Analysis: MA plans classify 3 to 4 times as many hospital stays as observation visits compared with traditional Medicare

A report released OCt. 23 by Kodiak Solutions found that Medicare Advantage plans classified three to four times as many hospital stays as observation visits from July 2023 through June 2024 when compared with traditional Medicare. MA plans began classifying fewer stays as observation visits in January when a new federal regulation required MA plans to offer their members the same services received by traditional Medicare beneficiaries but still continue to classify hospital stays as observation at a much higher rate than fee-for-service Medicare. Observation rates for MA plans ranged between 18.1% to 20.2% of claims in the final six months of 2023, then fluctuated within a range of 14.4% and 16.1% in the first six months of this year. Meanwhile, observation rates in traditional Medicare trended down within the 12-month period at a much lower range of 5.2% to 3.7%.