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Observation Status Costly for Hospitals
Health Leaders Media

Hospitals are likely losing money and incurring ill will from patients when they assign them to observation status under Medicare rules, especially if the patient has a general medicine diagnosis, and is female, an 18-month study of the practice at a Wisconsin academic medical center has found.

“Though the cost of hospital observation care costs less, reimbursement per encounter is proportionally a lot less,” says Ann Sheehy, MD, principal investigator of the study published Monday in JAMA Internal Medicine.