OIG crackdown on hospital billing: Good or bad for patients?

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One of the stats that remains in my mind after nearly 20 years as a healthcare journalist came from a 1940s-era guide from the old Orthopaedic Hospital in Los Angeles. The average length of stay at the hospital back then was an astonishing 63 days.

By the time I had stumbled across that stat in the mid-1990s, the average length of stay at the hospital had been slashed to less than six days.

Winnowing down hospital lengths of stay has been a remarkable achievement, a combination of advances in surgical technology and general hospital management. As recently as the 1980s, I had relatives with gallstones who were hospitalized nearly a week. Now those patients undergo outpatient procedures and are sent home after a couple of hours.

Unfortunately, the huge gains in cutting down lengths of stay may now be unwittingly undermined by the federal government via the various federal agencies that monitor hospital operations.

During the reporting I did for a recently published eBook on surviving audits, the number one fear of the many hospital executives I interviewed were short hospital stays. Anything two days or under was cause for alarm--the type of case that could trigger a closer look from a recovery auditor, or RAC.

As a result, many hospitals are keeping their patients in observation care, sometimes for days on end, out of fear that admitting them will bring on an audit. But if that patient requires care in a nursing facility, Medicare won't pay for it. It's the type of decision that causes hospitalists and other physicians to tear their hair out.

The grumbling about short-stay admissions has not deterred the Office of the Inspector General. In its recently released 2013 workplan, the OIG said it would take a closer look at inpatient admissions that lead to placement in a hospice program, and transfers from one hospital to another, particularly those who are sent to a "swing" bed, which means the patient could be prepared for transfer to a nursing home. It also will examine payments to hospitals when inpatients are admitted for surgery and the procedure is postponed.

Hospice care is one of the fastest-growing segments of care in the United States, and will greatly cut down on the vast expenditures earmarked toward patients in their last year of life. Most decisions to place patients in hospice care comes after one last stab of inpatient care. Surgeries often are postponed due to safety reasons, such as unstable vital signs. And patient transfers occur all the time, the result of a facility concluding it can't properly treat the patient there.

Putting hospitals through the wringer for these issues seems not only a waste of time, but also could potentially endanger patients--whose transfers may be delayed--and drive up costs.

The OIG was last adrift about a decade ago, when Janet Rehnquist was handed the agency because her father was the Chief Justice of the United States and his daughter needed some sort of job. Her two years in the position were distinguished by her yeoman efforts in procuring a gun, and turning her head away from hospital overcharges in Florida because Jeb Bush thought it would be an inconvenient fact to surface while he was running for reelection as governor.

To its credit, the OIG is looking at the window of care prior to hospitalization to see if it could be better managed. If this ultimately keeps patients out of the hospital, it will be a terrific development and a big money-saver, although it probably won't be the cheeriest of news for hospitals.

However, the other scrutiny is too heavy-handed, and puts the OIG at risk of missing the forest for the trees. It may ultimately pressure hospitals to delay admitting patients near death, putting them at greater risk of not receiving the acute care they need. And after decades of miraculously shaving weeks off the average length of stay, it could again creep upward. - Ron (@FierceHealth)