For many Medicare patients at the hospital, phrases like “inpatient” and “observation status” can easily blend in undetected with all the other medical and insurance lingo echoing around the halls.
After all, either of those labels may translate to a bed in an inpatient unit, physician care, scans, medications and hospital food.
But when unexpected bills start arriving weeks later, that label could make all the difference.
While Medicare patients in observation status may have been in a hospital for several days, they were actually in a kind of limbo: They received care, but they were never technically admitted as inpatients.
Want to publish your own articles on DistilINFO Publications?
Send us an email, we will get in touch with you.
This means those patients weren’t covered by Medicare Part A — which covers a complete hospital stay once a one-time deductible is met; but Part B, instead.
As a result, patients must pay part of their doctors’ fees, along with co-payments for labs, scans and hospital drugs.
It also means that Medicare will not cover their subsequent rehabilitation at a skilled nursing facility — something that it does cover for Medicare patients who are admitted to a hospital for at least three days.
The number of observation stays at hospitals has been on the rise for several years.
Hospitals complain it is because Medicare has become more strict in denying claims for short inpatient admissions, insisting those visits should have been labeled as “observation.” Hospitals receive significantly less reimbursement from Medicare for observation stays than for admissions.
On Oct. 1, a new Medicare rule dubbed the “two midnights rule” went into effect, intended to define the foggy boundaries of observation and inpatient care.
Hospitals say it signals a dramatic shift in how Medicare patients are admitted to hospitals and how those hospitals are reimbursed.
But it’s not necessarily for the better — for patients, or for the hospitals, critics say.
The Connecticut-based Center for Medicare Advocacy, which has long opposed the Medicare observation policy, has said the new rule does nothing to help patients.
“Prior to this two-midnight rule, if you thought someone was sick enough to spend the night in the hospital, then the hospital got reimbursed,” said Dr. Dan Fisher, a surgeon and the chief of staff at Erlanger Health System.
“Now you have to be sick enough to spend two nights in the hospital for it to count toward that. If you’re not sick enough to spend two nights, then Medicare is starting to say that you’re not very sick at all.”
Date: October 20th, 2013