The Disposition Dilemma

Cover Story//Geriatric Emergency Medicine
Options narrowing when “admitting for placement” 

Cover Story//Geriatric Emergency Medicine
Options narrowing when “admitting for placement”  
Emergency physicians frequently must decide how to disposition elderly patients who are unsafe at home but who do not medically require hospitalization. Patients such as these sometimes need nursing or rehabilitation expertise offered by skilled nursing facilities (SNF), but many would be fine with basic help as provided in long-term care facilities (LTC). In cases where patients have private insurance and someone in the ED is available to coordinate the process, it is sometimes possible to facilitate SNF placement or basic LTC services from the ED. However, with less than 10% of the 50+ population having private LTC insurance [1], and with barriers to arranging long-term care from the ED in a short period of time and frequently during off hours, elderly patients are sometimes admitted to the hospital with the default plan of SNF placement. By admitting patients when they are not sick enough to require hospitalization, physicians may be unknowingly participating in Medicare fraud. While fraudulent behavior in the practice of medicine is to be avoided whenever possible, the current system leaves physicians who are working to meet the acute needs of their elderly patients with few alternatives.

Forced to arrange for the needs of their elderly patients, physicians often over-utilize SNF placement for patients who need assistance but who do not require high-level services provided by SNFs. One such example was a 2003-2004 study of Wisconsin hospitals revealing that half of all three-day hospital stays preceding SNF admission were found to be medically unnecessary. In order to contain costs and avoid overutilization of SNFs, Congress enacted requirements to ensure limited access to SNF to those with medical need. These requirements include: a physician’s order for a “skilled” level of nursing or rehabilitation care that can not be provided at home or as an outpatient, a requirement that daily inpatient care is medically necessary, a 3-day qualifying hospital stay in the 30 days prior to entering the SNF, and evidence that the SNF services were started and are for a medical condition related to that 3-day admission [2]. Forced to be gatekeepers for the medical system, ED physicians frequently admit elderly patients to initiate the 3-day hospitalization with the goal of facilitating long-term placement. While CMS assumes physicians use their best discretion to determine medical need when deciding which patients to hospitalize, there is a Medicare claims review mechanism to check for cases of fraud.


In order to get the LTC that physicians believe their patients need, their decision to admit for a 3-day stay may be teetering in a gray area of “medical necessity” as defined by law. In 2003 the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) directed the Centers for Medicare and Medicaid Services (CMS) to create a three-year Recovery Audit Contractor (RAC) demonstration program to detect and correct improper payments in Medicare in three states. One of the “target areas” for the RACs was three-day stays to qualify for SNF care. At the conclusion of the demonstration project in 2008, 85% of the total overpayments collected by the RACs were from inpatient hospitals, with 62% of those provider errors being termed as “medically unnecessary service or setting,”[3]. The Tax Relief and Health Care Act of 2006 made the RAC program permanent and authorized CMS to expand the program to all 50 states by 2010 [4]. Currently RACs and Quality Improvement Organizations use auditing criteria like the Interqual™ Level of Care Determination Tools to review the necessity of admissions and to recover the payment for medically unnecessary admissions even if the hospital already billed and collected for services rendered.

With the expansion of the RAC program likely to result in more cases where hospitals are not reimbursed for admissions deemed medically unnecessary, EPs will probably undergo more scrutiny regarding their role in the process. While the focus currently is on payment corrections, there is political will to prosecute physicians who are responsible for these medically unnecessary admissions. Though emergency physicians are not the admitting physicians, there are many hospitals where the emergency physician is responsible for making the decision to admit and has the responsibility to seek other types of care (e.g. referral to a social worker) making them an inseparable link in the process. As the American College of Emergency Physicians stated, “Increasingly the ED physician is being asked to be aware of these [RAC audit] screening criteria and the potential for hospital short stay denials [5]. While the current consequence of RAC audits are on recovering payment for hospital stays they deem medically unnecessary, there is growing political movement by policymakers to prosecute physicians who are responsible for these medically unnecessary admissions. And although emergency physicians may not be the direct target in these investigations, it is reasonable to assume that they will be involved as a part of the decision-making process and team.”

In formulating the language for health care reform, policy makers including President Obama have pointed to cracking down on fraud and abuse in order to help cut out the waste and high costs in Medicare. It is certainly admirable to promote efficiency and transparency in a system where so much of our public dollars are spent. However, the danger could be an issue of distinction: choosing to either fix the system or to preemptively control and micromanage every medical decision through government oversight. Already, one state has decided to use the latter approach.


In 2007, Minnesota enacted a requirement that an Inpatient Hospital Authorization (IHA) must be obtained by a state medical review agent before admitting a patient to inpatient services. The medical review agent uses the “Appropriateness Evaluation Protocol” (AEP) from the National Institutes of Health as their guide to determining medical necessity. This was seen as a preemptive approach to ensure that patients who are admitted truly have a medical necessity and are not just being admitted to qualify for SNF care for example. But is this the future of health care reform?  ED physicians need to be proactive and work to remain compliant with Medicare policy as well as put pressure on policy makers to eliminate barriers to necessary care like the 3-day stay requirement for SNF care.

Despite the possible grim outlook in the face of the nationwide RAC expansion, ED physicians must be proactive in advocating on behalf of their patients. It is important to comply with federal regulations, yet ED physicians should not be forced to act as gatekeepers for a medical system that is inadequately caring for its constituents. We must become an active part of health care reform efforts that will better address the needs of our geriatric population. Finding a way to avoid the ED altogether and bypassing or streamlining the inpatient stay requirement will serve to reduce over-utilization. Expanding the CMS Program of All Inclusive Care for the Elderly (PACE) [6] could serve to provide the integrated and transitional care coordination that often helps the elderly remain independent and receive higher quality of care, as opposed to the episodic acute care under the current system.

Policy efforts should focus on preemptive planning for assisting elderly patients in the outpatient setting as well as providing alternative options to SNF placement in the acute setting. Changing current practice will decrease costs, provide better care for elderly patients requiring long-term placement, and prevent physicians from practicing fraudulent medicine. In this time of healthcare reform with attention on combating fraud and abuse, we must ensure that change serves to benefit the elderly rather than trimming dollars at their expense.       

1. Uninsured, K.C.o.M.a.t., Private Long-Term Care Insurance: A Viable Option for Low and Middle-Income Seniors? Citing AHIP LTC Insurance Market Survey, 2002, 2006.
2. §1861(i), Social Security Act.
3. The Medicare Recovery Audit Contractor Program: And Evaluation of the 3-Year Demonstration. 2008.
4. 6111, Tax Relief and Health Care Act 2006.
5.  ACEP. Utilization Review FAQs.
Http:// Accessed April 30, 2009.
6. CMS, Program of All Inclusive Care for the Elderly (PACE). 2009.

Continue to next page for 9 Strategies for remaining compliant with federal guidelines 
{mospagebreak title=9 Strategies}
Cover Story//Geriatric Emergency Medicine


9 Strategies for remaining
compliant with federal guidelines
(so you can stay out of jail)

1. Make decisions to admit on patients’ medical condition

2. Carefully document the full clinical presentation ( including social conditions and co-morbidities

3. Document why it is not safe to discharge the patient home and the risks associated with discharge

4. Invite a representative from utilization management to speak with the ED group about medical necessity admission criteria to enhance appropriate documentation

5. When appropriate use observation admissions rather than inpatient admissions

6. Hire utilization review specialists assigned to the ED to review medical records before patient discharges/transfers to ensure compliance with CMS admission criteria (eg using InterQual or other clinical decision support tools will assist during audits)

7. Audit bills before they are submitted

8. Extend hours of case managers and social workers and open communication with elder care coordinating organizations to assist with LTC placement from the ED

9. Routinely review admissions that result in less than 24 hour stays and admissions denied reimbursement by Medicare.

By Kelli O’Laughlin, MD, MPH & Andrew Shin, JD, MS, MPH



  1. Chris Carpenter on

    Dr. O’Laughlin & Dr. Shin:

    Thank you for your thoughtful analysis of an evolving problem. I’ve not read of these developments elsewhere so you are truly ahead of the curve.

    Do you have any idea where the 3-day admission pre-SNF originated?

    Has the Minnesota legislation been tested in court yet?

    How do the Minnesota lawmakers propose EM physicians manage the older adult who is too well for admission but unsafe for home discharge if not admission for SNF placement?

    Are there any other states contemplating similar legislation?

    Again, thank you for this thought-provoking contribution to EP Monthly.

    Chris Carpenter, MD, MSc
    EP Monthly, Chief Clinical Editor

  2. Ruby McBride on

    How do you circumvent the ruling of Medicare that geriatric patients must be admitted to the hospital for 72-hours prior to being placed in the nursing home? This is a rule that should be ammended by the federal or state government. Why ensure that additional cost to the hospital when the patient can be sent straight to a nursing home of their choice?

  3. Andrew Shin on

    Dr. Carpenter:

    Thank you for your thoughts.

    The 3-day pre-admission SNF requirement originated from the original Social Security Act that created Medicare in 1965. Congress needed to ensure some safeguards to keep costs under control and thus intended that only those patients who “truly” needed SNF care would actually get it. The 3 days were determined to be a good proxy for medical necessity. Unfortunately, as we discussed in the article, the 3 day stay may not be the best proxy for SNF care and more importantly, SNF care may not be the best option for many of the geriatric patients who come through the doors of the ED.

    I think your points regarding the way Minnesota has managed the in-between population of not too sick for SNF but not ready to be sent home is very pertinent to our current national health care reform efforts. There has been much talk about the issues of geographic variations in spending and quality and it is no suprise that Minnesota consistently ranks as one of the lowest spending regions and the highest quality region. Part of it, is that those who aren’t quite sick enough to need expensive SNF or other expensive care will not be sent there. I’m not sure what programs exist beyond the normal social work or PACE programs found in other areas, but I would be very interested to hear what those working in the Minnesota area have to say in that regard that account for such high quality.

    If the State has supplemented the savings from fewer SNF admissions with more social supports or programs that help geriatric patients in the home setting then perhaps it makes sense. On the other hand, if the State has only looked at preventing “medically uncessary” admissions without doing something to help those patients in another way, clearly the quality of care is at issue.

    So far to my knowledge, no other states have instituted similar processes, but I would not be suprised to see similar undertakings in the near future. Federal and State budgets are tighter than ever and there is a large public outcry to constrain public spending. How states and the federal government respond will set the tone for patient care and the role of the ED physician for years to come.


  4. Andrew Shin on


    Your point is one that we all have experienced time and time again. The unfortunate truth is that circumventing the 3-day pre-admission requirement is a matter of impossibility under the law. As I mentioned above, the 3-day stay was instituted as a proxy of medical necessity. There have been many calls to CMS to reconsider the 3-day rule; however, I do not foresee a reversal. While the money spent in the inpatient setting is sizeable, the money spent in a SNF (which can go up to 100 days) is exponentially larger. Currently, law-makers see the 3-day requirement as a cost they are willing to bear if it prevents unecessary SNF admissions.


  5. Luna Ragsdale on

    In pediatrics, if we deem the patient’s parents are unreliable for follow-up or the home environment is not safe, the patient may be admitted. Why is there less of a kick-back with these admissions?

    To say this is medically unnecessary as with “placement” issues in geriatric patients misses the whole concept of health care. The patient’s medical health includes the social context. I’d like to see us redefine “medically necessary”. Until we can come up with a system where we can implement in home services that are affordable and immediate, most families have no where to turn. I took care of a patient yesterday who could obviously not safely go home. He stayed in the ED for 21 hours while we tried to establish home health services; in the end, he was admitted to an observation bed until in home services could be established. I don’t think lying in an ED bed for 1 day is the answer either.

    There is obviously a great need to think outside the box and create a better system that will accommodate this problem. Thank you for highlighting the problem.

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