The article states a tool designed by McKesson is the software of choice that many hospitals use to guide the decision making process. As a patient if you are kept for observation, given a bed, meal, etc. that does not mean you have been “officially admitted as an inpatient”.
The software is known as InterQual and recent filings with the SEC called it a “trade secret” – and what do we call this? The algorithms that are trade secrets.
There are other companies that make software that does the same thing and they 
patent their algorithms too so we don’t know exactly how this works. Again depending on the descriptions here, patients are not always told if they have been officially ‘admitted as an inpatient”. Medicare requires patients to be notified but again if they have bed and meal, they think they have been admitted.
“Department of Algorithms – Do We Need One of These to Regulate Upcoming Laws?
Medicare requires a 3 day inpatient stay, so when patients are not formally admitted, they don’t pay. In this example here, the patient ended up in a nursing home and a big bill, because they went from being under observation without an official inpatient status, and then they get a huge bill that is not covered. If the patient is there for observation, they get outpatient benefits.
Now from the hospital billing side, this gets confusing too with a biller making errors with billing inpatients when in fact the patient was there for observation. Later on audits come in and guess what, fraud it detected.
Doctors are complaining that this locks up the system and when patients need to be kept for observation it creates problems and again there’s the bill the patient receives too. This is one more area you might inquire about as a patient too, ask if you are there for observation or if you have been admitted so you can figure out what you might be exposed to for additional billing. BD
After Ann Callan, 85, fell and broke four ribs, she spent six days at Holy Cross Hospital in Silver Spring. Doctors and nurses examined her daily and gave her medications and oxygen to help her breathe. But when she was discharged in early January, her family got a surprise: Medicare would not pay for her follow-up nursing home care, because she did not have the prerequisite three days of inpatient care.
"Where was she?" asks her husband, Paul Callan, 85, a retired U.S. Army colonel. "I was with her all the time. I knew she was a patient there."
But Holy Cross had admitted her only for observation. Observation services include short-term treatment and tests to help doctors decide if the patient should be admitted for inpatient treatment. Medicare's guidance says it should take no more than 24 to 48 hours to make this determination.
And unless patients spend at least three consecutive days as an inpatient, Medicare will not cover follow-up nursing home expenses after discharge.
"Under a set of rather arbitrary definitions, which are very vague and difficult to understand and apply, we have to decide who's an inpatient and who's an outpatient when sometimes the distinction can be two or three points in their sodium level or the amount of IV fluids they are receiving," he told CMS officials at an information-gathering session Aug. 24.
If the distinction isn't always clear to doctors, it's even more elusive for patients.
Growing Number Of Patients Find A Hospital Stay Does Not Mean They’re Admitted - Kaiser Health News
Each org. would have their set regulations and to get them all to focus on a standard guidelines would be difficult. Laws would be revised with time and again. However, its best for now that specialists get comfortable to use EMR's that suit their organization needs with ease and feasibility.
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