You have a fall and fracture your spine. You end up in the hospital for five days. You spend your stay receiving hospital nursing care in a hospital room lying in a hospital bed. Your only clothes for five days is a hospital gown. You endure hospital food the whole time. You even have that fancy bracelet with your name on it.
You are discharged from the hospital to a rehab facility. You are now told your traditional Medicare will not cover your rehabilitation because you were never in the hospital as an “inpatient”. You were only there as an outpatient under “observation”. That label can cost you thousands of dollars. And if Medicare does not cover the costs of rehab services, neither does your Medigap Medicare supplement policy.
Medicare rehab rules. Under traditional Medicare, if you have spent three full days, including three nights, in the hospital as an inpatient, you qualify for Medicare paid skilled nursing care in a rehab facility. Medicare will pay the entire cost for the first 20 days of your rehab and the excess over $148 per day, in 2013, for the next 80 days of your rehab, after which time, you pay the entire cost. However, if you were only in the hospital under observation, your rehab will be private pay from day one. If you have a Medicare Advantage plan, you are not covered by traditional Medicare and you have to consult your plan documents for the determination of any coverages.
Observation on the rise. More and more patients are never being admitted to a hospital that they have been in for two or three days or longer. According to a Brown University study of 2007-2009 statistics, there was an increase of 34% in the number of hospital patients admitted under observation, in just three years.
Some hospitals have entire wings dedicated to observation patients. Even though Medicare tells hospitals to make a decision whether to admit or discharge a patient under observation within 24 hours, this often doesn’t happen. Patients may spend days in the hospital under observation, but are never admitted. They are considered outpatients. The Brown study found that there was an 88% increase, over three years, in the number of observation patients spending three or more days in a hospital.
There are a number of reasons for this trend. One reason that has been given, is the higher scrutiny under which Medicare reimbursement is made for the medical necessity of a hospital admission. Another reason is that Medicare limits hospital reimbursements if a patient is readmitted for the same or similar condition within a certain period of time after an initial admission.
No matter what the reasons, be on the look-out for this happening to you or a loved one. Although in March 2013, Medicare has issued new proposed rules addressing observation determination, the Center for Medicare Advocacy claims the proposed changes will not help patients. A class action suit has been filed to halt this practice, which denies patients post-hospital rehab services.
Avoid the observation trap. Consumer advocates have some advice to help you avoid the observation trap:
● Ask about your status daily; it can change at any time.
● If you are in observation, ask for a redetermination.
● Ask your own doctor if observation is justified.
● If you do not qualify for post-discharge rehab services, ask your doctor if you qualify for the home health care benefit for the services.
● If you end up private paying for rehab services after a hospital stay, appeal the observation status determination.
For further information and assistance, see http://www.medicareadvocacy.org/2013/02/12/self-help-packet-for-medicare-observation-status/. New rule for when rehab ends. Under the old Medicare rules, if you were receiving skilled nursing care in a rehab facility, rehab services could cease at any time during the 100 day coverage period if you were not showing any “improvement” with the rehab services. This all changed on January 24, 2013, when a settlement was entered in a Federal class action lawsuit against The Centers for Medicare & Medicaid Services (“CMS”).
Under the settlement agreement, if you require a covered level of skilled care in order to prevent or slow further deterioration in your condition, you still qualify for Medicare coverage for the rehab services during the 100 day period. The “Improvement Standard” is no more. Now, if stopping rehab would make matters worse, then rehab can be continued.
CMS claimed in the lawsuit that there never was an Improvement Standard. CMS claimed Medicare policy has long recognized situations where no improvement is expected but skilled care is, nevertheless, required in order to prevent or slow deterioration and maintain a beneficiary at the maximum practicable level of function.
Regardless, CMS has until January 24, 2014 to complete all manual revisions and an educational campaign to recognize this new standard., which CMS claimed wasn’t new. See http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Jimmo-FactSheet.pdf for further information.
If you find yourself or a loved one needing rehab services after a hospital stay, stand up for your rights. You have paid for your Medicare. You should get the benefits for which you have paid.
By: Matthew M. Wallace, CPA, JD
Published edited April 28, 2013 in The Times Herald newspaper, Port Huron, Michigan as: Qualifying for Medicare rehabilitation services