportion of younger or rural patients have higher observation stay rates. Observation stay rates were nearly 15 percentage points higher in 2012 than 2005.Although we identify several characteristics associated with variation in VHA hospital observation stay rates, many factors remain unmeasured.

Observation stays in administrative claims databases: underestimation of hospitalized cases

PURPOSE

Recent policy changes in the USA have led to an increasing number of patients being placed into observation units rather than admitted directly to the hospital. Studies of administrative data that use inpatient diagnosis codes to identify cohorts, outcomes, or covariates may be affected by this change in practice. To understand the potential impact of observation stays on research using administrative healthcare data, we examine the trends of observation stays, short (≤2 days) inpatient admissions, and all inpatient admissions.

METHODS

We examined a large administrative claims database of commercially insured individuals in the USA between 2002 and 2011. Observation stays were defined on the basis of the procedure codes reimbursable by Medicare or commercial insurers. We report monthly rates of observation stays and short inpatient admissions overall and by patient demographics.

RESULTS

We identified 5 355 752 observation stays from 2002 to 2011. Over the course of study, the rate of observation stays increased, whereas the rate of short inpatient stays declined. The most common reason for observation stays was nonspecific chest pain, also the third most common reason for short inpatient stays. The increasing trend of observation stays related to circulatory diseases mirrors the decreasing trend of short inpatient stays.

CONCLUSIONS

The use of observation stays has increased in patients with commercial insurance. Failure to account for observation stays may lead to an under-ascertainment of hospitalizations in contemporary administrative healthcare data from the USA.

Hospital, patient, and local health system characteristics associated with the prevalence and duration of observation care

OBJECTIVE

To examine the association between hospital, patient, and local health system characteristics and the likelihood, prevalence, and duration of observation care among fee-for-service Medicare beneficiaries.

DATA SOURCES

The 100 percent Medicare inpatient and outpatient claims and enrollment files for 2009, supplemented with 2007 American Hospital Association Survey and 2009 Area Resource File data.

STUDY DESIGN

Using a lagged cross-sectional design, we model the likelihood of a hospital providing any observation care using logistic regression and the conditional prevalence and duration of observation care using linear regression, among 3,692 general hospitals in the United States.

PRINCIPLE FINDINGS

Critical access hospitals (CAHs) have 97 percent lower odds of providing observation care compared to other hospitals, and they conditionally provide three fewer observation stays per 1,000 visits. The provision of observation care is negatively associated with the proportion of racial minority patients, but positively associated with average patient age, proportion of outpatient visits occurring in the emergency room, and diagnostic case mix. Duration is between 1.5 and 2.8 hours shorter at government-owned, for-profit hospitals, and CAHs compared to other nonprofit hospitals.

CONCLUSIONS

Variation in observation care depends primarily on hospital characteristics, patient characteristics, and geographic measures. By contrast, local health system characteristics are not a factor.