Same Care, Higher Bill

Medicare Patients Hospitalized but not "Admitted" Can Face Higher Costs

The front page of the Boston Globe yesterday detailed how some hospitals charge Medicare patients different prices depending upon how the hospital classifies their care.  For instance, a patient admitted for "medical observation" receives a much larger bill than one whose stay is classified as "inpatient."  This is true even though the observation patient "usually share rooms with regular inpatients and receive care from the same doctors and nurses, making their status invisible to them."

[voxxi.com]

Although hospitals do not accept blame for these classification differences, the Globe's article showed that hospitals increasingly keep patients in "observation" status longer than the typical 24 to 48 hours.  This can have a startling effect on Medicare billing.

Medicare covers the cost of rehabilitation care in a nursing home if the patient was admitted to a hospital for at least three days of inpatient care.  However, the days that a patient under "observation" do not count toward the three-day minimum needed for Medicare coverage.  As a result, Medicare patients are getting stuck with bills in the thousands, forcing some seniors to file for bankruptcy.

Out of concern for this, Medicare issued regulations this summer they believe will help hospitals clarify this issue. But others, like Toby Edelman, senior policy attorney at the Center for Medicare Advocacy in Washington D.C., believe the regulations do not provide any clarity.  Edleman believes hospitals may be trying to avoid readmission penalties under the ACA for patients readmitted within 30 days of discharge.