The prevalence and length of observation stays, defined by the US Department of Health and Human Services as short-term treatments provided to outpatients to determine whether beneficiaries require treatment as inpatients or can be discharged, has increased, with a concurrent reduction in hospitalizations.1 However, the magnitude of these shifts has not been quantified. As the Centers for Medicare & Medicaid Services (CMS) implements payment reductions to hospitals for high rates of rehospitalizations and funds quality improvement initiatives focused on better care coordination and reducing unplanned returns to the hospital, it is important to understand the composite effect on hospitalizations (defined as any admission to the inpatient service of a hospital) and observation stays at the population level.
Observation stays were identified by any claim submitted for a Medicare patient treated in observation status. Composite percent change: 5.7% (panel A) and 11.1% (panel B). Data from Medicare Part A claims.
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