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Vol. 22 Issue 25
Congress Changes Billing Rules for Hospital 'Observation Care' - Congress has changed the laws about observation care. Under legislation that passed the Senate recently and was approved earlier this year by the House of Representatives, hospitals are now required to tell Medicare patients when they enter the hospital under “observation care” status, instead of being actually admitted to the hospital.
According to the most recently available data from Medicare, total claims of observation patients increased 91 percent since 2006, to 1.9 million in 2013. Long observation stays, lasting 48 hours or more, rose by 450 percent to 170,219 during the same period, according to a Kaiser Health News analysis.
Most patients do get all the services of being admitted as a patient, but instead of actually being admitted, they are billed differently. Inevitably, they get home from their brief stay and find out that the experience cost them a fortune, what Sen. Susan Collins, R-Maine, described at a congressional hearing as a “devastating” monetary effect on many seniors because, in most cases, these bills come as a total surprise.
The new law doesn’t get rid of observation care. Instead it requires patients be notified 24 hours after they have received observation care. For many patients, that will be too little, too late. In addition, the new law requires that patients get an explanation why they had not been admitted and what their financial responsibilities are.
To qualify for Medicare’s nursing home coverage, beneficiaries must first spend three consecutive midnights as an admitted patient in a hospital, and observation days don’t count.
The big problem that remains for seniors is that while it’s better to know you are on observation status, there’s really nothing you can do about it. Toby Edelman, a senior policy attorney at the Center for Medicare Advocacy, told Kaiser Health News recently that there is no set process for challenging observation care while in the hospital, unlike issues such as disputing a discharge order when admitted patients feel they are not ready to leave.
The only way to switch from observation to admitted status is to persuade a physician or the hospital to make the change, Edelman says. And that decision doesn’t apply to the time the patient has already spent on observation. After leaving the hospital, challenging observation care is inevitably frustrating since Medicare appeals judges may decide that a patient’s condition did not require inpatient-level care – even when they received care that could have been provided nowhere else but a hospital.
A Medicare beneficiary who is admitted on an inpatient basis to a hospital for at least three nights is normally entitled to Medicare benefits post-discharge for skilled care in a rehabilitation center or nursing home. Part A can cover nursing home rehab or skilled care 100% of the first 20 days and all but $157.50 per day for up to an additional 80 days of treatment, but this benefit is only available after an “inpatient” hospital stay for the required three nights.
Source: Washington Watch | Vol. 38, No. 10
Also contributing to this column: Kaiser Health News, the New York Times, ABC News and Modern Healthcare.
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