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

Exploratory Analysis of Observation StayExploratory Analysis of Observation Stay

Pamela Owens, Ph.D.Pamela Owens, Ph.D.Ryan Mutter, Ph.D.Ryan Mutter, Ph.D.

September, 2009September, 2009AHRQ Annual Meeting AHRQ Annual Meeting

Advancing Advancing Excellence in Excellence in Health CareHealth Care

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HistoryHistory

1988 – American College of Emergency 1988 – American College of Emergency Physicians (ACEP) creates first Observation Physicians (ACEP) creates first Observation Unit GuidelinesUnit Guidelines

1991 - ACEP creates specialty section of 1991 - ACEP creates specialty section of Observation MedicineObservation Medicine

2003 - CMS institutes reimbursement for 2003 - CMS institutes reimbursement for observation stays related to chest pain, heart observation stays related to chest pain, heart failure, asthmafailure, asthma

2008 – CMS removed diagnostic criteria for 2008 – CMS removed diagnostic criteria for reimbursementreimbursement


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Observation Stay DefinedObservation Stay Defined

Well-defined set of specific, clinically Well-defined set of specific, clinically appropriate services, which include appropriate services, which include ongoing short-term treatment, assessment, ongoing short-term treatment, assessment, and reassessment before a decision can be and reassessment before a decision can be made regarding whether the patients will made regarding whether the patients will require further treatment as hospital require further treatment as hospital inpatients or if they are able to be inpatients or if they are able to be discharged from the hospital.discharged from the hospital.

-- CMS, Pub. 100-02, Chapter 6, Section 20.5-- CMS, Pub. 100-02, Chapter 6, Section 20.5


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BackgroundBackground

Commonly ordered for patients who present Commonly ordered for patients who present to the ED and who require a significant period to the ED and who require a significant period of treatment or monitoring in order to make a of treatment or monitoring in order to make a decision about admission or dischargedecision about admission or discharge– Can also occur as a direct admission to Can also occur as a direct admission to

observation from the community.observation from the community.

May prevent unnecessary hospital admissionsMay prevent unnecessary hospital admissions May impact access to skilled nursing facilities May impact access to skilled nursing facilities

(SNFs) for Medicare beneficiaries(SNFs) for Medicare beneficiaries– Observation stay does not count toward three-day Observation stay does not count toward three-day

rulerule


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Use may be influenced by expected payerUse may be influenced by expected payer

– Time allowed in observationTime allowed in observation Medicare (Part B) minimum of 8 hours; up to 48Medicare (Part B) minimum of 8 hours; up to 48 Medicaid; up to 48 hoursMedicaid; up to 48 hours Private; varies considerably; up to 23 hoursPrivate; varies considerably; up to 23 hours

– Reimbursement in conjunction with inpatient stayReimbursement in conjunction with inpatient stay


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ObjectiveObjective

To examine if the use of observation stays To examine if the use of observation stays decreases the use of inpatient admissionsdecreases the use of inpatient admissions


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Methods: DataMethods: Data

Healthcare Cost and Utilization Project (HCUP) State Healthcare Cost and Utilization Project (HCUP) State Emergency Department Databases (SEDD) and State Emergency Department Databases (SEDD) and State Inpatient Databases (SID) Inpatient Databases (SID) Data Years: 2005-2007Data Years: 2005-2007 7 states (GA, MN, MO, NE, NY, TN, VT) with sufficient 7 states (GA, MN, MO, NE, NY, TN, VT) with sufficient

line-item detail for all yearsline-item detail for all years 21.6 million inpatient and ED records for 200521.6 million inpatient and ED records for 2005 22.0 million inpatient and ED records for 200622.0 million inpatient and ED records for 2006 22.1 million inpatient and ED records for 200722.1 million inpatient and ED records for 2007

Additional information on the HCUP at www.hcup-us.ahrq.govAdditional information on the HCUP at www.hcup-us.ahrq.gov


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MethodsMethods

Measures: Measures: Observation stayObservation stay

Revenue code of 762Revenue code of 762 Positive observation stay chargePositive observation stay charge CPT code of 99217-99220, 99234-99236CPT code of 99217-99220, 99234-99236

ED visitED visit Revenue code of 450-459Revenue code of 450-459 Positive emergency department chargePositive emergency department charge CPT code of 99281-99285CPT code of 99281-99285 Point of origin or admission source = EDPoint of origin or admission source = ED


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AnalysisAnalysis

HCUP analysis - unit of analysis is the visitHCUP analysis - unit of analysis is the visit

Analyses are performed using SASAnalyses are performed using SAS

Descriptive analysis aggregate and by stateDescriptive analysis aggregate and by state


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Results Results


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Results Results


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Results Results


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SummarySummary

Only slight variation is evident during 3 years.Only slight variation is evident during 3 years.

Slight increase in inpatient stays (.4%) and Slight increase in inpatient stays (.4%) and slightly greater increase in observation stays slightly greater increase in observation stays (3.8%) between 2005 and 2007.(3.8%) between 2005 and 2007.

Slight increase in ED visits resulting in Slight increase in ED visits resulting in admission (3.5%) between 2005 and 2007, but admission (3.5%) between 2005 and 2007, but – Greater increase in ED visits resulting in discharge Greater increase in ED visits resulting in discharge

following observation (12.9%) following observation (12.9%) – Greater decrease in ED visits resulting in admission Greater decrease in ED visits resulting in admission

following observation (13.4%)following observation (13.4%)


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SummarySummary

Drastic variation by stateDrastic variation by state

– ED visits resulting in admission (no obs), 2007ED visits resulting in admission (no obs), 2007 9.6% to 21.7%9.6% to 21.7%

– ED visits resulting in admission (with obs), 2007ED visits resulting in admission (with obs), 2007 0.1% to 1.3%0.1% to 1.3%

– ED visits resulting in discharge (with obs), 2007ED visits resulting in discharge (with obs), 2007 0.4% to 3.5%0.4% to 3.5%


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LimitationsLimitations

Analysis only exploratoryAnalysis only exploratory Short period of time due to data limitationsShort period of time due to data limitations Few states can provide necessary data Few states can provide necessary data

across timeacross time Known variability of coding by hospitalKnown variability of coding by hospital Complicated reimbursement structure Complicated reimbursement structure

makes billing more difficultmakes billing more difficult Identification of observation stays Identification of observation stays

dependent on line item detaildependent on line item detail


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ConclusionsConclusions

Worthy of additional analysesWorthy of additional analyses Future research – Data ValidityFuture research – Data Validity

– Coding variation across payerCoding variation across payer

– Coding variation across hospitalsCoding variation across hospitals

– Coding variation across statesCoding variation across states


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Future research – Quality and Value of CareFuture research – Quality and Value of Care– Quality and value of observation stay careQuality and value of observation stay care

– Quality and value of observation stay relative to Quality and value of observation stay relative to inpatient admissioninpatient admission Patient perspectivePatient perspective Health care system perspectiveHealth care system perspective


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Future research – Quality and Value of CareFuture research – Quality and Value of Care– Impact of observation stay utilization on ED Impact of observation stay utilization on ED

overcrowding or ED revisit rateovercrowding or ED revisit rate

– Expand Zhao’s HCFO-funded analysis Expand Zhao’s HCFO-funded analysis examining on how observation stays are used examining on how observation stays are used in Medicare program and how they affect in Medicare program and how they affect beneficiary cost sharing and hospital payments. beneficiary cost sharing and hospital payments. ((Lan Zhao, Ph.D., SSSLan Zhao, Ph.D., SSS))

Documents

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