Beware This Very Expensive Medicare Detail

By Patrice A. Putman, Maine elder law attorney

Medicare rules and policies are always confusing but there are some rules that, over time, people tend to hear about. One of the Medicare policies that people tend to be familiar with is the one that basically says, if you have been an inpatient in the hospital for three or more days, Medicare will pay for Skilled Nursing Care for up to 100 days. This rule has recently been at the forefront of much news because of a settlement in the Jimmo v. Sebelius case. Prior to this settlement, Medicare would often deny payment for Skilled Nursing Care if the patient was not making “substantial improvement”. Now, since the Jimmo settlement, Medicare must pay for care during those 100 days if the care is needed to maintain or simply prevent deterioration in the patient’s clinical condition. Continued improvement is no longer necessary.

The Jimmo settlement is great for patient care, but there is another detail in the Medicare law that people should be keenly aware of. This has to do with those three days of “inpatient” hospital care. The unknown detail has to do with what is considered “inpatient” hospital care. For Medicare purposes, in determining what is considered an “inpatient” hospital stay, emergency room care and being in an “observation” status do not count as inpatient care. A patient can be held in “observation” status for multiple days, on a regular hospital unit, in a regular hospital bed without any clues that, for Medicare purposes, they are not considered an inpatient. Then, when that patient is later transferred to a Skilled Nursing Unit, Medicare will not cover their care. The Center for Medicare Advocacy states in its Summer 2013 Center News: “Hospitals stays that are classified as observation, no matter what types of services are provided and no matter how many days the patient remains hospitalized in a bed, are considered outpatient.”

Congress has put forward legislation that would require time spent in observation to be counted toward meeting Medicare’s three day requirement but its passage appears doubtful despite large bipartisan support and 90 co-signers, so this problem is not going away quickly.

What can you do? ASK!!! If you or a loved one has been admitted into a hospital and are likely to move to a Skilled Nursing Unit, speak to your doctor or the Nurse Manager of your hospital unit about whether you are classified as an “inpatient” or an “observation” patient. If you are told that you are an observation patient, ask your physician to review this status and explain to your doctor why it matters; they may not know. Once you know that you are considered an “inpatient”, ask that this be confirmed in your medical record. Not knowing or not speaking up can lead to a financial disaster when you assume your care at a Skilled Nursing Unit is covered (because you have been in the hospital for 3 or more days) and later find out that Medicare will not pay for that care.

The information provided here is for educational purposes only. It should not be construed as rendering legal advice or offering an answer to a specific legal problem.