Medicare and Medicaid

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“‘Observation status’ can be a tricky issue for Medicare recipients”
(Pittsburgh Post-gazette — August 29, 2022)
Generally, when a Medicare patient enters a  hospital, it’s often through the emergency department, with the patient in some degree of distress.
Then, a physician has to determine whether or not to discharge the patient from the emergency department, admit that individual as an inpatient or put them in “observation status” [outpatient status] without being formally admitted to the hospital.

It’s not just semantics as to the patient’s status.  There can be serious financial implications for the patient who is considered under the “observation status” rubric.

[Even though the patient on observation may be in the same room as one who is admitted as an in-patient, and even though both are having physical and mental assessments, feedings, drug administration, etc. there can be a huge and very expensive difference.  The patient who is on observation status may have to pay out-of- pocket costs that one on in-patient status may not.]

“By Law, Hospitals Now Must Tell Medicare Patients When Care Is ‘Observation’ Only”
(Kaiser Health News — March 13, 2017)
Under a new federal law, hospitals must now alert Medicare patients when they are getting observation care and why they were not admitted — even if they stay in the hospital a few nights.  For years, seniors often found out only when they got surprise bills for the services Medicare doesn’t cover for observation patients, including some drugs and expensive nursing home care.

“Do patients pay when they leave against medical advice?”
Patients who are leaving the hospital against medical advice are often told by hospital staff that doing so will leave them liable for the entire bill because insurance will not pay if they leave against medical advice.
As described in a study, that is a myth, a medical urban legend, and one which is widespread.

“Are You a Hospital Inpatient or Outpatient? If you have Medicare — Ask!”
Did you know that even if you stay in a hospital overnight, you might still be considered an “outpatient?”  Your hospital status affects how much you pay for hospital services and may also affect whether Medicare will cover care you get in a skilled nursing facility following your hospital stay.

“Coverage and costs if you stay in the hospital overnight”
(Center for Medicare Advocacy)
If you stay overnight in the hospital, your costs and coverage will depend on whether you have inpatient or outpatient status in the hospital.

“Providers back bill notifying Medicare patients about observation stays”
(Modern Healthcare — August 1, 2015)
Healthcare providers are expressing support for legislation overwhelmingly approved by Congress requiring hospitals to notify Medicare patients when they are receiving observation care but have not been admitted….  That’s because to qualify for skilled-nursing facility coverage, beneficiaries must first spend three consecutive midnights as an admitted patient in a hospital; observations days don’t count.

OBSERVATION STATUS — what does it mean?
If a Medicare patient is in the hospital, it is extremely important to find out whether the patient’s status is “inpatient” or “outpatient.”  That status affects how much the patient must pay for hospital services such as drugs, x-rays, etc. and will affect whether Medicare will pay for care in a skilled nursing facility after the hospital stay.

Information about observation status:
“FAQ: Hospital Observation Care Can Be Poorly Understood and Costly for Medicare Beneficiaries”
(Kaiser Health News)

“Observation Status: New Final Rules from CMS Do Not Help Medicare Beneficiaries”
(Center for Medicare Advocacy)

“Self Help Packet for Medicare ‘Observation Status'”
(Center for Medicare Advocacy)

“Observation stays don’t count for Medicare coverage, many seniors harshly learn”
(Pittsburgh Tribune-Review)

“Medicare proposes limits on hospital observation stays”
(American Medical News)


“The Scarlet Zero: MACRA Completes Government Takeover of Medicine”
(Caffeinated Thoughts — November 2, 2017)
MACRA [Meaningful Use Electronic Health Records — now called Advancing Care Information (ACI)] rules mandate that government have full, unblocked access to patients’ records, without their permission…. This data will be sold by government to entities the federal government itself chooses.

i”How the Medicaid Debate Affects Long-Term Care Insurance Decisions”
(New York Times — July 14, 2017)
Susan Flanders, a retired Episcopal priest who watched her father die slowly while in the throes of Alzheimer’s, believes that the aid-in-dying movement will eventually catch up to the desire of many people to make plans in advance to end their lives, should their minds permanently falter in a severe fashion.
She’s also utterly unafraid to mix money into the conversation…”It’s hundreds of dollars each day that could go towards their grandchildren’s education or care for people who could get well…”. How soon will the federal and state governments come around….

Elderly Hospital Patients Arrive Sick, Often Leave Disabled
(Kaiser Health News- August 9, 2016)
Hospital staff often fail to feed older patients properly, get them out of bed enough or control their pain adequately.

“Automatic sign-ups for Medicare Advantage coverage surprise seniors”
(Pittsburgh Tribune-Review — August 1, 2016)
Only days after Judy Hanttula came home from the hospital after surgery in November, her doctor’s office called with bad news: Records showed that instead of traditional Medicare, she had a private Medicare Advantage plan, and her doctor and hospital were not in its network.  Neither the plan nor Medicare now would cover her medical costs.

“RNs and CNAs Work Fewer Hours in Nursing Facilities that Serve Predominately Ethnic and Racial Minorities”
(Center for Medicare Advocacy — January 27, 2016)
A December 2015 Health Affairs study of freestanding Skilled Nursing Facilities (SNFs) found that registered nurses (RNs) were less likely to work at nursing homes with high concentrations of racial and ethnic minorities….Racial and ethnic minority nursing home residents have not been receiving the same quality of skilled care as white patients and the consequences of this disparity have been significant.

“Medicare reconsiders rule that leaves dying patients facing a stark choice”
(Washington Post — August 24, 2015)
For more than 30 years, Medicare presented dying patients with a stark choice:  They could continue treatments that might extend their lives or they could accept the medical and counseling services of hospice care meant to ease their way to death.  They could not do both.
Now, the federal government is experimenting with a change that would remove that either/or proposition.

“Providers back bill notifying Medicare patients about observation stays”
(Modern Healthcare — August 1, 2015)
Healthcare providers are expressing support for legislation overwhelmingly approved by Congress requiring hospitals to notify Medicare patients when they are receiving observation care but have not been admitted….  That’s because to qualify for skilled-nursing facility coverage, beneficiaries must first spend three consecutive midnights as an admitted patient in a hospital; observations days don’t count.

“Medicare’s midlife crisis: Catastrophic finances pit doctors against patients”
(Washington Examiner — July 20, 2015)
ACO’s [Accountable Care Organizations put doctors in charge of both the treatment and payment of healthcare.  It puts the doctor and patient in conflict with each other, especially sicker patients.  The more sicker patients, the harder it is to achieve savings.”

“Medicare Plans to Pay Doctors for Counseling on End of Life”
(New York Times — July 8, 2015)
Medicare, the federal program that insures 55 million older and disabled Americans, announced plans on Wednesday to reimburse doctors for conversations with patients about whether and how they would want to be kept alive if they became too sick to speak for themselves.

“To Collect Debts, Nursing Homes Are Seizing Control Over Patients”
(New York Times — January 25, 2015)
…In a random anonymized sample of 700 guardianship cases in Manhattan over a decade, Hunter College researchers found more than 12 percent were brought by nursing homes…[L]awyers and others versed in the guardianship process agree that nursing homes primarily use such petitions as a means of bill collection…. Guardianship transfers a person’s legal rights to make some or all decisions to someone appointed by the court…Legally, it can supplant a power of attorney and a health care proxy.

“Coverage for End-of-Life Talks Gaining Ground”
(New York Times — August 30, 2014)
Five years after it exploded into a political conflagration over “death panels,” the issue of paying doctors to talk to patients about end-of-life care is making a comeback, and such sessions may be covered for the 60 million Americans on medicare as early as next year.

“1 in 5 Elderly U.S. Patients Injured by Medical Care”
(HealthDay — May 27, 2014)
Nearly one in five Medicare patients are victims of medical injuries that often aren’t related to their underlying disease or condition, according to new research.

“From Eugene to Eugenics: Oregon’s new cost-cutting strategy is o deny care to cancer patients”
(Source: Statesman-Journal — November 6, 2013)
Oregon’s new Medicaid guidelines take treatment decisions out of the hands of doctors and patients and put them in the hands of distant state bureaucrats willing to cut costs no matter the human toll.  It’s the practice of cost-centric controls over patient-centric care.
More on Oregon

“Stop a Violation of Health Care Reform In Oregon”
(Huffington Post — September 27, 2013)
In August, Oregon’s Health Evidence Review Commission (HERC) voted to approve Revised Guideline 12, Cancer Care Near the End of Life. As a result, starting October 1, patients on Medicaid will not receive life-saving cancer medications if they have certain HERC-determined symptoms…. Furthermore, the Guideline will take clinical decision making out of the hands of doctors and deprive patients their best chance of fighting cancer.
More on Oregon

“Observation stays don’t count for Medicare coverage, many seniors harshly learn”
(Pittsburgh Tribune-Review — August 24, 2013)
Betty Rickett was surprised by a $15,000 nursing home bill after spending three days in a hospital for a broken ankle in 2009.
What she didn’t know was that time spent in a hospital bed under observation doesn’t count toward the three-day minimum needed for Medicare coverage — and being under observation does not count.

“Medicare proposes limits on hospital observation stays”
(American Medical News — May 13, 2013)
The Centers for Medicare & Medicaid Services proposed a hospital admissions definition change in its annual rule for inpatient payments…Medicare patients face greater cost-sharing responsibilities when they stay for days — and sometimes for weeks — in a hospital under observation status instead of being admitted…. “For patients, reclassification as ‘observation’ rather than admitted can result in unanticipated costs and co-payments,” the AMA stated in an Aug. 31 letter to CMS,

“UMass Memorial Tests Software to Curb Hospital Readmissions”
(Wall Street Journal — December 3, 2012)
Until Oct.1 this year, the Centers for Medicare and Medicaid (CMS) paid hospitals a flat rate when a patient was admitted with a heart attack, heart failure or pneumonia….Now, the Hospital Readmissions Reduction Program, a section of the Patient Protection and Affordable Care Ac, has begun penalizing hospitals if their 30-day readmission rates for patients exceed national averages.

“Decisions doctors must make to avoid Medicare penalties”
(American Medical News — November 12, 2012)
2013 will be a crucial year for physicians to avoid possible pay reductions under quality reporting and health information technology programs. A physician’s decision not to report Medicare quality measures or participate in paperless prescribing and health record programs in 2013 will be a costly one in the long run.

“If Medicare Tells You ‘No'”
(Wall Street Journal — October 18, 2012)
There are several things Medicare beneficiaries can do to reduce their costs….[O]ne that most beneficiaries don’t pursue  is appealing denied medical claims.  While the appeals process can be complicated and time-consuming, those who press their cases enjoy relatively high success rates.

“Beyond Obamacare”
(New York Times — September 16, 2012)
We need death panels.  Well, maybe not death panels, exactly, but unless we start allocating health care resources more prudently — rationing by its proper name — the exploding cost of Medicare will swamp the federal budget.

“Medicare: Inpatient or Outpatient”
(AARP — August 24, 2012)
Staying in the hospital without being formally admitted can cost you thousands of dollars. Under the rules, Medicare picks up the whole tab for the first 20 days of skilled nursing for rehab or other care in an approved facility, but only if someone has spent at least three full days in the hospital as an admitted patient. If, instead, a patient has been under observation — for all or part of that time — he or she is responsible for the entire cost of rehab.

“Rationing Health Care More Fairly”
(New York Times — August 21, 2012)
Older adults are understandably anxious about the future financing of Medicare….Putting a value on life, as it were, is controversial. The National Institute in Britain has denied or limited coverage of expensive drugs for ailments like pancreatic cancer, macular degeneration and Alzheimer’s. But in a world of limited budgets, such decisions must be made.

“To Save Money, Save the Health Care Act”
(New York Times — November 3, 2010)
Perhaps most important, the legislation creates an Independent Payment Advisory Board [IPAB], a panel of independent medical experts who will look for more ways to improve Medicare’s cast-effectiveness. Under the law, any policy that the board issues takes effect unless legislation to block it is passed by Congress and signed by the president. This way, inertia works in favor of cost containment rather than against it.