Were you “admitted” to the hospital or just there for “observation”? Why does it matter?
Aunt Betty, age 91, fell in her driveway and broke her leg and three ribs. She was in the hospital for 5 days before being discharged to a rehabilitative facility. The hospital said she was there for “observation” and not “admitted.” Under the “observation” status, Medicare pays little for her hospital stay. If she were “admitted” Medicare (and her supplemental insurance) would pay for most of it. Aunt Betty paid $28,000 “out of pocket”. She thought it was covered by Medicare.
This has been a problem for years. Finally, effective August, 2016, there is a new federal law requiring hospitals to tell their Medicare patients if they have not been formally admitted and why.
“ The law was a response to complaints from Medicare patients who were surprised to learn that although they had spent a few days in the hospital, they were there for observation and were not admitted. Observation patients are considered too sick to go home yet not sick enough to be admitted. They may pay higher charges than admitted patients and do not qualify for Medicare’s nursing home coverage. The NOTICE Act requires that, starting Aug. 6, Medicare patients receive a form written in “plain language” after 24 hours of observation care but no later than 36 hours. Under the law, it must explain the reason they have not been admitted and how that decision will affect Medicare’s payment for services and patients’ share of the costs. The information must also be provided verbally and a doctor or hospital staff must be available to answer questions.”
This is a great step in the right direction to protect Medicare patients from the shock of being hit with unexpected hospital costs.
 “Controversy Erupts Over Medicare Observation Care Requirement”, NAELA e-Bulletin, June 15, 2016