WHEN IN DOUBT…ASK – FINANCIAL IMPACT OF HOSPITAL OBSERVATION STAY ON PEOPLE WITH MEDICARE

Franklin, an 85-year-old retired banker, fell in his yard cutting grass and hurt his back.  He was taken, by ambulance, to the local hospital to be treated.  For the next three days, Franklin was in a hospital bed, getting tests, hospital food, and medications to help ease his pain.  After the three days, he was ready to go to a rehab center for more intensive therapy at an skilled nursing facility rehab center.  Franklin had Medicare, so he was confident that at least some of the days at the rehab center would be covered.  It was not until he got the bill that he learned that he had never been admitted to the hospital as an inpatient.  His stay was coded under what Medicare calls “observation status”.  This means that as far as Medicare was concerned he was not a patient in the hospital at all.  Franklin had spent 2 months getting his strength back at the nursing facility for the out of pocket cost of over $20,000.00.  If he had been admitted as an inpatient, Medicare would have paid 100 percent of his care for the first 20 days in the rehab and then all but about $161.00 per day co pay for the rest of his stay.  Outpatients in observation status don’t quality for care in skilled nursing facility, and the observation status cannot be appealed. 

This scenario, while not unique is and the financial impact is unbelievable.   Having no recourse to appeal the decision caused the Center for Medicare Advocacy to file a class action lawsuit.    This suit and others created a new ruling taking effect March of 2017 by Congress that requires the hospital to inform patients within 36 hours whether they are in the hospital under observation or admitted.  Toby Edleman, of the Center for Medicare Advocacy says “family members are often distraught and in a vulnerable state when the hospital lets them know their loved on is under observation.  They may not pay attention to the notice given all the other demands on their attention regarding their loved one’s healthcare.” 

Advocates emphasize the following when you or someone you know on Medicare goes to the hospital:

1. Remember, even if you stay overnight in a regular hospital bed, you might be an outpatient.  Ask the doctor or hospital staff if an order has been written by the doctor for your admission and the hospital has formally admitted you. 
2. All papers presented by hospital staff that require a signature might have a financial impact.  Be sure to ask what the papers are for, what they mean, and how they might impact payment for the stay at the hospital and any later care, treatment or service the person might need.
3. Ask for a copy of all papers that require a signature.
4. If you are in the hospital for more than 24 hours and are not formally admitted, you should be presented with a Medicare Outpatient Observation Notice (MOON).  That lets you know you’re an outpatient in a hospital or critical access hospital.  After 24 hours, ask whether you have been formally admitted. 
5. Before you agree to go to a nursing facility for rehabilitation after a 3 day stay in the hospital, ask if your stay was observation or admission. This alone can save you thousands of dollars if your nursing home bill is not covered by Medicare due to the observation status.

Feel as if you need help navigating the confusing world of Medicare?  Most people do.  There is good news and there are good people to ask.  For more answers regarding Medicare, you can contact your local Seniors’ Health Insurance Information Program.  To find a counselor in your county, you can go to  www.ncdoi.com/shiip or call  1-855-408-1212.  Certified volunteers provide no cost counseling to individual who have or are about to enroll in Medicare.   These counselors are responsible for providing balanced, unbiased and accurate information to those who seek help so that the consumer can make an informed decision.