Hospitals Hurting Medicare Patients by Redefining “Inpatient” Care

Up until recently, one did not need to be a legal expert handling hospital related cases to know the difference between inpatient care and outpatient care. As traditionally understood, if you are receiving outpatient care you get to go home that day, and if you are receiving inpatient care, you have to stay in the hospital overnight. It has been a simple distinction. But hospitals are now blurring that distinction in a way that hurts patients, especially the elderly who after a life of hard work rely on Medicare to cover their medical expenses.

How Observation Status Hurts Patients

USA Today reported on this ongoing crisis earlier this month. It explains that under recent changes in the law, doctors have to certify that a patient has a serious enough condition to need at least two overnight stays for Medicare to cover an inpatient admission. However, patients are remaining in outpatient “observation” status for several nights in regular hospital rooms and not being admitted as inpatient-status patients. This becomes extremely costly to consumers because, while inpatient care under Medicare has a deductible, after that deductible is met the care is usually fully covered.

This includes coverage for medications and skilled nursing and rehabilitation facilities required after an inpatient stay. However, if a patient is classified as “outpatient” or as being in “observational status,” none of this aftercare will be covered by Medicare. That leads to thousands or even tens of thousands of dollars that Medicare consumers have to come up with out of pocket. And given that the definition of inpatient has always means “when you have to stay in the hospital,” patients usually have no idea that their aftercare is not going to be covered.

What Can You Do if a Hospital Puts You in Observation Status?

The Center for Medicare Advocacy has provided a list of things you can do if a hospital puts you in overnight observation status. The list includes the following:

***If the patient is still in the hospital:

1. Seek the doctor’s help to “admit the patient as an inpatient.”

2. If the hospital insists on the patient remaining in observation status, as for written notice of the insistence.

3. If the hospital insists on the patient remaining in observation status, tell the hospital that you want to appeal that decision because the care is “medically necessary” and an “impatient hospital level of care.”

***If the patient is not still in the hospital, he or she might still be able to appeal. The patient will likely need the physician to assist.

One final note. The Center for Medicare Advocacy stresses that if the patient will need nursing home care after the hospitalization, it is particularly important that the hospital stay be categorized as an “inpatient admission.” If it is not, Medicare will not cover the nursing home care.

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