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OIG Finds Inpatient Stays Were More Expensive Than Observation Stays

Despite concerns from the Centers for Medicare & Medicaid Services (CMS), the Office of Inspector General (OIG) found that short inpatient stays were more expensive than outpatient observation stays in a July 29 report. CMS has expressed concern that the Medicare program and Medicare beneficiaries may pay more as outpatients than if they were admitted as inpatients. But the report noted that though Medicare beneficiaries had 1.1 million short inpatient stays and 1.5 million observation stays in 2012, inpatient stays cost Medicare $5.9 billion and beneficiaries $831 million, while observation stays cost Medicare $2.6 billion and beneficiaries $605 million.


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