Last week I received a call from Alice, who was uncertain how to pay a medical bill. She just received a bill for $7,000 to cover the cost of her husband, George, being in a facility to help him get stronger after his hospital stay. She asked if she had to pay the bill. She assumed Medicare covered the expenses for George, who is age 80. Talking further, I found George was never admitted to the hospital as an “inpatient,” he was just there for “observation”.
Does Alice have to pay for George’s care? Yes.
It all comes down to whether George is classified as an “inpatient” or an “outpatient.” An “outpatient” is classified as being in an “observation status” category. The difference matters. “Inpatients” are covered and Medicare will pay their hospital stay and the first 20 days of rehabilitative care. The hospital stay for a patient with the “observation” status will be not be covered by Medicare so the family will have to pay the hospital bill.
What could Alice have done if the hospital puts George on Observation status?
If George is still in the hospital:
- Alice could have contacted George’s doctor for help to arrange to “admit the patient as an inpatient.”
- If the hospital insists on Observation status, Alice can ask for a written notice stating this fact and again ask for George’s doctor to help with notifying the hospital that George’s status be changed because the care is “medically necessary” and George requires “inpatient hospital level of care.”
If George is discharged from the hospital it is much more difficult to change his status to an admitted inpatient.
If George needs nursing home or rehabilitative care after the hospital stay, before costs will be paid by Medicare, it is necessary that the patient be in a hospital for at least 3 days, and be considered an “inpatient” and not in the hospital for “observation.
There is a bill in Congress to change the law to eliminate the “observation” status that results in a denial of Medicare benefits, but it seems to be going nowhere.
The “observation” status costs patients thousands of dollars that would have been paid by the Medicare insurance program.
What is the solution? Bring your own advocate to the hospital to assist the patient and follow up on the status of admission. A good resource is the Center for Medicare Advocacy [medicareadvocacy.org].
I don’t suppose you have thought of anyone who could use our services? If so, please have them call us at 208-344-0375. Introductions and referrals are the lifeblood of our practice. Thank you!