Exploratory Analysis of Observation Stay

1. Exploratory Analysis of Observation Stay Pamela Owens, Ph.D. Ryan Mutter, Ph.D. September, 2009 AHRQ Annual Meeting

2. 2 History 1988 – American College of Emergency Physicians (ACEP) creates first Observation Unit Guidelines 1991 - ACEP creates specialty section of Observation Medicine 2003 - CMS institutes reimbursement for observation stays related to chest pain, heart failure, asthma 2008 – CMS removed diagnostic criteria for reimbursement

3. 3 Observation Stay Defined Well-defined set of specific, clinically appropriate services, which include ongoing short-term treatment, assessment, and reassessment before a decision can be made regarding whether the patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. -- CMS, Pub. 100-02, Chapter 6, Section 20.5

4. 4 Background Commonly ordered for patients who present to the ED and who require a significant period of treatment or monitoring in order to make a decision about admission or discharge Can also occur as a direct admission to observation from the community. May prevent unnecessary hospital admissions May impact access to skilled nursing facilities (SNFs) for Medicare beneficiaries Observation stay does not count toward three-day rule

5. 5 Use may be influenced by expected payer Time allowed in observation Medicare (Part B) minimum of 8 hours; up to 48 Medicaid; up to 48 hours Private; varies considerably; up to 23 hours Reimbursement in conjunction with inpatient stay

6. 6 Objective To examine if the use of observation stays decreases the use of inpatient admissions

7. 7 Methods: Data Healthcare Cost and Utilization Project (HCUP) State Emergency Department Databases (SEDD) and State Inpatient Databases (SID) Data Years: 2005-2007 7 states (GA, MN, MO, NE, NY, TN, VT) with sufficient line-item detail for all years 21.6 million inpatient and ED records for 2005 22.0 million inpatient and ED records for 2006 22.1 million inpatient and ED records for 2007 Additional information on the HCUP at www.hcup-us.ahrq.gov

8. 8 Methods Measures: Observation stay Revenue code of 762 Positive observation stay charge CPT code of 99217-99220, 99234-99236 ED visit Revenue code of 450-459 Positive emergency department charge CPT code of 99281-99285 Point of origin or admission source = ED

9. 9 Analysis HCUP analysis - unit of analysis is the visit Analyses are performed using SAS Descriptive analysis aggregate and by state

10. 10 Results

11. 11 Results

12. 12 Results

13. 13 Summary Only slight variation is evident during 3 years. Slight increase in inpatient stays (.4%) and slightly greater increase in observation stays (3.8%) between 2005 and 2007. Slight increase in ED visits resulting in admission (3.5%) between 2005 and 2007, but Greater increase in ED visits resulting in discharge following observation (12.9%) Greater decrease in ED visits resulting in admission following observation (13.4%)

14. 14 Summary Drastic variation by state ED visits resulting in admission (no obs), 2007 9.6% to 21.7% ED visits resulting in admission (with obs), 2007 0.1% to 1.3% ED visits resulting in discharge (with obs), 2007 0.4% to 3.5%

15. 15 Limitations Analysis only exploratory Short period of time due to data limitations Few states can provide necessary data across time Known variability of coding by hospital Complicated reimbursement structure makes billing more difficult Identification of observation stays dependent on line item detail

16. 16 Conclusions Worthy of additional analyses Future research – Data Validity Coding variation across payer Coding variation across hospitals Coding variation across states

17. 17 Conclusions Future research – Quality and Value of Care Quality and value of observation stay care Quality and value of observation stay relative to inpatient admission Patient perspective Health care system perspective

18. Conclusions Future research – Quality and Value of Care Impact of observation stay utilization on ED overcrowding or ED revisit rate Expand Zhao’s HCFO-funded analysis examining on how observation stays are used in Medicare program and how they affect beneficiary cost sharing and hospital payments. (Lan Zhao, Ph.D., SSS)