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Observation Stays Can Exceed Cost of Inpatient Deductible

For 26.6% of Medicare beneficiaries, cumulative financial liability up with observational stays

TUESDAY, Sept. 1, 2015 (HealthDay News) -- More than one-quarter of Medicare beneficiaries with multiple observation stays have a cumulative financial liability that exceeds that of the inpatient deductible, according to a study published online Aug. 20 in the Journal of Hospital Medicine.

Shreya Kangovi, M.D., from the University of Pennsylvania Perelman School of Medicine in Philadelphia, and colleagues examined the costs associated with revisiting observation care versus readmission for Medicare beneficiaries. The total cumulative financial liability for Medicare beneficiaries who revisit observation care multiple times within a 60-day period was determined using a 20 percent sample of the Medicare Outpatient Standard Analytic File.

The researchers found that beneficiaries with multiple observation stays in a 60-day period had a cumulative financial liability of $947.40 on average, which was significantly lower than the $1,100 inpatient deductible (P < 0.01). Of those beneficiaries, 26.6 percent had a cumulative financial liability that surpassed the inpatient deductible.

"More than a quarter of Medicare beneficiaries with multiple observation stays in a 60-day time period have a higher financial liability than they would have had under Part A benefits," the authors write.

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