New problem for seniors when moving from a hospital to a nursing home

A growing number of Medicare beneficiaries who are transferred from a hospital to a nursing home are discovering that Medicare won’t pay for the first 20 days of their nursing home stay.

Ordinarily, Medicare covers nursing home stays entirely for the first 20 days as long as the patient was first admitted to a hospital as an inpatient for at least three days. But here’s the problem: A lot of people are discovering that there were never actually “admitted” to the hospital for three days, but rather were in the hospital only under “observation.”

Often, hospital patients often have no idea that they haven’t actually been “admitted” to the hospital. They are given a bed and a wristband, nurses and doctors come to see them, they get treatment and tests, and they fill out a meal chart just as if they had been formally admitted.

Increasingly, hospitals are choosing not to admit patients but rather to place them under observation to determine whether they should be admitted. This is in part due to pressure from Medicare to reduce costly inpatient stays.

Medicare guidelines say that it should take no more than 24 to 48 hours of observation to decide whether a patient should be admitted, but in reality hospitals can keep patients under observation for much longer.

The consequence is that if a patient moves to a nursing home, and later discovers that he or she wasn’t formally admitted to the hospital for three days, the patient must pick up the tab for the entire nursing home stay.

Medicare doesn’t require that patients be notified as to whether and when they have officially been admitted – so it’s a very good idea to ask. If you haven’t been admitted, and if a nursing home stay is likely, you should discuss this with your doctor.

The statistics are telling. Medicare claims for “observation” care in hospitals increased by more than a third between 2006 and 2009. Over the same period, Medicare claims for observation care that lasted more than 48 hours tripled to 83,183.

Patients who discover after the fact that they have been denied Medicare because of this problem usually have little recourse. As long as Medicare pays for the hospital stay – which it usually does on an outpatient basis because the patient hasn’t been admitted – then there is no way to appeal because there has been no denial of coverage. And the denial of coverage for the nursing home stay is technically proper if the patient wasn’t admitted to the hospital for three days.

A bill that was recently introduced in Congress, H.R. 5950, would fix this problem by allowing the time that patients spend in a hospital under “observation status” to count toward the three-day hospital stay for Medicare nursing home coverage. But it’s not clear what will happen to the bill.

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