Traditional Medicare requires a three day inpatient
stay before it will cover the first 20 days of rehabilitation care in an
approved nursing facility. If the hospital classifies you as “observation”
status instead of inpatient status, you do not qualify for Medicare services
after you are discharged from the hospital and will be responsible for the full
bill for rehabilitation services. Traditional Medicare will not cover you. The
cost for nursing home care can exceed $400 a day.
You might be wondering, How can this happen? Observation status looks and feels like
full hospital admission, but technically you are an outpatient. You might have
been assigned to a room on a floor, stayed several days, having doctor and
nurse care with several test. You will receive the same care in the hospital if
you were classified as “inpatient”, however you will not quality to receive any
additional care under traditional Medicare because you were “observation”
status or otherwise, never admitted.
Medicare Advantage Plans do not necessarily have the
same rule. Excellus, Blue-Cross, BlueShield
reported that hospital status will not affect eligibility for
rehabilitation as long as the services are deemed necessary. MVP Healthcare on
the other hand, requires a three day qualifying stay in order to be eligible. United
Healthcare does not require a 3-day prior hospital stay to qualify for skilled
nursing care. However it is important to note that, unless the provider writes an order to admit you as an inpatient to the
hospital, you are an outpatient and pay the cost sharing amounts for outpatient
surgery. Even if you stay in the hospital overnight, you might still be
considered an outpatient. People with private commercial insurance plans are also
subject to the terms and conditions of their contract.
A study in the June 2012 issue of the journal Health Affairs reported the ratio of
observation stays to inpatient admissions from 2007-2009 among fee-for-service
Medicare patients increased 34 percent. Local data reflect national trends.
Increased “observation” stays might be a result of payment
policies. Medicare routinely performs audits on hospital billing practices and
flags patients where it is determined that an outpatient procedure would have
sufficed over a hospital stay. In some cases, the hospital loses the revenue
billed, even after an appeal process is completed. It is good to note that
recently, The Center for Medicare Services will permit hospitals to re-bill in
cases where hospital admissions are not deemed to be justified.
Hospitals therefore are being creative to insure that they
receive payment for services provided.
Senator Charles Schumer, D-N.Y., announced early in March
his plan to introduce a bill that would have observation stays count toward the
three day requirement.
In the meantime, know that patients admitted through the emergency
department are considered in observation
status in many hospitals. Once there, be certain to have the conversation with
the doctor so that you are not blindsided once discharged.
For more information, read: Patient Status in Hospital can
lead to a jolt, http://www.democratandchronicle.com/article/20130324/NEWS01/303240034/?nclick_check=1
Carmen Coleman, is a trusted Medicare Advisor and
Consultant. She owns Lifetime Financial Group in Rochester, NY offering an
array of insurance products including Medicare Advantage Plans. Visit her
webpage: http://www.rochesterseniors.net
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Lifetime Financial Group, LLC
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