Medicare Semantics Can Cost Seniors Big Bucks

Catherine J Frompovich
Activist Post

For readers who are on Medicare, you better be aware that semantics can determine what type of benefits and coverage you will receive while in hospital, so please listen carefully to this report by NBC News.

Brian Williams and Kate Snow bring attention to, and caution about, the use of certain words on hospital admission forms. The words involved, which make a huge difference as to who pays, are “Inpatient” and “Under Observation.”

Technically, the care a patient receives may not differ, but who pays the bill is determined by which words were used upon admission to hospital, even for three days spent in a hospital bed.

An “Inpatient” admission designation means a Medicare patient will not have to pay the hospital bill, only the deductibles or co-pays, depending upon the patient’s plan and have ancillary rehab therapies paid by Medicare, if needed after discharge. However, if a patient is admitted as “Under Observation,” then the patient is liable for any rehab therapies the patient may need following discharge, as the patient in that report was horrified to learn that she was liable for over $23,000.

The Wall Street Journal wrote in its article “Beware Medicare’s ‘Observation’ Status” this important information:

Observation status can expose Medicare patients to unexpected expenses. As outpatients, their visits aren’t covered under Medicare Part A, which pays for hospital charges above a $1,184 deductible. Instead, outpatient services are billed under Medicare Part B, which requires patients to pay 20% of the cost and imposes no cap on their total expenditures. [1]

[That’s why it is so important to have a Medicare supplemental insurance policy, which covers those costs. Otherwise, Medicare patients can be billed astronomically high rates for services that are not ‘bargained’ for through Medicare agreements with providers.]

Perhaps, it would be wise to discuss this Medicare ‘quirk’ with family so in the event there comes a time when hospitalization is needed, everyone knows what to expect and how a Medicare subscriber should be admitted on hospital forms. The “Under Observation” rate of admissions in hospitals can range as high as 70 percent per hospital! That little Medicare ‘surprise’ is something seniors need to know about.

Maybe it wouldn’t be a bad idea to talk about the Inpatient versus Under Observation ‘payment plans’ with one’s physician just so everyone is on the same page. However, Medicare seems to have the upper hand in deciding whether a patient was admitted correctly, even to reviewing hospital records at a later date. Be aware and keep accurate records.

“Under Observation” apparently is equivalent to “outpatient” while in hospital. The Centers for Medicare and Medicaid Services (CMS) offers an 8-page information brochure, which Medicare subscribers are encouraged to print out and study.

CMS defines Under Observation status this way:

Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short-term treatment, assessment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital….the purpose of observation is to determine the need for further treatment or for inpatient admission. Thus, a patient receiving observation services may improve and be released or be admitted as an inpatient.

The Center for Medicare Advocacy, Inc. asks for help in ending the Observation Status because it can cost seniors megabucks. See this story:

For Hospital Patients, Observation Status Can Prove Costly

According to the Center for Medicare Advocacy, there is

Legislation pending in Congress, the “Improving Access to Medicare Coverage Act of 2013” (H.R. 1179/S.569) can end the problem of Observation Status. Contact your legislators now to support this critical legislation.

[It is a petition readers may want to sign. I did.]

On the web there’s another site that discusses “Coding Q&A: Outpatient vs. Inpatient vs. Observation Status Under the Medicare Payment Systems.” More important information to digest!

However, for more detailed information on how Medicare covers hospital services, including premiums, deductibles, and copayments, visit www.medicare.gov/publications to view the “Medicare & You” handbook. You can also call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048.

Image credit: Colin Dunn

Notes:
[1] http://online.wsj.com/news/articles/SB10001424052702303376904579135732284488114

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Catherine J Frompovich (website) is a retired natural nutritionist who earned advanced degrees in Nutrition and Holistic Health Sciences, Certification in Orthomolecular Theory and Practice plus Paralegal Studies. Her work has been published in national and airline magazines since the early 1980s. Catherine authored numerous books on health issues along with co-authoring papers and monographs with physicians, nurses, and holistic healthcare professionals. She has been a consumer healthcare researcher 35 years and counting.

Two of Catherine’s more recent books on Amazon.com are Our Chemical Lives And The Hijacking Of Our DNA, A Probe Into What’s Probably Making Us Sick (2009) and Lord, How Can I Make It Through Grieving My Loss, An Inspirational Guide Through the Grieving Process (2008).