Don’t Let Observation Kill Your Medicare Coverage
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Most people over age 65 expect Medicare and Medicare supplemental insurance to pay for hospital care and the cost of physical therapy. Tragically, many patients become stranded in a no-man’s-land where no insurance pays hospital or rehabilitation bills because of poor care management by healthcare providers.
Medicare pays for physical therapy and other skilled care in a rehabilitation or nursing home facility if the patient admitted to a hospital for a stay lasting at least three nights. Sometimes, however, doctors will place a patient in a hospital for “observation” without formally “admitting” the patient to the hospital for in-patient services. This observational stay does not satisfy Medicare’s admission requirement and does not trigger Medicare coverage of any of the patient’s health care costs – not even the hospital bill. Under those circumstances, if the patient’s private health insurance does not pay for the cost of care, the patient can easily end up with thousands or tens of thousands of dollars in uninsured health care expense.
Medicare standards indicate that a doctor can place a patient under hospital care for observation for a short duration that should not exceed 24 – 48 hours. However, evidence (and our observation of actual cases) indicates that some doctors place patients under observational care for more than 48 hours (sometimes several days). Patients and their families should be aware of the Medicare rule and make sure that any hospitalization follows the Medicare standards. Because health care is so expensive, it is critical that the patient or the patient’s family determine the hospitalization status immediately and challenge an observational placement very vocally and persistently if they think that the status is incorrect. If a patient or the patient’s family waits too long to object to the hospitalization status, the very small time windows for objections and appeals may close and the patient may be stuck with an expensive hospital bill or nursing home bill permanently.
Jeff R. Hawkins and Jennifer J. Hawkins are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers and Jeff is a Fellow of the American College of Trust and Estate Counsel. Both lawyers are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois. Jeff is also a registered civil mediator and the 2014-15 President of the Indiana State Bar Association.
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