Watch out for “observation status” if patient will need skilled care after discharge

If you’ve been an advocate for a person who enters the hospital for treatment and then is discharged to a nursing home several days later, you know that after a three-day hospital admission, Medicare Part A can pay for up to 100 days of skilled nursing and physical/occupational/other therapy in a subacute or rehabilitation facility, provided that the patient requires that level of skilled services to restore or improve the patient’s functional ability or maintain their bodily health. See the Jimmo settlement for details on that coverage. A trap for the unwary is that sometimes you think your patient has been “admitted,” when in fact they are merely being held in the hospital for “observation purposes.” This is called “observation status,” and what sometimes happens is that the subacute facility’s enormous bills for skilled care are then rejected by Medicare (and accordingly, by the patient’s secondary carrier).

A bill has been introduced in Congress called The NOTICE Act,  H.R. 876, as an amendment to the Medicare statute, and would require hospitals to give actual notice to Medicare beneficiaries who were admitted to a hospital, telling them that they had been placed under “observation,” if that status lasts longer than 24 hours. The bill was approved by the House on March 16, 2015, and passed the Senate without amendments on July 27th. Click HERE for the text of the bill. As the patient’s advocate, you may need to engage the physician to ensure that the patient is actually admitted as an inpatient, if their condition calls for it. The Act would at least ensure that the patient knows what has occurred.

The Improving Access to Medicare Coverage Act S843 — was introduced in the Senate on March 24th and would actually amend the Medicare statute so that patients who were kept in the hospital in out-patient observation status for 3 days or more would be deemed to be “inpatients” for purposes of the laws concerning coverage of post-discharge subacute skilled care. That bill would actually solve the overall problem. Similar bills were introduced in the last few Congresses. It is still pending in the Senate Finance Committee. If these issues are of interest to you, contact your representatives in Washington..

 If your loved one becomes entangled in this kind of problem or  other problems concerning ongoing subacute skilled care under Medicare A at rehabilitation facilities, call us for representation … 732-382-6070.

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