Has anyone experienced hospitals keeping a patient on observation versus admitting patient?

A couple of years ago, Medicare suddenly began scrutinizing “Part A” (Hospitalization) claims to a much greater degree than in the past. As a result, many claims where inpatient hospitalization wasn’t clearly necessary were rejected for payment.

Hospitals started to submit any claims that weren’t certain to be paid under Part A as “Observation”, which would be covered by Medicare Part B. Part B only pays 80% of the claim, it has a separate deductible and does not cover some drugs and procedures that Part A would, but the hospitals saw this as a way to at least get 80% of the claim paid rather than $0!

Once they have submitted a claim as Inpatient (Part A), they can’t resubmit it under Part B. But they can re-code and resubmit a Part B “Observation” claim as a legitimate Inpatient Hospitalization under Part A. It usually requires a very helpful physician willing to push this resubmission process, but it can be done!

The hospitals were doing this to get paid something (80%) rather than nothing, but it cost patients in numerous ways! In addition to having their claim paid at 80% vs. 100%, prescriptions administered during the ‘observation’ period also will not be covered! The balance due can easily be several thousand dollars or more! Even worse, the patient is NOT covered for any nursing home, rehabilitation or even home health care if the claim was filed under Part B! If filed as a normal Inpatient Hospitalization, Medicare Part A will cover up to 100 days of skilled nursing care. That difference can cost tens of thousands of dollars and/or be the difference between life and death, literally!!!

My grandmother was hospitalized for just over four full days last February for a severe UTI. They coded the claim as “observation” and I got a bill for almost $4,800! I contacted her physician, who is also on staff at the hospital, and he immediately had them resubmit the claim as a MEDICALLY NECESSARY Inpatient Hospitalization. After they processed the corrected claim, the balance due was only $288.

At that time, Medicare had not defined where ‘observation’ ends and ‘inpatient’ begins. The best they would do is say that observation really shouldn’t last longer than 48 to 72 hours in most cases….but it was a rule or mandate, just an opinion. Last September, they finally established a guideline known as the “two midnight’s rule”. It basically states that any stay in the hospital that passes midnight on two consecutive days should be considered an Inpatient stay, in most cases (they had to leave some wiggle room).

Here’s the link to an excellent legal article about the rule -
natlawreview/article/clarifying-two-midnight-rule-and-part-payments-re-inpatient-care (and a link at the end of the article to the second part, with more info).

Haha the truth is not in them. Hospitals are criticized and scrutinized when a patient returns for the same complaint within 30 days. It can even result in a reduced payment under "Readmissions Reduction Program" see cms.gov law was effective 10/1/2012.
They work around the fine by either admitting under a different diagnosis or taking the patient for observation only. If you suspect they are pulling shenanigans to avoid accountability tell them you know exactly what they are trying to do and demand the chief administrator.

To sum it up, at the ER, when the MD said he was going to send her home, I looked him right in the eye and said "ARE YOU NUTS?" and he literally spun around on his heels and agreed to keep her. She stabilized overnight, and when they released her it was written up as a 24 hr obs.

norest- It's beyond sad- it should be CRIMINAL! That breaks my heart...

Many elderly patients have no one to fight for their rights and protect them from situations like this. But so many caregivers, when faced with something like this for the first time, have no clue where or how to start trying to correct the situation! If my grandmother's physician hadn't been so willing to help last February, I would've had no choice but pay for her home health care and the balance due at he hospital from my savings! And I'm very fortunate that I would have had the money, thanks to money left by other precious grandma when she died in 2012. Otherwise, who knows what might have happened....

How can this country let this happen to our elders???

So pstegman, can one encourage the physician to admit versus be on observation?

The insurance company paid her bill like a full admit, she was there more than 24 hours.

Igozoom...... Just spoke with the woman who had the problem with her mother being under obversation vs admitted and was therefore denied the needed rehab. The mother deteriorated so bad after being sent home without rehab and found out today she died On Feb. 22! Another example of insurance making a wrong decision for someone....... so sad!

My grandmother was hospitalized again in 12/2013 and then in 1/2014 for UTIs. They tried to send us home from the E/R in January, probably because she was readmitted within 30 days. Her physician was out of the country due to a death in the family, so I had to fight the E/R doctor and demand that they keep her (for at least 24 hours).

We could have been kicked to the curb on Monday (or I might have been in need of a bail bondsman) or both??? But between my grandmother's previous four hospitalizations last year (and the many weeks my other grandma spent there prior to her death in 2012), I got to know all of the Charge Nurses very well. In particular I considered the 'head' Charge Nurse (if there is such a thing) who had been there for 15 years and was respected by everyone including the doctors and Admin staff a personal friend and a very strong ally in my role as caregiver! When she came in Monday morning, my grandmother was admitted on an Inpatient basis and she ended up staying for 10 days! But they wanted us to go back home???

Most people know me as a very nice guy, and I usually am. But, in the words of Sharon Osbourne (when someone insulted Ozzy), "The can f#&% with me, I don't give a s#%!, but NOT my family!!! =)