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Observation Care: Ethical and Legal Considerations for the Emergency Physician
The Journal of Emergency Medicine, Vol. 50, No. 3, pp. 527–533, 2016 Copyright Ó 2016 Elsevier Inc. Printed in the USA. All rights reserved 0736-4679/$ - see front matter
http://dx.doi.org/10.1016/j.jemermed.2015.11.019
Ethics in Emergency Medicine OBSERVATION CARE: ETHICAL AND LEGAL CONSIDERATIONS FOR THE EMERGENCY PHYSICIAN Nissa J. Ali, MD, MED,* John Jesus, MD,† and Peter B. Smulowitz, MD, MPH* *Department of Emergency Medicine, Beth Israel Deaconess Medical Center and Harvard Medical School, Boston, Massachusetts and †Department of Emergency Medicine, Christiana Care Health System, Newark, Delaware Corresponding Address: Nissa J. Ali, MD, MED, Department of Emergency Medicine, Beth Israel Deaconess Medical Center, 330 Brookline Ave, Boston, MA 02215
, Abstract—Background: The Medicare observation rules remain controversial despite Centers for Medicare and Medicaid Services revisions and the new 2-midnight rule. The increased financial risks for patients and heightened awareness of the rule have placed emergency physicians (EPs) at the center of the controversy. Discussion: This article reviews the primary ethical and legal (particularly with respect to the Emergency Medical Treatment and Active Labor Act) implications of the existing observation rule for EPs and offers practical solutions for EPs faced with counseling patients on the meaning and ramifications of the observation rule. Conclusions: We conclude that while we believe it does not violate the intent of the Emergency Medical Treatment and Active Labor Act to respond to patient questions about their admission status, the observation rules challenge the ethical principles of transparency related to the physician–patient relationship and justice as fairness. Guidance for physicians is offered to improve transparency and patient fairness. Ó 2016 Elsevier Inc. , Keywords—ethical; 2-midnight
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(RAC) program in 2005. Debate over observation policies has generally centered on potential financial implications for hospitals and Medicare patients. In a summary of the financial implications, written before the introduction of the ‘‘2-midnight rule,’’ Baugh and Schuur assert that observation care promotes cost shifting onto patients, relieving the hospital of the risk of adverse action by RAC audits, rather than promoting incentives for higher value, protocol-driven observation unit care (1). For patients, the observation rule can be enormously confusing—particularly for patients lying in inpatient hospital beds that are technically receiving outpatient treatment. The issue is potentially so confusing that Medicare released an informational brochure entitled, ‘‘Are You a Hospital Inpatient or Outpatient? If you Have Medicare–Ask!’’ (2). In response to the controversy, in 2013 the Centers for Medicare and Medicaid Services (CMS) released the 2-midnight rule. Despite the new rule, there continues to be debate over observation and its associated financial implications. The continued controversy, financial risks for patients, and heightened awareness of the rule has—at least anecdotally—resulted in a growing burden on emergency physicians (EPs). Patients are becoming more aware of the financial impact of their admission status and are asking EPs to provide them with specific information about their status. Given the increasing role EPs are forced to play, our goal is to discuss major ethical
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INTRODUCTION Observation care has been a topic of controversy since the refinement of Medicare’s observation codes in 1996 and the introduction of the Recovery Audit Contractor Reprints are not available from the authors.
RECEIVED: 27 February 2015; FINAL SUBMISSION RECEIVED: 10 November 2015; ACCEPTED: 17 November 2015 527
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considerations EPs will be faced with relating to the controversial rule. In addition, the paper will provide a brief review of key consequences for patients, highlight legal considerations, and provide recommendations for clinicians on how to approach patients who are impacted by the observation rule. Summary of the Observation Rules and Their Financial Impact on Patients The term ‘‘observation status’’ generally refers to hospitalized patients that are technically considered by Medicare as outpatients for billing purposes. Rules pertaining to observation status took their modern form in November 1996, when CMS refined the payment codes for observation as a set of clinically appropriate services that could be delivered in any setting, including a physician’s office, an emergency department (ED), or an inpatient ward, with billing administered as outpatient under Medicare Part B (1). In 2009, CMS further outlined observation as ‘‘a 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 patients will require further treatment as hospital inpatients or if they are able to be discharged’’ (3). Observation stays were initially intended to last <24 hours, with only rare exceptions spanning >48 hours (3). Controversy over observation placement grew because of the increased number of patients placed into observation without a well-defined set of services, with increasing durations of stay and increased out of pocket expenditures for patients (1). This potential increase in patient costs stems from the fact that inpatient hospitalizations are billed differently than observation stays. For inpatients, Medicare Part A covers hospital costs for the first 60 days and Medicare Part B covers 80% of physician services after a one-time deductible (2). Observation patients are responsible for a copayment for each individual outpatient hospital service in addition to 20% of physician services under Part B after the Part B deductible (2). Observation patients also are responsible for pharmacy charges for ‘‘outpatient’’ medications and for all skilled nursing facility charges, because observation time does not qualify toward the 3-day hospitalization requirement for skilled nursing facility benefits (1). Inpatient hospitalizations accounted for 25% of Medicare spending in 2012 and continue to be a main focus of cost control for CMS (1,4). To save costs, CMS developed the RAC program in 2005, which permits contractors to retroactively audit claims and recover money if overbilling occurred from inappropriate inpatient status (5). In 2013, 93% of hospitals experienced RAC activity, with $2.6 billion in denials reported
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(6). In response to the audits, there was a nearly 88% increase in observation hours from 2006 through 2012 and an increase in the amount of time patients spent in observation (4,7). As a response, CMS released the 2-midnight rule in October of 2013, shifting the criteria for placement into observation status to a time-based rule (8). The rule mandates that patients hospitalized for <2 midnights are classified as observation and $2 midnights as inpatients (9). Unfortunately, this new modification fails to address the cost shifting issues reviewed above and has its own unanticipated repercussions. Criticisms of the new rule center around the time and day of arrival predicting the likelihood of staying past 2 midnights, and the potential for higher patient costs if hospitals initially classify patients as observation and then flip to inpatient after a second midnight (10,11). Modifications to the rule are being considered by CMS, though none of these appear imminent (12). DISCUSSION Role of the Emergency Physician The role of the EP in determining patient placement into observation or inpatient status varies between hospitals. Certification regulations state that the admitting physician, surgeon, EP, or the patient’s primary care physician can certify an inpatient admission (13). An inpatient admission order can happen any time before discharge (13). It is probably most appropriate for the admitting physician to determine the admission status, because the 2-midnight rule invokes a time frame that is affected by the pace of testing, which is likely unknown by the EP. However, in many organizations, the EP will make the initial decision to admit a patient to inpatient or observation status. When faced with this role, the EP must assess whether inpatient admission is warranted based on if medical services are expected for >2 midnights (14). CMS recommends that the decision take various factors into consideration, including the patient’s age, disease processes, comorbidities, and impact of discharge (14). CMS advises that the ordering physician should support inpatient placement with complete documentation, including signs/symptoms, comorbidities, medical needs, risk stratification, risk factors for adverse events if discharged, and any other appropriate considerations (14). The admission status specified by an EP is not binding and should be reevaluated by the admitting physician. Status can be changed at any time before discharge by an ordering physician as long as requirements are met and appropriately documented (15). The heightened awareness of the rule and its associated financial risks for patients has anecdotally increased the burden on EPs to explain an admission into
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observation status. The challenges of a busy ED, lack of education surrounding observation rules, legal ambiguities, and lack of acceptance of a seemingly paradoxical rule that places admitted patients into outpatient status are among the difficulties EPs face in managing patient concerns about observation status. Emergency Medical Treatment and Active Labor Act Considerations In the context of EPs facing the task of responding to patient questions regarding admission under observation status, a major distinction from other health care settings is that ED providers must abide by Emergency Medical Treatment and Active Labor Act (EMTALA) requirements, which generally prevent payment issues from influencing the nature or timing of treatment needed (16). Congress enacted EMTALA in 1986 as a federal law requiring that anyone presenting to an ED be stabilized and treated regardless of their insurance status or ability to pay (17). Every patient is covered under EMTALA until a medical provider has conducted an appropriate medical screening examination, stabilized the patient’s emergency medical condition, or admitted the individual (17). Given that hospital observation is considered an outpatient service, the hospital’s EMTALA obligation continues to apply during placement under observation status (18). If a patient has been admitted as inpatient, EMTALA no longer pertains (18). There is no official policy from CMS as to whether physicians can engage in discussions with patients about their financial obligations specifically related to observation while in the ED. However, based on CMS directives and EMTALA clarifications, we believe it is against the intent of EMTALA to proactively provide patients in observation status with information about their financial obligations, particularly should that information in any way discourage a patient from staying in the hospital (18,19). It is not, however, against the intent of EMTALA to respond to patient questions about their admission status or financial obligations as long as all emergency medical conditions have been stabilized according to the EMTALA definition, which may differ from a physician’s general sense of medical stability (16–18). Nevertheless, any inappropriate financial conversations with a patient that has an emergency medical condition may place the hospital at risk of an EMTALA violation (16,19). While it is entirely plausible that information could be provided to patients explaining in general terms the billing differences of observation compared with inpatient admission without potentially influencing a patient’s decision (see Appendix A for a sample informational pamphlet), unless CMS were to revise its directives with respect to EM-
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TALA it seems most prudent for hospitals to not provide information proactively if the EMTALA obligation still applies. If an individual asks specific questions regarding the potential financial implications of inpatient or observation treatment, information may be given in response to their questions as long as it is provided in a way that does not discourage a patient from receiving stabilizing treatment. If the EP provides financial information before a medical screening examination or stabilization of emergency conditions that dissuades the patient from receiving stabilizing treatment, they are at risk of violating EMTALA (18). Finally, hospitals and providers should be encouraged to refer explicitly to EMTALA protections when faced with individuals that inquire about billing or financial details. If a patient requests to sign out against medical advice (AMA) after a conversation, as per usual protocol every attempt should be made to persuade the patient to stay to receive necessary medical services. However, per CMS clarifications, ‘‘if an individual leaves a hospital AMA or LWBS (left without being seen), on his or her own free will (no coercion or suggestion) the hospital is not in violation of EMTALA’’ (20). Appropriate and detailed documentation should be completed for any patient that signs out AMA, taking particular care to represent clearly in the medical record decision-making capacity, an adequate disclosure of risks, and that any financial information provided to the patient in no way served to discourage the patient from receiving additional care under observation status or otherwise (20,21). Every EMTALA violation is complaint-specific and the individual facts (including medical record documentation) would be considered by CMS in the event of a potential infraction. Ethical Considerations Regarding the Observation Rules The ethical principles respect for persons, justice, nonmaleficence, and beneficence derive from ‘‘a set of norms that bind all [morally serious] persons in all places,’’ and form the basis for U.S. federal policy on the treatment of human subjects in research (22). These principles are prima facie obligations, and should be used as a framework, rather than strict rules, with which to evaluate moral problems. As such, each principle must be fulfilled unless an equally important competing obligation outweighs it in pursuit of ‘‘the ‘greatest possible balance’ of right over wrong’’ (22). Ethical issues relating to the observation rule challenge the value of the patient–physician relationship by making it almost impossible to be passively transparent or proactively honest with patients. The basic principles of respect for persons and justice as fairness are the most relevant to this discussion. Respect for persons
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requires that we treat patients as autonomous agents, and to protect those with diminished autonomy, whereas justice as fairness requires that equals be treated equally (23). These principles can be considered on two levels: 1) those that determine a physician’s responsibility to their patients, and 2) those that can be used to evaluate the observation rule itself. The observation rule makes it difficult for EPs to be fully transparent with their patients, infringing on the patient–physician relationship by compromising the principle of respect for persons. It does so by preventing physicians from conveying the information necessary to allow patients to make informed autonomous decisions about the care they receive. Transparency involves providing a patient full access to information about their health care, associated costs, and any additional facts the patient may want to understand, not just limited information that providers feel a patient should know. Physicians are expected to disclose, in a manner that the patient can comprehend, whatever is considered material to the patient’s understanding of their situation, including the costs and burdens of treatment, the nature of the illness and potential treatments, and errors made in the course of care (24). When faced with high treatment costs, patients may have to make difficult choices between accepting the care offered or devoting those resources to other equally important competing interests, such as food and housing. Although physicians are not responsible for choosing amongst patients’ competing interests, respecting the decision-making capacity of their patients does require that they provide them with the information necessary to decide for themselves (25). These ethical tenets, based upon the principle of respect for persons, allow patients to believe that caregivers have their best interest in mind. Patients who present to the ED and require hospitalization are not an exception. Therefore, with respect to admission status, EPs should be as transparent as possible, enabling the patient to participate and make informed decisions about their hospitalization. Another consideration is the level of detail to provide. While truthful, informing patients of every aspect of their care and possible associated costs is not practical for expedited care delivery (26). One proposal for a framework of communication between patient and physician is to include ‘‘what a reasonable person would want to know to make an intelligent and informed treatment decision’’ (27). Unfortunately, the existence of EMTALA explicitly prevents physicians from being transparent with patients about the potential financial obligations associated with an observation admission. Physicians must wait for patients to ask questions about their admission and only then may respond. As such, EMTALA appears to be directly in conflict with the principle of respect for per-
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sons. Moreover, admission status may not be determined at the time a hospitalization decision is made. In addition, given the complicated reimbursement algorithms of our current health care system, definitive projections of patients’ out of pocket costs are next to impossible to determine in the ED. The challenges stem from complexities that span from patients’ secondary insurance, expected duration of stay in the hospital, previous admissions in the preceding 60 days, medications considered by Medicare to fall under outpatient treatment, and whether it is anticipated that the patient will require a skilled nursing facility after hospital discharge. As a result, even if EMTALA restrictions no longer apply, full transparency may not achievable in the ED in all cases. Although EMTALA provisions and the logistics of full disclosure regarding specific patient financial information or admission status may complicate the physician’s task, these challenges do not completely absolve EPs from providing at least what information is known or that may reasonably be accessed. At whatever stage is feasible and allowable, EDs or hospitals should provide resources to impart enough information to allow patients to understand the limitations in provider determinations of admission status, in addition to the variables and the process by which such determinations are made. Because patients’ hospitalization status, in particular, can have dramatic effects on patient cost-sharing which may, in turn, impact other equally important patient interests, patients should be provided with enough information to enable them to make informed autonomous decisions. Insofar as it limits the ability of the EP to provide proactive and detailed information about the admission status and financial obligations, EMTALA grossly limits the physician’s capability to meet optimal transparency. Another major limiting factor for providing patients with clear and consistent information in terms of their admission status is the lack of consistency across hospitals in the classification of inpatient and observation stays. On a broader level, this highlights ethical concerns inherent to the observation rule and its implementation. The inconsistency between hospitals challenges the ethical consideration of justice as fairness. The introduction of the 2-midnight rule has not helped resolve the issue of arbitrary variation in the treatment of patients with similar illnesses and the need for similar treatments. The association of time of day of admission means that patients with similar durations of stay, similar conditions, and similar needs for skilled nursing facility coverage may be given a different hospitalization status, frequently resulting in increased financial burden, based simply on the time of day the order is placed to hospitalize a patient (10). This situation is unfair to those patients with greater out of pocket costs when they are placed into ‘‘observation’’ status as it fails ‘‘to treat similar cases similarly
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and equals equally,’’ a basic ethical principle of justice in our cultural tradition (23,28). Translating Ethical Principles into Practical Solutions Taking into account the sum of legal and ethical considerations discussed above, there are steps organizations could consider to better cope with Medicare’s observation rules. Potential options for information that could be provided to improve transparency include: 1) proactive notification (as opposed to reacting to a patient’s request) of a patient’s preliminary status as inpatient or observation and any updates on changes in their status, but without any reference to the financial obligations that may accompany either status—this strategy would appear to satisfy the ethical responsibilities to the extent permissible under EMTALA and would allow patients the opportunity to then ask additional questions about their admission status; 2) pamphlets/educational materials that may be given to patients in response to their questions to describe why their hospitalization status may be difficult to determine, what factors are involved, and why their status might change; and 3) access to case managers who can help provide information on patient status, financial details (as permitted by EMTALA), and answer questions. To reiterate a key point with respect to EMTALA, CMS directives appear to prevent providers and hospitals from proactively engaging in conversations with patients regarding their admission status and financial obligations before a medical screening examination and the stabilization of emergency medical conditions as opposed to responding directly to patient questions (16–19). Optimally, to improve transparency even if a patient’s status is unknown at the time of admission, an informational pamphlet could be developed by hospitals— or a national professional society like the American College of Emergency Physicians. The informational sheet should include a review of the basics of the decision to place a patient into observation or inpatient status and the general financial considerations of this decision based on Medicare’s standard payment protocols. Appendix A includes a sample pamphlet that could serve as a model for one given to patients in response to their questions, which would ease the burden on EPs by providing patients with standardized information. This pamphlet should not be given proactively if the patient has an unstabilized emergency medical condition and EMTALA applies, because there is the potential that providing this information could serve to discourage patients from staying in the hospital. However, as previously discussed, because the ability to provide this information proactively would better meet the physician’s ethical responsibility to their patient, we would suggest that hospitals review such informational mate-
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rials with their regional CMS office and determine if in fact these materials are suitable to be distributed proactively at the time of admission to inpatient or observation, rather than only in response to patient questions without violating the intent of EMTALA. This strategy might promote a review of federal CMS policy, which is of fundamental importance because the current ‘‘restriction’’ on full discussion of a patient’s potential financial obligations runs counter to a physician’s ethical duty and is simply impractical in the current practice environment where EPs may be making an initial determination on admission status but are not permitted to then review the details of this with patients. Another useful solution would be the presence of 24hour case managers in the ED. Their role can include assistance in determination of observation or inpatient status and responding to patient specific questions. The cost of case managers may be offset by the potential to reduce discretionary admissions to inpatient status that may result in RAC activity. Smaller hospitals could consider sharing a case manager with the inpatient unit. However, we recognize that the expense of 24-hour case managers may be cost prohibitive for many EDs, and therefore alternative suggestions are discussed below. If a case manager is not available, we recommend that the EP answer patient questions to the best of their ability and then refer to the hospital case manager to engage the patient in a more nuanced discussion. Such a discussion would occur after a patient leaves the ED or at the earliest possible time during their hospitalization. It is also fundamentally important that EPs are educated on the observation rules to be able to answer patient questions. The educational pamphlet will be a useful resource to physicians needing ready information. In addition, we suggest providing online or onsite training sessions to educate EPs. The training should include general information on the rules, the potential patient financial impact of observation, and a review of EMTALA as it relates to discussing observation status with patients. In addition, site-specific protocols should be presented, such as the role of case managers, the decision point for admission to observation versus inpatient (i.e., is the patient placed inpatient by the EP or by the admitting physician), the responsibilities of the EP to patients being admitted, and information available for patients. For EDs and hospitals, we recommend creating protocol-driven dedicated observation units that will bring patients high-value observation care (such as those that exist in a typical ED observation unit). Unlike ward observations, dedicated observation units have been shown to be beneficial, with an estimated savings of $3.1 billion from expanding observation units to hospitals without them (29). In addition, some hospitals have received waivers of the 3-day inpatient stay, allowing
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patients to bypass the hospital in observation status and be placed into skilled nursing or rehabilitation facilities directly from the ED (30). CONCLUSION Controversies over the Medicare observation rules remain despite CMS revisions and the new 2-midnight rule. Ethical issues relating to the observation rule challenge the value of the patient–physician relationship by making it almost impossible to be transparent with patients, violating the basic principles of respect for persons and justice as fairness. Our review did not uncover any legal contraindications that would prevent the EP from discussing a patient’s admission status into observation or related financial billing associated with the Medicare observation rules, as long as discussions occur after a medical screening examination and the stabilization of emergency medical conditions, and with financial information delivered only in direct response to patient questions (16–19). We reviewed some interim steps that EPs and hospitals can take to improve transparency and patient fairness. Unfortunately, the suggestions outlined above only represent potential improvements to a flawed system. The optimal solution would be for CMS to abandon the current observation rule and the role of the RAC, which results in inadequate transparency and unfair variation in the rule’s implementation, while simultaneously exposing patients to significant financial risk. In the meantime, we suggest implementing a few practical solutions to fulfill the EP’s ethical duty to inform patients to the best of our ability on the meaning and impact of the observation rules. In addition to improving education for EPs and augmenting hospital resources when possible, we favor using an informational pamphlet to respond to patient questions, such as Appendix A. Accurate information for patients is essential for fulfilling the EP’s ethical obligations and allowing patients to make reasonably informed decisions with unbiased information. REFERENCES 1. Baugh CW, Schuur J. Observation care—high-value care or a costshifting loophole? N Engl J Med 2013;369:302–5. 2. Medicaid website. Are you a hospital inpatient or outpatient? If you have Medicare – ask! Available at: http://www.medicare.gov/pubs/ pdf/11435.pdf. Accessed November 27, 2014. 3. Centers for Medicare and Medicaid Services website. Medicare benefit policy manual, chapter 6-hospital services covered under Part B, 2014. Available at: https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/downloads/bp102c06.pdf. Accessed November 25, 2014. 4. Medicare Payment Advisory Commission website. A data book: health care spending and the Medicare program. Available at: http://www.medpac.gov/documents/publications/jun14databook entirereport.pdf?sfvrsn =1. Accessed November 25, 2014.
5. Morrissey J. Understanding and managing RAC. Available at: http:// www.trusteemag.com/display/TRUnewsarticle.dhtml?%20dcrPath=/ templatedata/HF_Common/NewsArticle/data/TRU/Magazine/2013/ Mar/1303TRU_coverstory&domain=TRUSTEEMAG. Accessed November 26, 2014. 6. American Hospital Association website. Exploring the impact of the RAC program on hospitals nationwide. Available at: http://www. aha.org/content/14/13q4ractracresults.pdf. Accessed November 28, 2014. 7. Feng Z, Wright B, Mor V. Sharp rise in Medicare enrollees being held in hospitals for observation raises concerns about causes and consequences. Health Aff (Millwood) 2012;31:1251–9. 8. Office of Inspector General website. Admitted or not? The impact of medicare observation status on seniors. Available at: http://oig.hhs. gov/testimony/docs/2014/Statement_Aging_Committee_07302014. pdf. Accessed November 25, 2014. 9. Centers for Medicare and Medicaid Services website. Inpatient prospective payment system 1599-F and fiscal year 2014 final rule. Available at: http://www.gpo.gov/fdsys/pkg/FR-2013-08-19/pdf/ 2013-18956.pdf. Accessed November 27, 2014. 10. Sheehy AM, Graf B, Gangireddy S, Hoffman R, Ehlenbach M, Heidke C. Hospitalized but not admitted: characteristics of patients with ‘‘observation status’’ at an academic medical center. JAMA Intern Med 2013;173:1991–8. 11. Carlson J. Auditing inpatient stays. Mod Healthc 2013;43:9–10. 12. Bhupathy V, Landauer R. CMS proposed to modify- but continues to stand behind – its ‘‘two-midnight’’ rule. Healthcare Law Blog. Available at: http://www.sheppardhealthlaw.com/ 2015/07/articles/centers-for-medicare-and-medicaid-services-cms/ cms-proposes-to-modify-but-continues-to-stand-behind-its-twomidnight-rule/?utm_source=Mondaq&utm_medium=syndication &utm_campaign=View-Original. Accessed July 28, 2015. 13. Centers for Medicare and Medicaid Services website. Hospital inpatient admission order and certification. Available at: http:// www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Acute InpatientPPS/Downloads/IP-Certification-and-Order-01-30-14.pdf. Accessed November 25, 2014. 14. Centers for Medicare and Medicaid Services website. Frequently asked questions 9240: what factors should the physician take into consideration when making the admission decision and document in the medical record? Available at: https://questions.coms.gov/ faq.php?id=5005&faqID=9240. Accessed November 2, 2014. 15. Centers for Medicare and Medicaid Services website. Recovery auditors findings resulting from medical necessity reviews of renal and urinary tract disorders. Available at http://www.cms.gov/ Outreach-and-Education/Medicare-Learning-NetworkMLN/MLN MattersArticles/downloads/SE1210.pdf. Accessed July 1, 2015. 16. Center for Clinical Standards and Quality/Survey and Certification Group website. Emergency Medical Treatment and Labor Act (EMTALA) requirements & conflicting payor requirements or collection practices. Ref: S&C: 14-06-Hospitals/CAHs. Available at: http:// www.cms.gov/Medicare/Provider-Enrollment-and-Certification/ SurveyCertificationGenInfo/Downloads/Survey-and-Cert-Letter-1406.pdf. Accessed November 24, 2014. 17. Emergency Medical Treatment and Active Labor Act. 42 U.S.C. x 1395dd. 1986. 18. Center for Clinical Standards and Quality/Survey and Certification Group website. Inpatient Prospective Payment System (IPPS) 2009 final rule revisions to Emergency Medical Treatment and Labor Act (EMTALA) regulations. Available at: https://www.cms.gov/Medicare/ Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/ downloads/SCLetter09-26.pdf. Accessed November 25, 2014. 19. Centers for Medicare and Medicaid Services website. Clarifying policies related to the responsibilities of medicare-participating hospitals in treating individuals with emergency medical conditions. Available at: http://www.cms.gov/Regulations-and-Guidance/ Legislation/EMTALA/downloads/CMS-1063-F.pdf. Accessed July 1, 2015. 20. Centers for Medicare and Medicaid Services website. Interpretive guidelines – responsibilities of Medicare participating hospitals in emergency cases. Available at: http://cms.hhs.gov/Regulations-
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and-Guidance/Guidance/Manuals/downloads/som107ap_v_emerg. pdf. Accessed July 1, 2015. Levy F, Mareiniss DP, Corianne L. The importance of proper against-medical-advice (AMA) discharge. J Emerg Med 2012;43: 516–20. Beauchamp T, Childress J. Principles of biomedical ethics. 6th edn. Oxford, United Kingdom: Oxford University Press; 2009. National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research, Department of Health, Education and Welfare. The Belmont Report (DHEW pub. no. (OS) 78-0012). Washington, DC: United States Government Printing Office; 1978. American College of Physicians website. Healthcare transparency – focus on price and clinical performance information. Avaialable at: https://www.acponline.org/advocacy/current_policy_papers/assets/ transparency.pdf. Accessed July 1, 2015. Hall A. Financial $ide effects: why patients should be informed of costs. Hastings Cent Rep 2014;44:41–7.
533 26. Jesus J, Grossman SA, Derse AR, Adams JG, Wolfe R, Rosen P. Ethical problems in emergency medicine: a discussion-based review. 1st edn. Philadelphia, PA: John Wiley & Sons, Ltd; 2012. 27. Brock DW. Informed consent. In: VanDeVeer D, Regan T, eds. Health care ethics: an introduction. Philadelphia, PA: Temple University Press; 1987:98–116. 28. Childress J. Triage in response to bioterrorist attack. In: Moreno J, ed. In the wake of terror: medicine and morality in a time of crisis. Cambridge, MA: MIT Press; 2003:72–93. 29. Baugh CW, Venkatesh AK, Hilton JA, Samuel PA, Schuur JD, Bohan JS. Making greater use of dedicated hospital observation units for many short-stay patients could save $3.1 billion a year. Health Aff (Millwood) 2012;31:2314–23. 30. Evans M. Reform update: Medicare offers waiver of 3-day rule for some ACOs, bundled payments. Available at: http://www. modernhealthcare.com/article/20140806/NEWS/308069965. Accessed July 24, 2015.
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APPENDIX A
SAMPLE OBSERVATION CARE PAMPHLET FOR MEDICARE PATIENTS Your doctor has decided that you have a medical condition that needs additional treatment in the hospital. If you are a Medicare patient, at this point you may be placed into the hospital in either ‘‘observation’’ or ‘‘inpatient’’ status. The purpose of this pamphlet is to explain the difference between observation and inpatient status for our patients. Please note that this information is intended for informational purposes only and is in no way intended to discourage you from staying in the hospital. What is the difference between inpatient and outpatient status? You’re an inpatient when you’re formally admitted to a hospital with a specific doctor’s order (E1). You’re an outpatient if you’re receiving emergency department services, observation services, outpatient surgery, or any other hospital service without a doctor’s order to admit you as an inpatient (E1). This is true even if you spend the night in the hospital (or up to 2 midnights). Who is placed into observation status? Per the Centers for Medicare and Medicaid Services (CMS) guidelines, patients are placed in observation status if they are expected to be hospitalized for < 2 midnights (with a few exceptions) (E2). The decision for inpatient or observation admission is a complex process based on multiple factors, including your need for medically necessary hospital care, timing of anticipated procedures, your predicted response to treatment, etc. What are the differences in billing for observation versus inpatient? For inpatients, Medicare Part A covers hospital costs for the first 60 days and Medicare Part B covers 80% of physician services after a onetime deductible (E1). Under observation, Medicare Part B covers 80% of each individual outpatient hospital service and 80% of physician services after the Part B deductible. Patients are responsible for outpatient medication pharmacy charges and for skilled nursing facility charges if this follows your hospital stay (observation time doesn’t qualify toward the 3-day hospitalization requirement for skilled nursing facility benefits) (E1).
Specific financial information related to your visit may not be allowed to be discussed in the emergency department because of EMTALA regulations (E3). Who makes the decision on whether you are in observation or inpatient status? You may be placed into observation or inpatient by your emergency room physician or your admitting physician. However, this may change at any time before discharge based on your course in the hospital (E4). Why would your admission status change? Your placement into observation may change to inpatient if your stay is anticipated to last >2 midnights. Or you may be changed from inpatient to observation if your stay is anticipated to be < 2 midnights. At the time of your initial placement into observation, there are factors about your hospital stay that may not yet be known. This makes it difficult to anticipate your total length of time in the hospital as well as the final billing costs associated with your stay. Who to ask if you have additional questions Ask to speak with your case manager if you have additional questions. The case manager may not be available immediately, may not have specific details about your anticipated stay, and may not be able to discuss billing details given EMTALA restrictions, but will do their best to answer your questions. Please refer to Medicare’s publication ‘‘Are you a hospital inpatient or outpatient? If you have Medicare–ask! May 2014. ’’ That publication has been provided along with this pamphlet for additional information (E1). REFERENCES E1. Medicaid website. Are you a hospital inpatient or outpatient? If you have Medicare – ask! Available at: http://www.medicare.gov/pubs/ pdf/11435.pdf. Accessed November 27, 2014. E2. Centers for Medicare and Medicaid Services website. Inpatient prospective payment system 1599-F and Fiscal year 2014 final rule. Available at: http://www.gpo.gov/fdsys/pkg/FR-2013-0819/pdf/2013-18956.pdf. Accessed November 27, 2014. E3. Center for Clinical Standards and Quality/Survey and Certification Group website. Inpatient Prospective Payment System (IPPS) 2009 final rule revisions to Emergency Medical Treatment and Labor Act (EMTALA) regulations. Available at: https://www.cms.gov/ Medicare/Provider-Enrollment-and-Certification/ SurveyCertificationGenInfo/downloads/SCLetter09-26.pdf. Accessed November 25, 2014. E4. Centers for Medicare and Medicaid Services website. Hospital inpatient admission order and certification. Available at: http://www.cms. gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatient PPS/Downloads/IP-Certification-and-Order-01-30-14.pdf. Accessed November 25, 2014.
http://dx.doi.org/10.1016/j.jemermed.2015.11.019
Ethics in Emergency Medicine OBSERVATION CARE: ETHICAL AND LEGAL CONSIDERATIONS FOR THE EMERGENCY PHYSICIAN Nissa J. Ali, MD, MED,* John Jesus, MD,† and Peter B. Smulowitz, MD, MPH* *Department of Emergency Medicine, Beth Israel Deaconess Medical Center and Harvard Medical School, Boston, Massachusetts and †Department of Emergency Medicine, Christiana Care Health System, Newark, Delaware Corresponding Address: Nissa J. Ali, MD, MED, Department of Emergency Medicine, Beth Israel Deaconess Medical Center, 330 Brookline Ave, Boston, MA 02215
, Abstract—Background: The Medicare observation rules remain controversial despite Centers for Medicare and Medicaid Services revisions and the new 2-midnight rule. The increased financial risks for patients and heightened awareness of the rule have placed emergency physicians (EPs) at the center of the controversy. Discussion: This article reviews the primary ethical and legal (particularly with respect to the Emergency Medical Treatment and Active Labor Act) implications of the existing observation rule for EPs and offers practical solutions for EPs faced with counseling patients on the meaning and ramifications of the observation rule. Conclusions: We conclude that while we believe it does not violate the intent of the Emergency Medical Treatment and Active Labor Act to respond to patient questions about their admission status, the observation rules challenge the ethical principles of transparency related to the physician–patient relationship and justice as fairness. Guidance for physicians is offered to improve transparency and patient fairness. Ó 2016 Elsevier Inc. , Keywords—ethical; 2-midnight
legal;
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(RAC) program in 2005. Debate over observation policies has generally centered on potential financial implications for hospitals and Medicare patients. In a summary of the financial implications, written before the introduction of the ‘‘2-midnight rule,’’ Baugh and Schuur assert that observation care promotes cost shifting onto patients, relieving the hospital of the risk of adverse action by RAC audits, rather than promoting incentives for higher value, protocol-driven observation unit care (1). For patients, the observation rule can be enormously confusing—particularly for patients lying in inpatient hospital beds that are technically receiving outpatient treatment. The issue is potentially so confusing that Medicare released an informational brochure entitled, ‘‘Are You a Hospital Inpatient or Outpatient? If you Have Medicare–Ask!’’ (2). In response to the controversy, in 2013 the Centers for Medicare and Medicaid Services (CMS) released the 2-midnight rule. Despite the new rule, there continues to be debate over observation and its associated financial implications. The continued controversy, financial risks for patients, and heightened awareness of the rule has—at least anecdotally—resulted in a growing burden on emergency physicians (EPs). Patients are becoming more aware of the financial impact of their admission status and are asking EPs to provide them with specific information about their status. Given the increasing role EPs are forced to play, our goal is to discuss major ethical
observation;
INTRODUCTION Observation care has been a topic of controversy since the refinement of Medicare’s observation codes in 1996 and the introduction of the Recovery Audit Contractor Reprints are not available from the authors.
RECEIVED: 27 February 2015; FINAL SUBMISSION RECEIVED: 10 November 2015; ACCEPTED: 17 November 2015 527
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considerations EPs will be faced with relating to the controversial rule. In addition, the paper will provide a brief review of key consequences for patients, highlight legal considerations, and provide recommendations for clinicians on how to approach patients who are impacted by the observation rule. Summary of the Observation Rules and Their Financial Impact on Patients The term ‘‘observation status’’ generally refers to hospitalized patients that are technically considered by Medicare as outpatients for billing purposes. Rules pertaining to observation status took their modern form in November 1996, when CMS refined the payment codes for observation as a set of clinically appropriate services that could be delivered in any setting, including a physician’s office, an emergency department (ED), or an inpatient ward, with billing administered as outpatient under Medicare Part B (1). In 2009, CMS further outlined observation as ‘‘a 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 patients will require further treatment as hospital inpatients or if they are able to be discharged’’ (3). Observation stays were initially intended to last <24 hours, with only rare exceptions spanning >48 hours (3). Controversy over observation placement grew because of the increased number of patients placed into observation without a well-defined set of services, with increasing durations of stay and increased out of pocket expenditures for patients (1). This potential increase in patient costs stems from the fact that inpatient hospitalizations are billed differently than observation stays. For inpatients, Medicare Part A covers hospital costs for the first 60 days and Medicare Part B covers 80% of physician services after a one-time deductible (2). Observation patients are responsible for a copayment for each individual outpatient hospital service in addition to 20% of physician services under Part B after the Part B deductible (2). Observation patients also are responsible for pharmacy charges for ‘‘outpatient’’ medications and for all skilled nursing facility charges, because observation time does not qualify toward the 3-day hospitalization requirement for skilled nursing facility benefits (1). Inpatient hospitalizations accounted for 25% of Medicare spending in 2012 and continue to be a main focus of cost control for CMS (1,4). To save costs, CMS developed the RAC program in 2005, which permits contractors to retroactively audit claims and recover money if overbilling occurred from inappropriate inpatient status (5). In 2013, 93% of hospitals experienced RAC activity, with $2.6 billion in denials reported
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(6). In response to the audits, there was a nearly 88% increase in observation hours from 2006 through 2012 and an increase in the amount of time patients spent in observation (4,7). As a response, CMS released the 2-midnight rule in October of 2013, shifting the criteria for placement into observation status to a time-based rule (8). The rule mandates that patients hospitalized for <2 midnights are classified as observation and $2 midnights as inpatients (9). Unfortunately, this new modification fails to address the cost shifting issues reviewed above and has its own unanticipated repercussions. Criticisms of the new rule center around the time and day of arrival predicting the likelihood of staying past 2 midnights, and the potential for higher patient costs if hospitals initially classify patients as observation and then flip to inpatient after a second midnight (10,11). Modifications to the rule are being considered by CMS, though none of these appear imminent (12). DISCUSSION Role of the Emergency Physician The role of the EP in determining patient placement into observation or inpatient status varies between hospitals. Certification regulations state that the admitting physician, surgeon, EP, or the patient’s primary care physician can certify an inpatient admission (13). An inpatient admission order can happen any time before discharge (13). It is probably most appropriate for the admitting physician to determine the admission status, because the 2-midnight rule invokes a time frame that is affected by the pace of testing, which is likely unknown by the EP. However, in many organizations, the EP will make the initial decision to admit a patient to inpatient or observation status. When faced with this role, the EP must assess whether inpatient admission is warranted based on if medical services are expected for >2 midnights (14). CMS recommends that the decision take various factors into consideration, including the patient’s age, disease processes, comorbidities, and impact of discharge (14). CMS advises that the ordering physician should support inpatient placement with complete documentation, including signs/symptoms, comorbidities, medical needs, risk stratification, risk factors for adverse events if discharged, and any other appropriate considerations (14). The admission status specified by an EP is not binding and should be reevaluated by the admitting physician. Status can be changed at any time before discharge by an ordering physician as long as requirements are met and appropriately documented (15). The heightened awareness of the rule and its associated financial risks for patients has anecdotally increased the burden on EPs to explain an admission into
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observation status. The challenges of a busy ED, lack of education surrounding observation rules, legal ambiguities, and lack of acceptance of a seemingly paradoxical rule that places admitted patients into outpatient status are among the difficulties EPs face in managing patient concerns about observation status. Emergency Medical Treatment and Active Labor Act Considerations In the context of EPs facing the task of responding to patient questions regarding admission under observation status, a major distinction from other health care settings is that ED providers must abide by Emergency Medical Treatment and Active Labor Act (EMTALA) requirements, which generally prevent payment issues from influencing the nature or timing of treatment needed (16). Congress enacted EMTALA in 1986 as a federal law requiring that anyone presenting to an ED be stabilized and treated regardless of their insurance status or ability to pay (17). Every patient is covered under EMTALA until a medical provider has conducted an appropriate medical screening examination, stabilized the patient’s emergency medical condition, or admitted the individual (17). Given that hospital observation is considered an outpatient service, the hospital’s EMTALA obligation continues to apply during placement under observation status (18). If a patient has been admitted as inpatient, EMTALA no longer pertains (18). There is no official policy from CMS as to whether physicians can engage in discussions with patients about their financial obligations specifically related to observation while in the ED. However, based on CMS directives and EMTALA clarifications, we believe it is against the intent of EMTALA to proactively provide patients in observation status with information about their financial obligations, particularly should that information in any way discourage a patient from staying in the hospital (18,19). It is not, however, against the intent of EMTALA to respond to patient questions about their admission status or financial obligations as long as all emergency medical conditions have been stabilized according to the EMTALA definition, which may differ from a physician’s general sense of medical stability (16–18). Nevertheless, any inappropriate financial conversations with a patient that has an emergency medical condition may place the hospital at risk of an EMTALA violation (16,19). While it is entirely plausible that information could be provided to patients explaining in general terms the billing differences of observation compared with inpatient admission without potentially influencing a patient’s decision (see Appendix A for a sample informational pamphlet), unless CMS were to revise its directives with respect to EM-
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TALA it seems most prudent for hospitals to not provide information proactively if the EMTALA obligation still applies. If an individual asks specific questions regarding the potential financial implications of inpatient or observation treatment, information may be given in response to their questions as long as it is provided in a way that does not discourage a patient from receiving stabilizing treatment. If the EP provides financial information before a medical screening examination or stabilization of emergency conditions that dissuades the patient from receiving stabilizing treatment, they are at risk of violating EMTALA (18). Finally, hospitals and providers should be encouraged to refer explicitly to EMTALA protections when faced with individuals that inquire about billing or financial details. If a patient requests to sign out against medical advice (AMA) after a conversation, as per usual protocol every attempt should be made to persuade the patient to stay to receive necessary medical services. However, per CMS clarifications, ‘‘if an individual leaves a hospital AMA or LWBS (left without being seen), on his or her own free will (no coercion or suggestion) the hospital is not in violation of EMTALA’’ (20). Appropriate and detailed documentation should be completed for any patient that signs out AMA, taking particular care to represent clearly in the medical record decision-making capacity, an adequate disclosure of risks, and that any financial information provided to the patient in no way served to discourage the patient from receiving additional care under observation status or otherwise (20,21). Every EMTALA violation is complaint-specific and the individual facts (including medical record documentation) would be considered by CMS in the event of a potential infraction. Ethical Considerations Regarding the Observation Rules The ethical principles respect for persons, justice, nonmaleficence, and beneficence derive from ‘‘a set of norms that bind all [morally serious] persons in all places,’’ and form the basis for U.S. federal policy on the treatment of human subjects in research (22). These principles are prima facie obligations, and should be used as a framework, rather than strict rules, with which to evaluate moral problems. As such, each principle must be fulfilled unless an equally important competing obligation outweighs it in pursuit of ‘‘the ‘greatest possible balance’ of right over wrong’’ (22). Ethical issues relating to the observation rule challenge the value of the patient–physician relationship by making it almost impossible to be passively transparent or proactively honest with patients. The basic principles of respect for persons and justice as fairness are the most relevant to this discussion. Respect for persons
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requires that we treat patients as autonomous agents, and to protect those with diminished autonomy, whereas justice as fairness requires that equals be treated equally (23). These principles can be considered on two levels: 1) those that determine a physician’s responsibility to their patients, and 2) those that can be used to evaluate the observation rule itself. The observation rule makes it difficult for EPs to be fully transparent with their patients, infringing on the patient–physician relationship by compromising the principle of respect for persons. It does so by preventing physicians from conveying the information necessary to allow patients to make informed autonomous decisions about the care they receive. Transparency involves providing a patient full access to information about their health care, associated costs, and any additional facts the patient may want to understand, not just limited information that providers feel a patient should know. Physicians are expected to disclose, in a manner that the patient can comprehend, whatever is considered material to the patient’s understanding of their situation, including the costs and burdens of treatment, the nature of the illness and potential treatments, and errors made in the course of care (24). When faced with high treatment costs, patients may have to make difficult choices between accepting the care offered or devoting those resources to other equally important competing interests, such as food and housing. Although physicians are not responsible for choosing amongst patients’ competing interests, respecting the decision-making capacity of their patients does require that they provide them with the information necessary to decide for themselves (25). These ethical tenets, based upon the principle of respect for persons, allow patients to believe that caregivers have their best interest in mind. Patients who present to the ED and require hospitalization are not an exception. Therefore, with respect to admission status, EPs should be as transparent as possible, enabling the patient to participate and make informed decisions about their hospitalization. Another consideration is the level of detail to provide. While truthful, informing patients of every aspect of their care and possible associated costs is not practical for expedited care delivery (26). One proposal for a framework of communication between patient and physician is to include ‘‘what a reasonable person would want to know to make an intelligent and informed treatment decision’’ (27). Unfortunately, the existence of EMTALA explicitly prevents physicians from being transparent with patients about the potential financial obligations associated with an observation admission. Physicians must wait for patients to ask questions about their admission and only then may respond. As such, EMTALA appears to be directly in conflict with the principle of respect for per-
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sons. Moreover, admission status may not be determined at the time a hospitalization decision is made. In addition, given the complicated reimbursement algorithms of our current health care system, definitive projections of patients’ out of pocket costs are next to impossible to determine in the ED. The challenges stem from complexities that span from patients’ secondary insurance, expected duration of stay in the hospital, previous admissions in the preceding 60 days, medications considered by Medicare to fall under outpatient treatment, and whether it is anticipated that the patient will require a skilled nursing facility after hospital discharge. As a result, even if EMTALA restrictions no longer apply, full transparency may not achievable in the ED in all cases. Although EMTALA provisions and the logistics of full disclosure regarding specific patient financial information or admission status may complicate the physician’s task, these challenges do not completely absolve EPs from providing at least what information is known or that may reasonably be accessed. At whatever stage is feasible and allowable, EDs or hospitals should provide resources to impart enough information to allow patients to understand the limitations in provider determinations of admission status, in addition to the variables and the process by which such determinations are made. Because patients’ hospitalization status, in particular, can have dramatic effects on patient cost-sharing which may, in turn, impact other equally important patient interests, patients should be provided with enough information to enable them to make informed autonomous decisions. Insofar as it limits the ability of the EP to provide proactive and detailed information about the admission status and financial obligations, EMTALA grossly limits the physician’s capability to meet optimal transparency. Another major limiting factor for providing patients with clear and consistent information in terms of their admission status is the lack of consistency across hospitals in the classification of inpatient and observation stays. On a broader level, this highlights ethical concerns inherent to the observation rule and its implementation. The inconsistency between hospitals challenges the ethical consideration of justice as fairness. The introduction of the 2-midnight rule has not helped resolve the issue of arbitrary variation in the treatment of patients with similar illnesses and the need for similar treatments. The association of time of day of admission means that patients with similar durations of stay, similar conditions, and similar needs for skilled nursing facility coverage may be given a different hospitalization status, frequently resulting in increased financial burden, based simply on the time of day the order is placed to hospitalize a patient (10). This situation is unfair to those patients with greater out of pocket costs when they are placed into ‘‘observation’’ status as it fails ‘‘to treat similar cases similarly
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and equals equally,’’ a basic ethical principle of justice in our cultural tradition (23,28). Translating Ethical Principles into Practical Solutions Taking into account the sum of legal and ethical considerations discussed above, there are steps organizations could consider to better cope with Medicare’s observation rules. Potential options for information that could be provided to improve transparency include: 1) proactive notification (as opposed to reacting to a patient’s request) of a patient’s preliminary status as inpatient or observation and any updates on changes in their status, but without any reference to the financial obligations that may accompany either status—this strategy would appear to satisfy the ethical responsibilities to the extent permissible under EMTALA and would allow patients the opportunity to then ask additional questions about their admission status; 2) pamphlets/educational materials that may be given to patients in response to their questions to describe why their hospitalization status may be difficult to determine, what factors are involved, and why their status might change; and 3) access to case managers who can help provide information on patient status, financial details (as permitted by EMTALA), and answer questions. To reiterate a key point with respect to EMTALA, CMS directives appear to prevent providers and hospitals from proactively engaging in conversations with patients regarding their admission status and financial obligations before a medical screening examination and the stabilization of emergency medical conditions as opposed to responding directly to patient questions (16–19). Optimally, to improve transparency even if a patient’s status is unknown at the time of admission, an informational pamphlet could be developed by hospitals— or a national professional society like the American College of Emergency Physicians. The informational sheet should include a review of the basics of the decision to place a patient into observation or inpatient status and the general financial considerations of this decision based on Medicare’s standard payment protocols. Appendix A includes a sample pamphlet that could serve as a model for one given to patients in response to their questions, which would ease the burden on EPs by providing patients with standardized information. This pamphlet should not be given proactively if the patient has an unstabilized emergency medical condition and EMTALA applies, because there is the potential that providing this information could serve to discourage patients from staying in the hospital. However, as previously discussed, because the ability to provide this information proactively would better meet the physician’s ethical responsibility to their patient, we would suggest that hospitals review such informational mate-
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rials with their regional CMS office and determine if in fact these materials are suitable to be distributed proactively at the time of admission to inpatient or observation, rather than only in response to patient questions without violating the intent of EMTALA. This strategy might promote a review of federal CMS policy, which is of fundamental importance because the current ‘‘restriction’’ on full discussion of a patient’s potential financial obligations runs counter to a physician’s ethical duty and is simply impractical in the current practice environment where EPs may be making an initial determination on admission status but are not permitted to then review the details of this with patients. Another useful solution would be the presence of 24hour case managers in the ED. Their role can include assistance in determination of observation or inpatient status and responding to patient specific questions. The cost of case managers may be offset by the potential to reduce discretionary admissions to inpatient status that may result in RAC activity. Smaller hospitals could consider sharing a case manager with the inpatient unit. However, we recognize that the expense of 24-hour case managers may be cost prohibitive for many EDs, and therefore alternative suggestions are discussed below. If a case manager is not available, we recommend that the EP answer patient questions to the best of their ability and then refer to the hospital case manager to engage the patient in a more nuanced discussion. Such a discussion would occur after a patient leaves the ED or at the earliest possible time during their hospitalization. It is also fundamentally important that EPs are educated on the observation rules to be able to answer patient questions. The educational pamphlet will be a useful resource to physicians needing ready information. In addition, we suggest providing online or onsite training sessions to educate EPs. The training should include general information on the rules, the potential patient financial impact of observation, and a review of EMTALA as it relates to discussing observation status with patients. In addition, site-specific protocols should be presented, such as the role of case managers, the decision point for admission to observation versus inpatient (i.e., is the patient placed inpatient by the EP or by the admitting physician), the responsibilities of the EP to patients being admitted, and information available for patients. For EDs and hospitals, we recommend creating protocol-driven dedicated observation units that will bring patients high-value observation care (such as those that exist in a typical ED observation unit). Unlike ward observations, dedicated observation units have been shown to be beneficial, with an estimated savings of $3.1 billion from expanding observation units to hospitals without them (29). In addition, some hospitals have received waivers of the 3-day inpatient stay, allowing
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patients to bypass the hospital in observation status and be placed into skilled nursing or rehabilitation facilities directly from the ED (30). CONCLUSION Controversies over the Medicare observation rules remain despite CMS revisions and the new 2-midnight rule. Ethical issues relating to the observation rule challenge the value of the patient–physician relationship by making it almost impossible to be transparent with patients, violating the basic principles of respect for persons and justice as fairness. Our review did not uncover any legal contraindications that would prevent the EP from discussing a patient’s admission status into observation or related financial billing associated with the Medicare observation rules, as long as discussions occur after a medical screening examination and the stabilization of emergency medical conditions, and with financial information delivered only in direct response to patient questions (16–19). We reviewed some interim steps that EPs and hospitals can take to improve transparency and patient fairness. Unfortunately, the suggestions outlined above only represent potential improvements to a flawed system. The optimal solution would be for CMS to abandon the current observation rule and the role of the RAC, which results in inadequate transparency and unfair variation in the rule’s implementation, while simultaneously exposing patients to significant financial risk. In the meantime, we suggest implementing a few practical solutions to fulfill the EP’s ethical duty to inform patients to the best of our ability on the meaning and impact of the observation rules. In addition to improving education for EPs and augmenting hospital resources when possible, we favor using an informational pamphlet to respond to patient questions, such as Appendix A. Accurate information for patients is essential for fulfilling the EP’s ethical obligations and allowing patients to make reasonably informed decisions with unbiased information. REFERENCES 1. Baugh CW, Schuur J. Observation care—high-value care or a costshifting loophole? N Engl J Med 2013;369:302–5. 2. Medicaid website. Are you a hospital inpatient or outpatient? If you have Medicare – ask! Available at: http://www.medicare.gov/pubs/ pdf/11435.pdf. Accessed November 27, 2014. 3. Centers for Medicare and Medicaid Services website. Medicare benefit policy manual, chapter 6-hospital services covered under Part B, 2014. Available at: https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/downloads/bp102c06.pdf. Accessed November 25, 2014. 4. Medicare Payment Advisory Commission website. A data book: health care spending and the Medicare program. Available at: http://www.medpac.gov/documents/publications/jun14databook entirereport.pdf?sfvrsn =1. Accessed November 25, 2014.
5. Morrissey J. Understanding and managing RAC. Available at: http:// www.trusteemag.com/display/TRUnewsarticle.dhtml?%20dcrPath=/ templatedata/HF_Common/NewsArticle/data/TRU/Magazine/2013/ Mar/1303TRU_coverstory&domain=TRUSTEEMAG. Accessed November 26, 2014. 6. American Hospital Association website. Exploring the impact of the RAC program on hospitals nationwide. Available at: http://www. aha.org/content/14/13q4ractracresults.pdf. Accessed November 28, 2014. 7. Feng Z, Wright B, Mor V. Sharp rise in Medicare enrollees being held in hospitals for observation raises concerns about causes and consequences. Health Aff (Millwood) 2012;31:1251–9. 8. Office of Inspector General website. Admitted or not? The impact of medicare observation status on seniors. Available at: http://oig.hhs. gov/testimony/docs/2014/Statement_Aging_Committee_07302014. pdf. Accessed November 25, 2014. 9. Centers for Medicare and Medicaid Services website. Inpatient prospective payment system 1599-F and fiscal year 2014 final rule. Available at: http://www.gpo.gov/fdsys/pkg/FR-2013-08-19/pdf/ 2013-18956.pdf. Accessed November 27, 2014. 10. Sheehy AM, Graf B, Gangireddy S, Hoffman R, Ehlenbach M, Heidke C. Hospitalized but not admitted: characteristics of patients with ‘‘observation status’’ at an academic medical center. JAMA Intern Med 2013;173:1991–8. 11. Carlson J. Auditing inpatient stays. Mod Healthc 2013;43:9–10. 12. Bhupathy V, Landauer R. CMS proposed to modify- but continues to stand behind – its ‘‘two-midnight’’ rule. Healthcare Law Blog. Available at: http://www.sheppardhealthlaw.com/ 2015/07/articles/centers-for-medicare-and-medicaid-services-cms/ cms-proposes-to-modify-but-continues-to-stand-behind-its-twomidnight-rule/?utm_source=Mondaq&utm_medium=syndication &utm_campaign=View-Original. Accessed July 28, 2015. 13. Centers for Medicare and Medicaid Services website. Hospital inpatient admission order and certification. Available at: http:// www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Acute InpatientPPS/Downloads/IP-Certification-and-Order-01-30-14.pdf. Accessed November 25, 2014. 14. Centers for Medicare and Medicaid Services website. Frequently asked questions 9240: what factors should the physician take into consideration when making the admission decision and document in the medical record? Available at: https://questions.coms.gov/ faq.php?id=5005&faqID=9240. Accessed November 2, 2014. 15. Centers for Medicare and Medicaid Services website. Recovery auditors findings resulting from medical necessity reviews of renal and urinary tract disorders. Available at http://www.cms.gov/ Outreach-and-Education/Medicare-Learning-NetworkMLN/MLN MattersArticles/downloads/SE1210.pdf. Accessed July 1, 2015. 16. Center for Clinical Standards and Quality/Survey and Certification Group website. Emergency Medical Treatment and Labor Act (EMTALA) requirements & conflicting payor requirements or collection practices. Ref: S&C: 14-06-Hospitals/CAHs. Available at: http:// www.cms.gov/Medicare/Provider-Enrollment-and-Certification/ SurveyCertificationGenInfo/Downloads/Survey-and-Cert-Letter-1406.pdf. Accessed November 24, 2014. 17. Emergency Medical Treatment and Active Labor Act. 42 U.S.C. x 1395dd. 1986. 18. Center for Clinical Standards and Quality/Survey and Certification Group website. Inpatient Prospective Payment System (IPPS) 2009 final rule revisions to Emergency Medical Treatment and Labor Act (EMTALA) regulations. Available at: https://www.cms.gov/Medicare/ Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/ downloads/SCLetter09-26.pdf. Accessed November 25, 2014. 19. Centers for Medicare and Medicaid Services website. Clarifying policies related to the responsibilities of medicare-participating hospitals in treating individuals with emergency medical conditions. Available at: http://www.cms.gov/Regulations-and-Guidance/ Legislation/EMTALA/downloads/CMS-1063-F.pdf. Accessed July 1, 2015. 20. Centers for Medicare and Medicaid Services website. Interpretive guidelines – responsibilities of Medicare participating hospitals in emergency cases. Available at: http://cms.hhs.gov/Regulations-
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21. 22. 23.
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and-Guidance/Guidance/Manuals/downloads/som107ap_v_emerg. pdf. Accessed July 1, 2015. Levy F, Mareiniss DP, Corianne L. The importance of proper against-medical-advice (AMA) discharge. J Emerg Med 2012;43: 516–20. Beauchamp T, Childress J. Principles of biomedical ethics. 6th edn. Oxford, United Kingdom: Oxford University Press; 2009. National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research, Department of Health, Education and Welfare. The Belmont Report (DHEW pub. no. (OS) 78-0012). Washington, DC: United States Government Printing Office; 1978. American College of Physicians website. Healthcare transparency – focus on price and clinical performance information. Avaialable at: https://www.acponline.org/advocacy/current_policy_papers/assets/ transparency.pdf. Accessed July 1, 2015. Hall A. Financial $ide effects: why patients should be informed of costs. Hastings Cent Rep 2014;44:41–7.
533 26. Jesus J, Grossman SA, Derse AR, Adams JG, Wolfe R, Rosen P. Ethical problems in emergency medicine: a discussion-based review. 1st edn. Philadelphia, PA: John Wiley & Sons, Ltd; 2012. 27. Brock DW. Informed consent. In: VanDeVeer D, Regan T, eds. Health care ethics: an introduction. Philadelphia, PA: Temple University Press; 1987:98–116. 28. Childress J. Triage in response to bioterrorist attack. In: Moreno J, ed. In the wake of terror: medicine and morality in a time of crisis. Cambridge, MA: MIT Press; 2003:72–93. 29. Baugh CW, Venkatesh AK, Hilton JA, Samuel PA, Schuur JD, Bohan JS. Making greater use of dedicated hospital observation units for many short-stay patients could save $3.1 billion a year. Health Aff (Millwood) 2012;31:2314–23. 30. Evans M. Reform update: Medicare offers waiver of 3-day rule for some ACOs, bundled payments. Available at: http://www. modernhealthcare.com/article/20140806/NEWS/308069965. Accessed July 24, 2015.
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APPENDIX A
SAMPLE OBSERVATION CARE PAMPHLET FOR MEDICARE PATIENTS Your doctor has decided that you have a medical condition that needs additional treatment in the hospital. If you are a Medicare patient, at this point you may be placed into the hospital in either ‘‘observation’’ or ‘‘inpatient’’ status. The purpose of this pamphlet is to explain the difference between observation and inpatient status for our patients. Please note that this information is intended for informational purposes only and is in no way intended to discourage you from staying in the hospital. What is the difference between inpatient and outpatient status? You’re an inpatient when you’re formally admitted to a hospital with a specific doctor’s order (E1). You’re an outpatient if you’re receiving emergency department services, observation services, outpatient surgery, or any other hospital service without a doctor’s order to admit you as an inpatient (E1). This is true even if you spend the night in the hospital (or up to 2 midnights). Who is placed into observation status? Per the Centers for Medicare and Medicaid Services (CMS) guidelines, patients are placed in observation status if they are expected to be hospitalized for < 2 midnights (with a few exceptions) (E2). The decision for inpatient or observation admission is a complex process based on multiple factors, including your need for medically necessary hospital care, timing of anticipated procedures, your predicted response to treatment, etc. What are the differences in billing for observation versus inpatient? For inpatients, Medicare Part A covers hospital costs for the first 60 days and Medicare Part B covers 80% of physician services after a onetime deductible (E1). Under observation, Medicare Part B covers 80% of each individual outpatient hospital service and 80% of physician services after the Part B deductible. Patients are responsible for outpatient medication pharmacy charges and for skilled nursing facility charges if this follows your hospital stay (observation time doesn’t qualify toward the 3-day hospitalization requirement for skilled nursing facility benefits) (E1).
Specific financial information related to your visit may not be allowed to be discussed in the emergency department because of EMTALA regulations (E3). Who makes the decision on whether you are in observation or inpatient status? You may be placed into observation or inpatient by your emergency room physician or your admitting physician. However, this may change at any time before discharge based on your course in the hospital (E4). Why would your admission status change? Your placement into observation may change to inpatient if your stay is anticipated to last >2 midnights. Or you may be changed from inpatient to observation if your stay is anticipated to be < 2 midnights. At the time of your initial placement into observation, there are factors about your hospital stay that may not yet be known. This makes it difficult to anticipate your total length of time in the hospital as well as the final billing costs associated with your stay. Who to ask if you have additional questions Ask to speak with your case manager if you have additional questions. The case manager may not be available immediately, may not have specific details about your anticipated stay, and may not be able to discuss billing details given EMTALA restrictions, but will do their best to answer your questions. Please refer to Medicare’s publication ‘‘Are you a hospital inpatient or outpatient? If you have Medicare–ask! May 2014. ’’ That publication has been provided along with this pamphlet for additional information (E1). REFERENCES E1. Medicaid website. Are you a hospital inpatient or outpatient? If you have Medicare – ask! Available at: http://www.medicare.gov/pubs/ pdf/11435.pdf. Accessed November 27, 2014. E2. Centers for Medicare and Medicaid Services website. Inpatient prospective payment system 1599-F and Fiscal year 2014 final rule. Available at: http://www.gpo.gov/fdsys/pkg/FR-2013-0819/pdf/2013-18956.pdf. Accessed November 27, 2014. E3. Center for Clinical Standards and Quality/Survey and Certification Group website. Inpatient Prospective Payment System (IPPS) 2009 final rule revisions to Emergency Medical Treatment and Labor Act (EMTALA) regulations. Available at: https://www.cms.gov/ Medicare/Provider-Enrollment-and-Certification/ SurveyCertificationGenInfo/downloads/SCLetter09-26.pdf. Accessed November 25, 2014. E4. Centers for Medicare and Medicaid Services website. Hospital inpatient admission order and certification. Available at: http://www.cms. gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatient PPS/Downloads/IP-Certification-and-Order-01-30-14.pdf. Accessed November 25, 2014.