A recent Legislative Alert that has brought an issue back into the news, which everyone covered by Medicare, should understand.
Increasing numbers of Medicare beneficiaries are finding out that Medicare will not cover their post-acute skilled nursing facility stays because they were kept in the hospital for observation rather than being admitted as inpatients.
To address this issue, Sen. John Kerry and Rep. Joe Courtney recently introduced the Improving Access to Medicare Coverage Act, S. 818 in the U.S. Senate and H.R. 1543 in the U.S. House of Representatives.
The bill would specify that a Medicare beneficiary hospitalized under observation for more than 24 hours would be deemed to have been an inpatient and would be considered to have been discharged upon leaving the hospital. The critical difference is that the Medicare beneficiary would be eligible for Medicare Part A coverage of post-acute care.
As an example of what can happen now, with this legislation pending, let’s say you go to the emergency room complaining of chest pain. The hospital keeps you for two days for observation but does not admit you as an impatient. (Be forewarned. It does not matter if you stay in a room in the ER or move a “regular” room. If still under observation you have not been admitted as an inpatient.)
The difference is that your hospital stay is not covered by Medicare Part A. Medicare Part B will cover most of your doctor services when you’re a hospital outpatient, but you pay 20% of the Medicare-approved amount after the Part B deductible.
How can this happen, you ask? Observation status is supposed to be used temporarily while a doctor assesses your condition and decides if hospitalization is medically necessary. However, more and more, hospitals are keeping people in observation status over a period of days.
Why does this matter?
As in the example above, your hospital status as either an outpatient or inpatient affects how much you pay for hospital services (like X-rays, drugs, and lab tests). Your hospital status may also affect whether Medicare will cover care if you get sent to a skilled nursing facility (SNF) if you should need some rehabilitation services after your hospital stay.
Outpatient observation essentially shifts significant health care costs normally covered under Medicare Part A, from the Medicare program, to you the Medicare beneficiary.
What can you do?
If you’re in the hospital more than a few hours, always ask your doctor
or the hospital staff if you are an inpatient (you have been admitted) or an
outpatient (under observation). If you are under observation for more than 48
hours, ask why you are not being admitted. It is most important that you find
out your status before being transferred to a SNF for rehabilitation services. Medicare will only pay for care in a SNF
after a 3-day inpatient stay. If you were not admitted, you won’t have
the required hospital stay and you will be billed for your time in the nursing
What are your rights?
You can ask your doctor to admit you to the hospital, but you cannot mandate it. If you go to a nursing home and later find out that you did not have the 3-day inpatient stay, you can ask the nursing home to bill Medicare for your stay. Although Medicare will likely deny the claim, you will be in a position to appeal the decision. You can also challenge your Medicare Summary Notice when it comes. Follow the guidelines and the deadlines to appeal.