A "60 Minutes" program Sunday about physicians admitting practices at hospitals owned by Health Management Associates prompted the Florida Hospital Association to point out a problem of an opposite nature.
The television program raised allegations of emergency-room physicians at HMA hospitals admitting patients regardless of medical need, but the hospital association says there is a bigger issue of physicians being pressured not to admit patients.
"Through a flawed policy designed to deny payments, the federal government strongly discourages physicians from admitting Medicare beneficiaries despite the physician's best judgment," Bruce Rueben, president of the FHA, said in a statement.
The FHA represents 185 hospitals, the bulk of the state's hospitals, in policy and legislative matters.
Rueben is referring to a policy where physicians keep patients on "observation status" as opposed to admitting them, which means reduced reimbursement to hospitals. The practice also is harmful to patients because they are denied hospital coverage under Medicare Part A and pay more out of pocket.
The FHA's national affiliate, the American Hospital Association, filed a lawsuit Nov. 1 against the U.S. Department of Health and Human Services, HHS, for refusing to pay hospitals for reasonable and necessary care. Four hospitals in Michigan, Missouri and Pennsylvania joined the lawsuit.
When asked by the Daily News why the FHA made a statement Monday about the observation issue after the "60 Minutes" program, Reuben said it's because there's much more pressure on physicians to not admit patients than to admit them.
"The '60 Minutes' program caused us to be concerned this larger issue is being missed," he said. "The larger issue of observation status affects patients in every hospital in every state of the country and it has gone largely unnoticed."
Rueben said he did not know the particulars of what's going on with Naples-based HMA and said the hospital group is not a member of the FHA.
The AHA says recovery audit contractors review hospital records of patients and determine some patients should not have been admitted. As a result of the audits, the federal government seeks repayment from the hospitals for the patients' treatment. The auditors are under contract with the federal government and are paid, in part, on how much money they recoup for Medicare.
Hospitals prevail 75 percent of the time when they appeal the auditors' decisions about observation status, often after an appeals process that spans two years and is costly to hospitals, the AHA says.
The consumers' group, the Center for Medicare Advocacy, based in Connecticut, was the first to file a lawsuit in November 2011 against the federal government over observation status because it deprives patients of their Medicare Part A rights. The group filed a class-action lawsuit.
Judith Stein, president and founder of the consumers' group, said Monday there's been no substantive decisions in her group's case and the problem of patients being kept on observation status continues to escalate.
Stein said there's no question that physicians feel pressured by hospitals not to admit patients and keep them on observation status.
The federal government initially established observation status for patients whose medical conditions warranted watching for 12 hours or so, according to the consumer group. In recent years, hospitals have expanded the time frame so some observation stays could last days.
Being classified as observation, or outpatient status, also precludes patients from the minimum three-day inpatient stay to qualify for follow up care in a nursing home.
More recently, hospitals face penalties for high readmission rates from the federal government and so use of observation status helps to avert the penalties, according to Kaiser Health News.
Stein said the U.S. Centers for Medicare & Medicaid had a conference call to address the issue of observation status not long ago and 2,000 people, including physicians, were on the call.
"People have all heard of observation status when three or five years ago nobody would have (known)," she said. "It's definitely a big problem."