Minor hospital stay could cause “sticker shock” for Medicare patients

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BUFFALO, N.Y. (WIVB) – It is a loophole in Medicare regulations that affects patients going from the hospital to a skilled nursing facility, or rehabilitation center: the difference between that patient being formally admitted to the hospital, or held “for observation” can amount to thousands of dollars Medicare will not cover.

This discrepancy in coverage has happened so many times to senior citizens, Congress passed a law to do something about it, just short of fixing it.

Medicare recipients sent to an emergency room for an injury or illness that is non-life threatening might be held for several hours without being formally admitted.

If that patient is then referred to a skilled nursing home or rehab facility, costs there can easily run into the thousands of dollars, but Medicare will not cover the nursing home expenses or the cost of rehabilitation.

Keith Lind, Senior Policy Advisor for AARP’s Public Policy Institute explained, to qualify for nursing home or rehab coverage by Medicare you have to receive at least 3 days of inpatient care at the hospital.

“If you go to the emergency room and you either stay in the emergency room, or are under observation as an outpatient, but are not admitted as an inpatient–no matter how long you are there–it does not count toward the 3-day inpatient stay required for coverage of a skilled nursing facility.”

Lind also pointed out another shortcoming of that loophole, if a Medicare recipient is only under observation, rather than inpatient, they will be responsible for a 20% co-pay of any prescriptions or pills they get through Medicare Part B.

Now, a new federal law, the Notice of Observation Treatment and Implication for Care Eligibility Act, requires hospitals to notify Medicare patients beginning in January if they are receiving outpatient treatment, so they can discuss the options with their doctor.

“It is very difficult for a patient to know–they are sick, they are under stress. The family may or may not know what is going on, they may or may not know whether they are going to need rehab care, or skilled nursing care after the hospitalization. It is a very awkward position for a patient to be in.”

Medicare officials estimate hospitals will be issuing about one-and-a-half million of these new notices a year. Lind said, AARP has offered a proposal that would credit outpatient time toward the inpatient period for the purpose of Medicare coverage, but this new measure is an important step forward.

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