Medicare Coverage:\u00a0<\/b>Observation vs. Inpatient Status<\/b><\/p>\n
On September 23, a federal district court in Connecticut dismissed the case of\u00a0Bagnall v. Sebelius<\/i><\/a>.\u00a0 A group of Medicare beneficiaries, the Plaintiffs, filed this lawsuit to protest the use of \u201cobservation status\u201d during their hospital stays.\u00a0 Patients on observation status are designated as outpatients, even though they may stay on a hospital floor for days and receive the same care as inpatients.\u00a0 The Plaintiffs were all hospitalized between three and seven days, but were either never formally admitted to the hospital as an inpatient, or were admitted for less than three days.\u00a0 The members of this group were represented by the Center for Medicare Advocacy and the National Senior Citizens Law Center.<\/p>\n Patients on observation status receive the same care as inpatients.\u00a0 Because of this, patients may not know whether their status is inpatient or observation.\u00a0 Some do not find out until they receive a Medicare Summary Notice explaining their benefits.\u00a0 These notices typically arrive weeks or months after their hospital stay.\u00a0 The out-of-pocket cost to a patient on observation status is generally much higher than the cost to an inpatient.\u00a0 Medicare pays almost all of the cost of an inpatient stay. \u00a0Outpatients on observation status will have co-pays for tests and pharmaceuticals.\u00a0 Also, patients must be hospitalized\u00a0as inpatients<\/i>\u00a0for three consecutive days to receive Medicare coverage of nursing home care. As a result, patients on observation status must pay privately for skilled nursing care or rehabilitation services following their hospitalization.\u00a0 Some patients have to dip into their savings or cash out life insurance policies to cover the high costs. \u00a0Others are forced to go without care.\u00a0 The Plaintiffs in\u00a0Bagnall v. Sebelius<\/i>\u00a0faced out-of-pocket costs of between $4,000 and $10,000 for nursing home care.<\/p>\n The judge in\u00a0Bagnall v. Sebelius<\/i>\u00a0stated that it was up to the medical discretion of the treating physician whether a patient was formally admitted to the hospital as an inpatient or kept for observation.\u00a0 The judge also found that Medicare was allowed to consider someone an inpatient only if that person has been formally admitted by a hospital, even if the patient remained in the hospital for days on observation status.<\/p>\n Due to the court\u2019s decision in this case, the use of observation status will likely continue to trouble Medicare patients.\u00a0 According to the independent Medicare Payment Advisory Commission, the number of hospital stays classified as \u201cobservation visits\u201d rose nearly 68% nationwide from 2006 to 2011.\u00a0 A government study also found that more than 600,000 Medicare patients in 2012 were in the hospital for at least three days but still did not qualify for coverage of nursing home care.\u00a0 Elderly patients need to be aware of what observation status means and what its consequences are, especially as this practice is so widespread.<\/p>\n If you are a Medicare beneficiary and you require medical treatment in a hospital, ask about your status often. \u00a0If you have questions about Medicare, or about other methods of financing health care services, please contact Weatherby & Associates, PC at 888-822-8778 to learn how we can help.<\/p>\n Medicare Coverage: Observation vs. Inpatient Status<\/a><\/p><\/blockquote>\n