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Medicare Blog | Medicare News | Medicare Information

Hospitalized under observation status, a costly secret

Posted by Guadalupe Cantu on Fri, Jan 31, 2014 @ 01:03 PM

Medicare Supplements More and more seniors are finding out that Medicare will not cover their stay at the hospital because they were not officially admitted. Instead, they received ‘observation’ care, which is an outpatient service not covered under Medicare.

Medicare covers the first 100 days of care for skilled nursing, only for patients who were formally admitted into a hospital for three consecutive days.

This is a growing trend that is very costly for senior Medicare recipients. Recent federal data shows a sharp jump in patients receiving ‘observation’ care. In 2011, 1.4 million patients were being labeled under ‘observation,’ compared to the 920,000 in 2006. The trend is apparent with patients who have longer hospital stays lasting more than 48 hours. Observation stays rose from 27,600 in 2006 to 112,000 in 2011.

The increased problem appears to be due to a Medicare effort to control costs through a program that audits hospitals for possible overpayments. Once the program identifies improper errors, the hospital must comply with Medicare and must refund all the Medicare payments it received. This has made hospitals more cautious about the admission process and what they think could be challenged; as well, it allows a hospital to receive a lower reimbursement for observation status patients.

Since 2011, a long time legal battle has prompted a class action lawsuit from the non-profit Center for Medicare Advocacy (Bagnall v. Sebelius), to force the government to change its policy. It has also encouraged other advocacy groups, healthcare providers, and lawmakers the need to change the law.

Momentum to change the law is also (apparent) in Congress, as Senator Sherrod Brown (D-Ohio), is proposing as part of hospital admission process, a legislation that would force Medicare to count all overnight hospital stays; the House of Representatives a similar legislation.

By April Medicare is set to apply a new rule that would require doctors to admit people as patients they expect to stay more than two midnights, and to classify anyone else under observation status. However, there is great resistance to delay the new law from a large coalition of healthcare providers and advocacy groups whom argue that it will be very difficult to comply with the new rule. They argue it would arbitrarily reward patients who happen to arrive at the hospital at certain times of day and that it does not alter the three-day rule.

Traditional Medicare recipients can be affected by the observation status and are the most vulnerable to the rule. Unlike (patients) that uses Medicare Advantage programs, they are subject to their insurance provider’s plans.

Medicare Advantage plans provide comprehensive medical coverage, higher-quality care, better services, and additional benefits, reports The Coalition for Medicare Choices, a national grassroots organization who sole purpose is to protect and improve Medicare Advantage.

Traditional Medicaid program covers 100 percent of the first 20 days of a skilled nursing facility, only when the patient meets Medicare's three-day formal admission hospital rule. Patients are responsible for $152 daily co-pays for the remaining 80 days. Otherwise, patients pay full out-of-pocket cost for the skilled nursing facility if they left the hospital under observation status.

In New York, the daily cost for a skilled private room averaged $230 in 2013, with cost going up to $344 in New York state, according to a survey conducted by Genworth Financial. The survey data illustrates that an observation status patient would pay $34,440 for a 100-day stay in a skilled facility compared to the $12,160 out-of-pocket cost a formally admitted patient; that is $22,280 more.

Hospitals are not required by law to notify patients of their hospital status in many states. The only way seniors may be able to protect themselves from observation status is to constantly ask or have a family member or legal guardian, request to be formally admitted into a hospital.

Medicare Supplements





Please give us your feedback!
Question: Should the government do more to protect seniors by passing a law that makes hospital disclose the patient’s admission status?

Source: Reuters & NBC Nightly News
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Tags: Medicare Advantage, Health Insurance, Medicare, Law, Health Care, Hospital observation status, Observation Status, Officially Admitted

Medicare doctor payments in limbo this year

Posted by Guadalupe Cantu on Fri, Dec 06, 2013 @ 01:33 PM

Medicare Supplements Efforts to replace the Medicare physician payment formula for this year have all but been scrapped. Lawmakers have refocused their efforts and the new deadline for the doctors’ payment formula is 2014.

In a rare bipartisan, bicameral approach the Senate Finance and the House Ways and Means committees are to vote next week on a proposal that would repeal the Sustainable Growth Rate and formulate a new payment method for doctors and hospitals that treat Medicare patients.

The committee votes comes at the heels before Congress leaves town for the year and Capitol Hill is in a rush for a “quick patch” to prevent a 20.1 percent cut due in January to the current payment formula. I a short-term patch is not passed, Medicare could be put on hold until an quick fix is reached.

Earlier this year there was a major push to send the proposal to the president’s desk before year-end and eliminate the massive budget cuts that followed. Current goals have changed in both political parties and are working in an effort to pass the legislation in the committees this year and the Senate and the House in 2014.

In spite the effort to move the payment proposal forward, it is running into some resistance over policy and payment. Lawmakers and aids are in turmoil on how to approach Sustainable Growth Rate (SGR), said Rep. Jim McDermott, top Democrat on the Ways and Means Health Subcommittee and a physician. Pessimism on getting the formula repealed due to dispute over how to pay for it is also high.

“I don’t think they’re going to get a permanent fix,” he said. Republicans “won’t talk real revenues. They’re talking about taking it out of the hides of old people, and that’s not going to happen.”

Adding into the challenge of policy making, The House Republican Doctors Caucus is coming up with their plan, similar to other proposals. The House leaders know that gaining broader support and approval for the SGR replacement plan could be harder if it is not accepted by the GOP Doctors, said Rep. Phil Roe (R-Tenn.), co-chairman of the caucus. “The other members are going to say if the doctors aren’t for it; I’m not for it,” he said.

For years, Members of the Senate Finance, Ways and Means and House Energy and Commerce committees have wanted to repeal the Medicare formula, but there was no real support for the change. That’s because there was no real alternative system in place and repeal was estimated to cost $300 billion or more.

This year the effort got revitalized when the Congressional Budget Office scored repeal at $139 billion and consensus began to form around a replacement plan.

A repeal bill was unanimously passed this summer by The Energy and Commerce Committee and in October, the top Republicans and Democrats on the Finance and Ways and Means committees released a joint proposal will go before Finance on Dec. 12 and is estimated around the $200 billion.

But all focus remains on the “quick patch” for the impending cut and long-term goal of repealing the formula once and for all.

A three-month patch is sought by several leaders on Finance and Ways and Means and physicians. This would force lawmaker to vote for a new SGR bill, keep the cost down and finalize permanent repeal instead of repeat the entire cycle again.

Others would like to prolong the patch as long as they can afford it giving them time to fix the most controversial element of the patch, the payment method, including House Republican leaders, Roe said.

Providers wouldn’t be given too much stability with a short-term patch. The worst that can happen is after Congress did a quick fix, they would fail to reform the payment method.

In either case, this is a very important time, this opportunity for permanent reform should not be left to pass or “let it slip away,” said Bob Doherty, American College of Physicians lobbyist.


Please give us your feedback!
Question: Should the Senate Finance and the House Ways and Means committees’ vote for “quick patch” to prevent a 20.1 percent cut due in January, or should go past 2013 and focus on getting the current payment formula reformed?

Source: Politico
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Tags: Congress, Senate Finance Committee, House Ways And Means Committee, Medicare, Health Care

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