Hook Law Center: Hospitalization as an Inpatient vs. "Under Observation:" If You're Medicare Eligible, the Difference Can Be Very Costly

Hook Law Center: Hospitalization as an Inpatient vs. "Under Observation:" If You're Medicare Eligible, the Difference Can Be Very Costly

Hospital Admission Advisory

Do you know the difference between being admitted to a hospital as an INPATIENT or as someone UNDER OBSERVATION? If you're eligible for Medicare, the difference can be very costly. Consider the scenario of Laraine Sickels, a retired teacher from Whidbey Island, Washington. At 71 she went to the hospital because she had fallen at a friend's house. It was determined that she had 3 breaks to her pelvis. She spent 5 days in the hospital, but during that time she was only considered "under observation." Unaware of this, when it came time to be discharged, she was released to a skilled nursing facility. That's where the problem started. She got good care there, but because she had not been spent 3 days in a hospital as an inpatient, her 10-day stay at the skilled nursing facility was hers to pay. Medicare covers the first 20 days in a skilled nursing facility completely as long as you've been in the hospital at least 3 days classified as "inpatient". In addition, that same patient who was classified as "inpatient" will pay for days 21-100 at the skilled nursing facility at the rate of $144.50, a fraction of the true cost. (Amanda Gengler, "This could hurt--a lot," Money Magazine, August 2012, p. 72-3)

So what's happening? Well, Medicare is attempting to trim expenses. One way they've decided to do this is that, for certain cases, the patient who may have only one ailment gets classified as "under observation" while tests are run. This classification allows them to reimburse hospitals at a lower rate. "In 2009, the most recent data available, observation stays topped 1 million, up 25% from 2007, according to a study published by researchers at Brown University." (Gengler, p. 72) From their point of view, your care is the same. Medicare just winds up paying a lot less.

So how can you ensure that you will have the favorable classification of "inpatient?" Well, first of all, you must ask what your classification is. If it is not "inpatient" then you must ask that your doctor review your situation and possibly take it to a hospital review committee. The time to get your status changed is while you are in the hospital, not after discharge, when it is  impossible. Make sure everyone is aware of your past medical history or other risk factors which may favorably influence the classification. (Gengler, p. 74-75)

If you still remain "under observation," you have the option upon discharge of receiving home help, if that is a workable option. Medicare will cover some in-home help, even if you weren't "inpatient." Also, if you must go to the nursing home to recuperate, you can ask the nursing home to bill Medicare. That gets you in the system. You will be denied by  Medicare, but after 2 denials, your case then goes to an administrative law judge. At that point, you will need the doctor involved in your care to testify or write a letter on your behalf. You may also want to consider help from an elder law attorney or from the nonprofit Center for Medicare Advocacy at medicareadvocacy.org. (Gengler, p. 74-75) The attorneys at Hook Law Center are experts in Medicare advocacy.     

Hook Law Center has been providing the highest quality of legal advice to the communities of Hampton Roads for more than 80 years. Our practice is dedicated to seniors, and disabled persons, their families and advocates. Our professional staff can respond to our client's care needs on a 24 hour basis, and our Attorneys are available to provide expertise on every issue facing senior citizens from long-term and life care planning to estate and trust issues as well as financial, investment, public benefit, and insurance assistance. Visit their website for more information.


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