In a health care emergency, it’s difficult to think about finances. But overlooking this detail could devastate your finances.
The Centers for Medicare and Medicaid Services has a three-day rule that says Medicare will not pay for care in a skilled nursing facility after a patient is discharged from a hospital unless the patient was admitted to the hospital as an inpatient for at least three days. Observation days do not count toward this three-day hospital stay.
Here’s where it gets confusing. There’s a big difference between “admission” and “observation.”
Even if a patient is moved from the basic emergency room to a private room, the hospital may not have actually admitted the patient. In fact, it’s growing more likely the hospital will put the patient on “observation” status.
The reasons for this trend are pretty obvious. In 2012, Medicare started financially penalizing hospitals for “re-admissions” — something that happens when a patient is sent home too early or has a relapse of some sort. The penalties are meant to be an incentive to good care. In October, those penalties increased sharply for re-admission of Medicare patients within a month of their discharge.
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Medicare expects to collect more than $563 million in penalties this year, and last year 83% of hospitals had to pay some re-admission penalty.
Clearly the hospitals must deal with the expensive issue of re-admission, and the easiest way to do that is not to admit patients in the first place. That explains the growing number of patients who are placed on observation status when they arrive.
If a patient does not meet the minimum requirement of having a three-night stay in the hospital as an admitted patient, Medicare will not pay for its promised 100 days of critical inpatient nursing care. This issue doesn’t just apply to emergency admissions. Medicare also pays for up to 100 days of inpatient rehabilitation services after three overnight stays as an admitted patient.
Insist the emergency-room administrator officially admits the patient before they’re moved out of the ER. The administrator will assure the patient will get the same care as if they were admitted. That’s true — but unless the papers read “admitted,” you should object.
You’re entitled to fight the observation status. And you can do that by refusing to sign the papers they will bring to you before they move the patient out of the emergency room. That will make them pay attention — and you will likely win this battle, especially if an IV is involved or an MRI or more sophisticated care is needed. But seniors who are alone and hurting often don’t know their rights.
Every emergency room has a direct connection to the financial-services office and a case administrator. So if someone says he or she can’t change the patient’s status, talk directly with hospital administrators. Don’t let them force or threaten or promise it will be done the next day.
Every day is valuable — unless you are prepared to pay a fortune for home health care or pay privately for a rehabilitation facility.
Terry Savage is a columnist, author and speaker. Email her at firstname.lastname@example.org.