Two Crucial Words for Your Medicare Vocabulary: Observation vs. Admission

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1 Two Crucial Words for Your Medicare Vocabulary: Observation vs. Admission In general terms, Medicare is health insurance subsidized by the federal government. It is a great program, with excellent benefits at a low cost. As a health care consumer or a care advocate, it is helpful to build your Medicare vocabulary because the benefits and rules change within the program. These changes can sometimes profoundly affect the way care is delivered. A hot issue for Medicare beneficiaries is whether a doctor charts a Medicare beneficiary s hospitalization status as observation or admission. Those magic words make the difference as to whether the patient will incur additional costs for the hospitalization and whether the patient will receive the Medicare benefit to pay for skilled care in a rehabilitation facility. Imagine this scenario: your father falls in the bath and is raced to the hospital. The ER doctor says that a bone is broken and he will be moved to a hospital room for a few days. Three days later, you meet with the discharge planner and ask about skilled rehabilitative care. The discharge planner surprises you by saying that your father is not eligible for Medicare payment of skilled care because he was never admitted The 2nd Edition of Saving Momma s Home will be available October 31, 2013 on our website: MonicaFranklin.com Saving Momma s Home 2013 incorporates recent changes in the law affecting estate recovery and additional strategies for saving the family home. Call: (865) 588~3700

2 to the hospital. There must be some mistake. He has been on this hospital floor for three days. She responds, He was on the floor for observation. It is different from being admitted, and therefore Medicare won t pay for treatment at a skilled nursing facility. This scenario has become more common in recent years as Medicare has become more stringent with hospitals over admission criteria, especially for shorter lengths of stay. The American College of Emergency Physicians explains: With short inpatient hospital stays (less than the average LOS) Medicare is concerned about overpayment and appropriateness of the admission. As a result, Medicare and a state s Quality Improvement Organization (QIO) monitor hospital discharge data and specifically target short hospital stays. If a hospital is found to have a high frequency of short inpatient hospital stays Medicare will investigate and if inappropriate admissions are found the sanctions can be severe. As a result, hospital health information management (HIM) and utilization management (UM) staff closely monitor the medical necessity of inpatient hospital admissions and short inpatient hospital stays. Their efforts can put pressure on emergency department physicians to make sure that each inpatient admission from the [emergency departments] is medically necessary and will pass fiscal intermediary or Medicare Area Contractor (MAC) scrutiny. In some cases the use of observation status might be an alternative to an immediate inpatient admission. Why does observation or admission make a difference to our patient? First, if the patient s hospitalization is classified as observation, the patient will incur more out of pocket costs for the hospitalization than if he had been admitted. This is true because an admission is covered under Medicare Part A which covers inpatient admissions; however, observation status is covered under Part B, which treats the hospitalization as an outpatient service. Second, Medicare will only pay for skilled nursing care after a person has been admitted to the hospital for three midnights. If faced with a decision to pay out of pocket for skilled care (to the tune of thousands of dollars) or to forego treatment, many choose the latter option placing them at a higher risk for re-hospitalization. They are still eligible for home health, but home health care does not provide the intensity and frequency of therapy afforded in skilled nursing facilities. pg. 2

3 Skilled care is offered on a separate hospital floor or inside a nursing home, and has the added benefit of providing day-to-day care while undergoing therapy. If not receiving skilled care, extra help may be needed for your loved one either through informal assistance from family members and friends or through paid services such as sitters, assisted living care, or long term care at a nursing home. The Center for Medicare Advocacy, Inc. also warns that the level of care can change without notice or can be retroactively reversed: As a consequence of the classification of a hospital stay as outpatient observation (or of the reclassification of a hospital stay from inpatient care, covered by Medicare Part A, to outpatient care, covered by Medicare Part B), beneficiaries are charged for various services they received in the acute care hospital, including their prescription medications. They are also charged for their entire subsequent [skilled nursing facility] stay, having never satisfied the statutory three-day hospital stay requirement. So what can you do? 1. Familiarize yourself with the differences in admission and observation status. For a helpful pamphlet from Medicare detailing the differences, go online to: When you or a loved one visit the ER make sure to give the doctor the full clinical picture. It may help to have the primary care physician consult with the ER doctor and/or fax recent records. If you are unable to be with your loved one, phone the ER department and request to give information to the doctor or nurse. If treatment goes beyond the ER, ask what level of care determination has been made. Ask this question daily to make sure the status has not changed. If you do not agree with the level of care, try to have it changed by speaking with the doctor, utilization review nurse, and case manager. Ask your primary care doctor to consult with the hospital doctor. Call: (865) 588~3700 pg. 3

4 Begin working with the discharge planner as early as possible. Many discharge planners do not work weekends, but you can still ask to leave a voic for him/her to phone you as soon as he/she returns to the hospital. If ineligible for Medicare payment of skilled nursing care, make sure that an order for home health is written and the referral process is begun. Remember, you do not have to do this alone! Your elder care coordinators want to help and can make recommendations for other services such as personal care attendants, respite care in an assisted living, and medical equipment companies for adaptive equipment that may be needed. For more information on appeals you can read the Center for Medicare Advocacy, Inc s helpful Self Help Packet for Medicare Observational Status. Share your knowledge with others. Help those in your life with Medicare by sharing this information and the information from the websites cited. What is happening in the legal arena to help people who stay in a hospital for 3 midnights, regardless of observation or admission status, go to skilled care? First, this practice is being attacked in a United Federal District Court in Connecticut. On November 3, 2011, the Center for Medicare Advocacy, and co-counsel National Senior Citizens Law Center, filed a nationwide class action lawsuit to challenge this illegal policy and practice. Bagnall v. Sebelius (No. 3:11-cv-01703, D. Conn) states that the use of observation status violates the Medicare Act, the Freedom of Information Act, the Administrative Procedure Act, and the Due Process Clause of the Fifth Amendment to the Constitution. As of April 2013, two motions were pending regarding class certification and a motion to dismiss. Unfortunately, the federal district court found in favor of the defendants. Interestingly, the Department of Health and Human Services Office of Inspector General (OIG) issued a July 2013 memorandum that describes the nationwide use of observation and outpatient stays in calendar year OIG reports that more than 600,000 Medicare beneficiaries had hospital stays lasting at least three midnights but not including at least three inpatient midnights. It recommends that the Centers for Medicare & Medicaid Services (CMS) consider how to ensure that beneficiaries with similar post-hospital care needs have the same pg. 4

5 access to and cost-sharing for SNF [skilled nursing facility] services. The CMS, Final FY 2014 Hospital Inpatient Prospective Payment System was issued August 2, To see the press release with links to fact sheets and other information, go to Items/ html. According to the expert analysis of Medicare Advocacy attorneys, these regulations do not provide a true fix to the issue of patients being classified as observation versus admission status. However, a change in the law would provide the appropriate solution to protect patients. Proposed Legislation is a true fix! Call your Congressman or Congresswoman and express your support for H.R.1179 and S Improving Access to Medicare Coverage Act of This bill was introduced in the House and Senate on March 14, The proposed legislation amends title XVIII (Medicare) of the Social Security Act to deem an individual receiving outpatient observation services in a hospital to be an inpatient with respect to satisfying the threeday inpatient hospital requirement. Thus, a patient who has received three days of outpatient care while in the hospital would be entitled to Medicare coverage of skilled care in a skilled nursing facility (SNF). In other words, Improving Access to Medicare Coverage Act of 2013 would fix the problem!! The Senate bill has been referred to the Senate Finance Committee. Contact each member of the Senate Finance Committee to express your support. Your voice does make a difference and will help to protect you or a loved one so that you receive the care needed after a hospitalization. As our healthcare system struggles to provide quality patient care, manage burgeoning costs, and adhere to countless changing and evolving rules and regulations, it takes knowledge, gumption, and persistence to advocate for the best care for families. When there is an ER visit bring your cell phone. Bring your notepad. And don t forget your gumption. Call: (865) 588~3700 pg. 5

6 4931 Homberg Drive Knoxville, TN Do you want to change your Medicare Plan? Medicare is not a part of the Health Insurance Marketplace; therefore, you may remain in your Medicare Plan if you are happy with it. If you are in a Medicare Advantage Plan, you may disenroll and switch to Original Medicare (Part A and B) only from January 1, 2014 and February 14, To dis-enroll from your Medicare Advantage Plan and switch to Original Medicare, you should contact your current plan or call MEDICARE (TTY ). Remember: If you return to Original Medicare, you will need to purchase a Medicare Supplemental or Medi-gap insurance policy. If your current Medicare Advantage Plan includes prescription drug coverage, you will also need to choose a Medicare Part D plan if you want prescription drug coverage. If you are in a Medicare Advantage Plan, and you would like to switch to a different Medicare Advantage Plan, you must do so between October 15, 2013 and December 7, You may switch Part D prescription drug plans between October 15 and December 7, The effective date will be January 1, We are conveniently located in Historic Homberg Place at: 4931 HOMBERG DRIVE pg. 6