When your parents go to the hospital and need to stay over night or longer, be sure the medical staff admits them as official patients and not for observation (which means that technically they are not admitted at all).
People hospitalized for observation do not qualify for Medicare’s skilled nursing care benefit after leaving the hospital, and they will have much higher out-of-pocket costs because many Medicare benefits require formal admission as an inpatient to a hospital, not a stay for observation, which is more like outpatient status.
Much has been written recently about this situation. Brown University gerontologists published their findings in the June 2012 Health Affairs (abstract), explaining that the number of observations rose 34% when compared to standard hospital admissions in 2007-2009. The study analyzed a huge amount of data — the Medicare claims of 29 million individuals between 2007 and 2009.
A report on the study in the June 4, 2012 Kaiser Health News, Study: Hospital Observations Stays Increase 25 Percent in Three Years, points out how researchers also found that patients under observation stayed in the hospital longer than admitted patients — some “observed” for longer than three days.
Interesting Quote from the Kaiser Article
The researchers also suggested that hospitals may be motivated to put patients in observation care since they would not be counted as a readmission if they returned to the hospital. New Medicare rules that take effect later this year will penalize hospitals for patients who are readmitted within 30 days.
Paula Span’s New York Times article, In the Hospital, but Not Really a Patient, offers a lot more information about this situation, and she also points out that hospitals are not required to tell patients how they classify a hospital stay, so it is up to the patient and family members, especially adult children, to clarify the situation.
This Medicare.gov document, Are You and Inpatient or an Outpatient? (downloadable PDF) explains the differences between inpatient and outpatient standing, and includes information about observation hospital status.
Other Articles to Read
- Hospital billing Shifting Costsh – Politico
- Observation Stays for Medicare Patients Create Coverage Problems – California Watch