“I sure thought I was in the hospital” – Admission v. Observation

A decision has just come down from a Federal Judge that is not good for those on Medicare.  The case is Bagnall v. Sebelius in the US District Court in Connecticut.  What this case specifically addresses is the time when a person who is a Medicare Beneficiary goes into the hospital and stays a few days.

If you have heard me speak or read my writings, you know that in order for Medicare to pay for rehabilitation in a skilled nursing home, you have to have been admitted to the hospital for 3 full days.  This is most easily defined as 3 midnights in the hospital.  What the hospitals are doing is putting a person in the hospital under “observational status” which is NOT an admission to the hospital.  The person is in a hospital room, getting all the care they need including drugs and tests making you think you are “admitted” to the hospital.  However, you are really not admitted there.  They are “observing” you.  What is worse, the physician and the staff can tell you that  you are admitted and you are, however, the hospital has a Utilization Review (UR) Committee that can look at your file and reverse your admission as long as you are still in the hospital.  So, even if you are told you are being admitted, you need to clarify that prior to discharge to make sure you are still admitted.  There are very complicated reason they do this but it doesn’t matter to this discussion.

Why does this matter?  Two reasons primarily: 1) If you are on observational status, your Medicare Part A (Hospital coverage that pays 100% after your deductible) does not apply.  You are under Part B which is paid 80% by Medicare and the other 20% is paid by you individually or by your Medicare Supplement.  2) you do not have the requisite 3 day admission to start your Skilled Nursing Facility 100 days of rehab.  People have gone to the hospital for up to 2 weeks and then gone to rehab and incurred very significant expense thinking Medicare Part A was going to pay when they were never actually admitted to the hospital.  They then owe at least the 20% and if Medicare never really approved any of the care, you could pay the full amount.

What do you need to do?  First, read this article: http://www.medicareadvocacy.org/medicare-info/observation-status Read it all the way to the end.  The last section is probably the most important section giving some very practical advice.  This article mentions some forms that you need to be aware of in order to know what is happening.  Second, share this information with everyone on Medicare that you know so they know to be looking for this.  This is a huge issue.  Since the Federal Judge did not certify the action as a class action case, this means that every Medicare Beneficiary is going to have to go to court by themselves to correct this problem.  Third, if this happens, give us a call.  I am not a litigator but I am associated with some firms that will take this case to court to make sure the Medicare system treats your fairly.