Health: New Medicare rules could lead to a shock

As a notice from Eastern Long Island Hospital explained, patients could find themselves staying on an inpatient floor, sharing a room with an inpatient, and even receiving the same care as an inpatient – but still be considered an outpatient by Medicare. This can make them responsible for unexpected expenses.

A Medicare enrolled patient who has been admitted to a hospital is considered an inpatient, and would be covered under Medicare Part A, explained Maureen Ruga, director of quality management at Peconic Bay Medical Center. But a hospital patient can also be placed on “observation status,” making that person an outpatient  – in which case they would be covered under Medicare Part B, she said.

Part B holds beneficiaries responsible for deductibles for some testing and medication, according to the Centers for Medicare & Medicaid Services.

Effective Oct. 1, new Medicare & Medicaid Services rules make time the determining factor of whether a Medicare patient should be officially admitted to the hospital or not. Under those rules, if a physician expects a patient will require hospitalization for at least two overnight days, or two “midnights,” they should meet qualifications for admittance to the hospital.

If not, the patient will be placed on observation status.

“Patients should always ask if they are being admitted into the hospital as an inpatient. That is number one,” Ms. Ruga said. “If they are being treated on observation status, they should check with their physician each day to see if their status has changed.”

On Oct. 22., Gov. Andrew Cuomo signed a new law requiring state hospitals to provide Medicare beneficiaries with both oral and written notice within 24 hours if they are placed under observation during their hospital stay. Under the state law, the hospital must also explain how the status will affect the patient’s health insurance coverage – and give them the right to appeal the observation status.

The Medicare & Medicaid Services rules have been criticized by health care advocacy groups, including the StateWide Senior Action Council, because, Ms. Ruga said, Medicare “isn’t using diagnosis or care as the criteria for coverage, they are using a time frame.”

She said the quality of care patients receive should not be affected by Medicare billing.

Understanding one’s status during a hospital stay becomes especially important for patients who might need subsequent care at a skilled nursing facility, said Eric Hausman, Medicare consultant for the state Department for the Aging. According to the new rules, Medicare patients must spend at least three consecutive days as a hospital inpatient in order to qualify for Part A coverage for subsequent care at a skilled nursing facility.

Got a health question or column idea? Email Carrie Miller at [email protected]. Follow her on twitter @carriemiller01.