Medicare Bad Words? "Under Observation"

[Amethyst]

Now that I've retired, Mr. A. needs to go on Medicare versus being on my Federal health insurance. So when somebody sent me this warning about "Under Observation" being a red flag to Medicare, I thought I'd share with the forum....

Amethyst

How to Avoid the Two Words that Cost Thousands in Medicare Bills - NBC News

 

[REWahoo]

I've seen some recent news articles on the pitfalls of "under observation" vs. "inpatient" designation regarding Medicare payment. Looks to be an expensive differentiation.

 

[MasterBlaster]

One more Gotcha to watch out for

 

[aja8888]

I've seen some recent news articles on the pitfalls of "under observation" vs. "inpatient" designation regarding Medicare payment. Looks to be an expensive differentiation.

DW and I being on Medicare for a while now....let me tell you this:

1. Whenever you make medical appointment: Be sure they accept Medicare, and don't waffle on this.

2. If when you "check in" for the appointment and the attendant asks if your supplemental insurance shall be "primary", say NO, Medicare first. Be clear on this.

3. Lab tests - before you consent to lab tests, make sure Medicare will cover them all. If the lab or physician's office doesn't know, STOP! Call Medicare and ask.

What we have found out over a few years of dealing with doctor's offices and Medicare is that the health care community really doesn't go out of its way to make sure you are covered under Medicare for what they recommend for you. BE CAREFUL!

If you have a supplemental policy (highly recommended), aka "Medigap", please understand that it will only cover the portion of the cost that Medicare does not cover, and NOTHING ELSE!

 

[H2ODude]

We went through this right around first of year with MIL, admitted (or was she) to hospital on 12-26 and sent home 1-4. I was not there as my wife and BIL were for endless discussions about whether or not she was admitted or "under observation." We were a little mystified (having never been faced with this perceived precipitous decision before in her many, many admittances after falls and other maladies) at all the handwringing and debate, sympathies expressed by Dr.s that wanted to change her status but in the end they could not under severe penalties. WTF was all THIS all about? Since she did not require surgery (fracture in tibia) but was in pretty severe pain, they kept her there. It was like no one knew what to do with her and really wanted to be rid of her but didn't know how. DW and I didn't want her back because they had her immobilized with a crotch to ankle brace.

Last day, they took the brace off and put this incredibly looking brace with angle adjustments on it and called an ambulance to move her back to us, 60 miles away. Social worker advised us she would likely have to pay everything since she was only "under observation," but she could pay the bill...or not. They made a follow up visit, for this woman immobilized with this brace, for a Dr. in OUR town for four weeks later. So it was off to the grocery for depends and now our home was sleepy acres nursing home and DW had full time nursing duties. Let's say we were not happy.

After a day of this, we called the local MD office and said we could not wait, had to see him sooner than four weeks. Got appointment for next day. Oh. My. God. Very open and competent older orthopedist; took X-rays and laughed at the brace, threw it in corner and said "Wow...that cost SOMEBODY a lotta money!" Showed us the films of the small fracture and said she only needed a much smaller brace when she was walking, and she needed to be up and walking asap, not immobilized. We knew this ourselves, an 88 yo frail woman in bed for four weeks would never walk again. Oh, and then we had to FIGHT with the PT company the original hospital called for, the new MD wanted who he worked with and knew what he wanted. It was obvious everyone wanted this revenue stream.

Within a month she was using walker pretty much as had been, and now off all PT. Done. We're waiting for the bills, I did see one addressed to her from ambulance company but that's it, and have not heard how much if any it was for.

I know this was a long post, but my goodness the hospital screwed the pooch on this one. If there was no surgery, and they knew she'd have to pay for it, why didn't they tell her that and send her home STAT. As we left we felt like they'd just milked her, over prescribed that gargantuan brace, and also condemned her to immobility for life. Thank God we got the second opinion.

As to the original post re "under observation" who knows? She may yet get a bill for 10-20 grand. It will not be paid. Oh, I suppose we're not supposed to disclose where this happened but it was UNC CH.

 

[aja8888]

Hmmm...thanks for the post H20Dude. Sounds like "under observation" is becoming a new tactic for hospitals to use to get away from having to fill out and send in those pesky Medicare reimbursement forms.

Might be a strategy to inform the hospital up front that if your patient is not admitted as in patient and only kept for observation (and that can be in a room), they may be eating the bill.

 

[Tadpole]

I told my doctor's office that I would not pay for anything they decided to do that Medicare and my secondary insurance doesn't agree to pay for. Why? Well you would have had to have been there and listened to the discussions in the hall as to what they could or could not do whether I needed it or not. They called me in for an appointment; I didn't call them. But, between you and me, what would I do if I got the bill? Heck, I can't figure out the status of my doctor. Medicare says he accepts assignment but, I asked him last year before I went on Medicare and he said what I heard to be - don't worry I never charge more than they allow. Now I wonder - what does that mean?

 

[Silver]

Slightly different issue, but Medicare related.

I have a friend who has had knee replacement that went quite well, and she returned to the same orthopedic surgeon when she knew she now needed a hip replacement. He explained that as of April 1, 2014 he is no longer doing either hip or knee replacement surgeries for Medicare patients because he is not paid enough to make it worth his time.

She was able to schedule her hip surgery with him on March 31.

My DH and I are still a few years away from Medicare, so this kind of stuff makes me wonder how we'll find local health care with which we are comfortable.

 

[MBSC]

Sounds like "under observation" is becoming a new tactic for hospitals to use to get away from having to fill out and send in those pesky Medicare reimbursement forms.

The hospital still receives payment for the observation stay. It is the follow up treatment at the nursing facility that is not covered because the patient has not met the three "inpatient" hospital days criteria. Even though the nursing facility does not receive a Medicare payment, they still bill Medicare in order to receive a denial of payment notice from Medicare for their records. This also generates an Explanation of Benefits (EOB) for the patient.

In addition to nursing facility coverage, the following article also states: "Because observation care is provided on an outpatient basis, patients usually also have co-payments for doctors' fees and each hospital service, and they have to pay whatever the hospital charges for any routine drugs the hospital provides that they take at home for chronic conditions such as diabetes or high cholesterol. "

Link to article: FAQ: Hospital Observation Care Can Be Poorly Understood And Costly For Medicare Beneficiaries - Kaiser Health News

 

[Dave J]

In addition to nursing facility coverage, the following article also states: "Because observation care is provided on an outpatient basis, patients usually also have co-payments for doctors' fees and each hospital service, and they have to pay whatever the hospital charges for any routine drugs the hospital provides that they take at home for chronic conditions such as diabetes or high cholesterol. "

Link to article: FAQ: Hospital Observation Care Can Be Poorly Understood And Costly For Medicare Beneficiaries - Kaiser Health News

This cost my MIL $750 for drugs she took . (Normally about $35 )

Ask lots of questions if you are put on observation or out patient care.

 

[aja8888]

The hospital still receives payment for the observation stay. It is the follow up treatment at the nursing facility that is not covered because the patient has not met the three "inpatient" hospital days criteria. Even though the nursing facility does not receive a Medicare payment, they still bill Medicare in order to receive a denial of payment notice from Medicare for their records. This also generates an Explanation of Benefits (EOB) for the patient.

In addition to nursing facility coverage, the following article also states: "Because observation care is provided on an outpatient basis, patients usually also have co-payments for doctors' fees and each hospital service, and they have to pay whatever the hospital charges for any routine drugs the hospital provides that they take at home for chronic conditions such as diabetes or high cholesterol. "

Link to article: FAQ: Hospital Observation Care Can Be Poorly Understood And Costly For Medicare Beneficiaries - Kaiser Health News

Thanks for the link. It looks like everything is falling into place to screw the Medicare Patient and make it cost/payment favorable for the government and the hospitals, and I'm not even mentioning nursing home/physical therapy coverage beyond that.

The next time my DW is brought into the hospital when her COPD flares up, I will request the hospital tell us if she is admitted or under observation. If she is under observation, I will get her out of there immediately. There are several hospitals near us, and more than one doctor. Seems like between drug coverage under Part B being a game, and now things like this, the fighting between "who gets to keep the money (hospitals, doctors, government)" has really no bearing on the patient and whether he is being taken to the cleaners.

 

[lynxville]

DW and I being on Medicare for a while now....let me tell you this:

1. Whenever you make medical appointment: Be sure they accept Medicare, and don't waffle on this.

2. If when you "check in" for the appointment and the attendant asks if your supplemental insurance shall be "primary", say NO, Medicare first. Be clear on this.

3. Lab tests - before you consent to lab tests, make sure Medicare will cover them all. If the lab or physician's office doesn't know, STOP! Call Medicare and ask.

What we have found out over a few years of dealing with doctor's offices and Medicare is that the health care community really doesn't go out of its way to make sure you are covered under Medicare for what they recommend for you. BE CAREFUL!

If you have a supplemental policy (highly recommended), aka "Medigap", please understand that it will only cover the portion of the cost that Medicare does not cover, and NOTHING ELSE!

That's really good advice

May I just add, make sure things are coded properly, otherwise you have to pay.

 

[spncity]

Sounds like this is similar in other states, but in Maryland*:

One reason hospitals want to do "observation" instead of inpatient "admission" is that if an admitted patient is re-admitted to the hospital within 30 days of discharge (even for a different illness), the hospital's reimbursement is dramatically affected (negatively). Physicians are under intense pressure from the hospitals not to have re-admissions in the 30-day window.

An observations stay means this 30-day clock never starts.

Also, as stated by someone else, "observation" does not get you anywhere near the three days of a hospital stay required for the rehab/nursing home benefit to kick in. (Three days means being an inpatient for three midnights - when the census is counted).

This essentially robs elders of their Medicare benefit for rehabilitation.

There needs to be a change so that three days of observation will trigger the eligibility for the nursing home/rehab benefit, just like a three-day inpatient stay does. Who knows when/if that will happen.

Kindest regards.


*In Maryland, healthcare is still regulated by the HSCRC - Health Services Cost Review Commission which sets rates - and the state still has a certificate of need process (these were eliminated in most states back in the eighties).