Aging Parent Hospitalizations and Observation Status

Just when you think that you have settled the most significant adult child-aging parent issues — when you and your parents have spoken about medical care support, finances, and the range of their end-of-life wishes — along comes another concern to worry about, and it’s one that may be completely out of our control.

Medicare ObservationWe now need to be concerned about the possibility of a parent entering a hospital and assigned to observation status for several days. Observation means that, rather than being officially admitted as a patient, the person is there to be watched, sort of like an out-patient, but not really an out-patient. The problem is, it’s difficult to discover what status a hospital assigns a patient  — the two look almost alike with nurses, doctors, hospital rooms, blood pressure checks, etc.  Admission and observation do not look that different to the patient and family, and apparently many hospitals are not especially  forthcoming with the information.

Why is patient status significant? It’s simple, really. If your parent needs to enter a skilled nursing facility or nursing home after three days of observation status, Medicare will not pay and the family will be required to pay all of the bills, including the hospital costs. For Medicare to pay the bills, a family member must be admitted as a patient for at least three days and not assigned observation status.

Over the past year newspapers and medical or health journals have carried stories about elders and observation, and I share them here so that you can learn as much as you can.

Click to check out large version of this map.

Click to check out large version of this map.

I first learned about observation status and the ramifications for Medicare recipients from a June 2012 New York Times New Old Age blog post by Paula Span, In A Hospital but Not Really a Patient. The article describes the experience of a family that unexpectedly became responsible for medical bills of more than $35,000. Span’s article referred me to a June 2012 Health Affairs article, Sharp Rise In Medicare Enrollees Being Held In Hospitals For Observation Raises Concerns About Causes And Consequences (abstract), which explains the situation in greater depth. A Brown University press release about the lead author of the Health Affairs article, Zhanlian Feng, offers even more information and includes a United States map with state-by-state observation statistics. Span’s article also led me to a publication at Medicare.govAre You a Hospital Inpatient or Outpatient? If You Have Medicare – Ask!  All of this reading could not have been more timely.

Just weeks after reading all these articles, my father went to the University of Virginia hospital for a medical procedure. His physician described how my father, because of his age, would go into a special observation area where he would be watched overnight, and I was glad that I knew enough to ask the right questions. I questioned the physician about whether my father would be considered an admitted patient and therefore eligible for Medicare to pay the bills. I wanted to be sure that it would not be the type of observation status that I had read about in the articles —  which might result in my parents receiving a huge bill. The doctor explained that the unit he was describing was a space that the hospital used for patients who needed just a bit more care but who would go home the next morning — and some did not even stay the night — and that Medicare would pay the bills. Aha, I thought, perhaps teaching hospitals avoid these observation problems.

My family was fortunate. Shortly thereafter a friend’s mother went to the hospital for chest pains and was kept at the hospital in observation status that resulted in substantial bills that the family was required to pay. Now every time I hear about a friend’s aging parent admitted to the hospital, I suggest that they clarify the the admitting status ASAP.

Since I read those first articles, many more have been published including an August 2013 Boston Globe article, Status of Medicare Patients Can Result in Huge Bills, that describes how a well known Boston teaching hospital put an elderly patient on observation status for ten days of care (so much for my teaching hospital theory). I also read a September 2013 Kaiser Health News article, Putting Seniors In The Hospital Under ‘Observation’ May Cost Them Thousands, which provides a good overview of the problem. Even AARP got into the act with its October 2013 policy report, Rapid Growth in Medicare Hospital Observation Services: What’s Going On? (available as a downloadable PDF).

And just the other day, on January 10, 2013, the New Old Age Blog revisited the problem. In Fighting ‘Observation’ Status, a lengthy post that describes new Medicare regulations, lists the conditions most likely to generate hospital observation status, and suggests some strategies for clarifying a patient’s status. Author Susan Jaffe also wrote in considerable detail about how to appeal to Medicare, after a family has to pay for care. Not surprisingly, the process is convoluted and lengthy.

Why are hospitals and Medicare putting elderly parents and their adult children in such a precarious position? Right now there is no sensible answer, but the take-away for me and for all adult children and older adults is to keep asking questions about a parent’s hospitalization until a patient’s status is clear.

At this point, anytime one of my parents goes to hospital, I’ll need to be up to speed on this issue. If your parent ends up in the hospital, you too may need to know as much as possible.

8 thoughts on “Aging Parent Hospitalizations and Observation Status

  1. I’m confused. How can a hospital charge an adult child with their parents medical costs? Tthe parent is admitted in their own name, they are responsible for their own bills. What if there were not children?


  2. This is very important, so ask evey day what the status is. Dad was on observation status for days before he was admitted. He was actually admittd in the middle of the night because a procedure had to be performed. Observation status is a hospital decision based on fear that Medicare will refuse to pay under Medicare Part A because the stay did not meet the criteria for admittance, and thus the hospital is held responsible for the extra charges. If the patient is on observation status, he is an outpatient and Medicare pays at Part B rates wich means a 20% copay which could be substantial. Certain procedures autmatically qualify the patient for admittance. It is very complicated.

    I did worry about it becaused as you noted, Medicare would not pay for a nursing home/ rehab facility if the patient had not been admitted for at least 3 days I think. Anyway, keep track of it and push for full admittance. The treatment may be the same, but the patient’s rights are different if he is not admitted as a hospital INPATIENT. I think more people have to complain about thie practice, which is in fact a way to shift costs from Medicare to supplemental insurance and/ or the families.


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