New Medicare Rule: Hospital Admission vs. “Observation”
The limit is supposed to be 24-48 hours to make sure people are really sick enough to be there. Except that sometimes patients can be in as long as 5 days on “observation” status.
The big difference is instead of a patient meeting the three day hospitalization rule and then Medicare picking up the bill for the next round of skilled nursing care in a facility — those payments are now disallowed and the patient or their family ends up with the bill.
For more information please read this article entitled: “Hospitals Caught Between a Rock and A Hard Place over Observation”