When a senior becomes ill and is admitted into the hospital, it can be a very scary and trying time for them and their loved ones. They will, no doubt, have many questions for their doctors and nurses and will want to know, among other things, what is wrong with them, what types of medical tests will be conducted, what courses of treatment will be required, and most important, when they will be stable enough to return home.
Hospital patients, particularly seniors on Medicare, most often have no idea whether they are admitted to the hospital on an “observation” basis, or whether they were admitted as an inpatient—they just know they are in the hospital. But in a troubling trend, hospitals are increasing their use of observation stays and are keeping patients in observation status longer. For example, the number of seniors entering the hospital for observation increased by 69 percent over five years, to 1.6 million in 2011, and eight percent of Medicare patients had observation stays longer than 48 hours in 2011, up from three percent in 2006.
The financial consequences of this distinction between an observation stay and inpatient admittance can be severe for seniors.
I recently heard from a Portland woman whose mother-in-law went to the ER complaining of chest pain. She was put in the hospital on observation status where she remained for five days. During that time, she became very weak, had difficulty swallowing, and lost 20 pounds. She was discharged to a nursing facility where she stayed for nearly a month of follow-up care. Her family had been told that she was being “observed” when she was in the hospital, but understandably, they had no idea what that meant. They were therefore stunned to learn that they would have to pay more than $9,000 because Medicare would not cover the skilled nursing care. This was a huge financial burden for the family.
Medicare originally intended observation stays as a way to give hospital physicians more time to run tests or do lab work in order to decide whether a patient should be admitted to the hospital or is stable enough to go home. These observation stays, which Medicare considers to be outpatient care, usually lasted between 24 and 48 hours.
According to the Inspector General of the US Department of Health and Human Services, however, Medicare beneficiaries had more than 600,000 observation stays that lasted three nights or more in 2012. Many of these patients find themselves in a kind of Medicare “twilight zone,” where they may be in a hospital bed for days, receiving care and treatment from doctors and nurses, but still have not officially been admitted to the hospital as an inpatient.
When seniors are not admitted into the hospital as in inpatient, they are held responsible for outpatient copayments and prescription drug costs. There also is no out-of-pocket cap on these costs.
Most concerning is that if a Medicare patient is not formally admitted as an inpatient, Medicare will not pay for any subsequent skilled nursing or rehabilitation care.
A Medicare patient must spend three consecutive midnights in the hospital as an admitted patient in order to qualify for coverage for care in a skilled nursing facility. As a consequence, if a patient who has been on observation status needs follow-up nursing home care, they must pay the entire cost themselves — even if they have spent the last three midnights in a hospital bed being cared for by the hospital’s doctors and nurses.
I believe this Medicare requirement needs to change and have cosponsored legislation, the “Improving Access to Medicare Act,” which would deem time spent in hospital observation status as inpatient care for the purpose of the Medicare three-day prior hospital stay requirement.
This important issue was also the topic of a recent hearing held by the Senate Special Committee on Aging, where I serve as Ranking Member. Among the witnesses at our hearing was Bob Armstrong, who is the Vice President of Elder Services at St. Mary’s Health Systems in Lewiston. In his testimony, he explained the many problems patients are facing as a result of the increasing number of observation stays. He too has seen far too many cases where seniors were stuck with unexpected, enormous, and financially burdensome bills because they had no idea that Medicare would not cover their care at a skilled nursing facility.
During the committee hearing, we also heard from a medical doctor who explained that this Medicare rule is also a problem for doctors. When doctors first see a patient, this doctor explained, they often have no initial idea what is wrong with the patient or how long the hospital stay could be. These doctors should be concerned with diagnosing and prescribing the best course of treatment for their patients, rather than worrying about whether the status of a hospital stay could affect Medicare eligibility should patients require a skilled nursing facility upon leaving the hospital.
I will continue to work in the U.S. Senate to ensure that hospital observation stays count toward time spend in the hospital for Medicare purposes. When seniors require hospitalization, their focus should be on their health and getting well, not on whether they will require skilled nursing care that Medicare will not cover.
