This question was sent in by J.R., in response to my article about observation status in the March 2016 Golden Gazette. See also our recent blog posting on this topic: https://www.farrlawfirm.com/medicare/is-it-the-end-for-observation-status
Q. My 89-year old mother (in PA) recently fell injuring her hip and was taken to a local hospital. After being assessed by her doctor, she was told that no surgery was necessary, but that she would be in the hospital for a few days, and then would go to rehab.
Unbeknownst to the doctor and my brother who was visiting her, she was never actually admitted to the hospital, but was in observation status, even though her wristband had the word “admitted” clearly printed on it.
After 3 days, she was told that she was discharged and to go home. My brother and the doctor were completely unaware that she was leaving, and were both upset about the lack of information.
Ultimately, she was out several thousand dollars, because she had to pay for the rehab, as it wasn’t covered by Medicare because she wasn’t actually admitted as an inpatient for at least three days. When asked, the case manager said that just because it says “admitted” on the hospital bracelet, doesn’t mean that she WAS admitted as an inpatient.
Is this standard practice – a wrist bracelet that says “admitted,” when you’re not actually admitted? Why aren’t they required to print, “in observation” or something like that on the bracelet? Or are they?
In the end, she is doing well at home, but is now out a sizeable amount of money for her stay in rehab.
Thanks again for your article and your time.
A. I’m sorry to hear about your family’s experience. Unfortunately, I have heard from many families in similar situations that although you may be in a hospital gown with an ID bracelet, receiving hospital care, and potentially spending a night or two under observation, you still may not be considered an inpatient.
Why? Even though the doctors and nurses are the ones who fill out the charts and provide you with a bracelet, the decision about whether to officially “admit” you is out of the attending health care worker’s control. Ultimately, whatever the nurse or doctor writes down on a patient’s chart has to go past a review committee, which usually uses “clinical-decision support” software to make these decisions. And, hospitals are allowed to place patients in observation at any time during their hospital stay — even retroactively.
The practice “doesn’t make any sense” because people only go into the hospital when they’re sick, Judith Stein, Executive Director of the Center of Medicare Advocacy, says. “They [go] either on orders of a doctor or because, having arrived at the emergency department, they were told they should stay.” And yet, she adds, “those who ended up in the nursing home with no payment were not aware — and neither were their families — that they were in observation status until they were discharged from the hospital. And then they were informed.”
The Requirement to be Informed
Hospital staff are required to inform patients of their status before they leave the hospital.
In August 2015, President Obama signed a bill into a law that requires hospitals to notify Medicare beneficiaries when they have been put under observation status, rather than being admitted to the hospital.
The Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act requires hospitals to notify beneficiaries receiving observation services for more than 24 hours of their status as an outpatient under observation. Under the NOTICE Act, the notification from the hospital must:
- Explain the individual’s status as an outpatient and not as an inpatient and the reasons why;
- Explain the implications of that status on services furnished (including those furnished as an inpatient), in particular the implications for cost-sharing requirements and subsequent coverage eligibility for services furnished by a skilled nursing facility;
- Include appropriate additional information;
- Be written and formatted using plain language and made available in appropriate languages; and
- Be signed by the individual or a person acting on the individual’s behalf (representative) to acknowledge receipt of the notification, or if the individual or representative refuses to sign, the written notification is signed by the hospital staff who presented it.
The NOTICE Act is not yet in affect, but several states have their own laws requiring hospitals to inform patients about their status.
Although the federal law won’t go into effect until next summer, a handful of states have already written laws of their own requiring hospitals to notify patients of their status. In J.R.’s situation in our question, his mother should have been given notice of her status, since several states including Pennsylvania, Virginia, Maryland, New York, and Connecticut already required to inform patients about their observation care status.
Appealing the decision
In this case, J.R.’s mother did not want to go through the headache of appealing the decision. However, if you are kept in observation status and transferred to a nursing home and denied coverage by Medicare, the initial steps of the appeals process are pretty simple. In order to appeal, you must wait for your Medicare Summary Notice (MSN) to arrive. Copy the notice and highlight the disputed charges. The notice should provide information on where to send it to request an appeal. You can appeal both the hospital’s denial of hospital admission as well as subsequent the nursing home charges. For more information about the Medicare appeals process, click here.
What to do in the future
In the future, if you or a loved one are in the hospital for any length of time, ask hospital personnel what your status is. Keep asking because it can be changed from day to day. If you are told you are in the hospital under observation status, you can ask the hospital doctor to be admitted as an inpatient and explain the medical reasons that you need to be admitted. This will not guarantee anything, but it can’t hurt.
If, after discharge, you need rehab or other kinds of continuing care but learn that Medicare won’t cover your stay in a skilled nursing facility, ask your doctor whether you qualify for similar care at home through Medicare’s home health care benefit, or for Medicare-covered care in a rehabilitation hospital.
Medicaid Planning in Virginia and other States.
What if your mother needs long-term nursing home care (which costs $10,000 – $14,000 a month in the Metro DC area)? To protect her hard-earned assets from these catastrophic costs, the best time to create her own long-term care strategy is NOW. Generally, the earlier someone plans for long-term care needs, the better. But it is never too late to begin the process of Long-term Care Planning, also called Lifecare Planning and Medicaid Asset Protection Planning.
If you have a family member nearing the need for long-term care in Virginia, Maryland, or DC or already getting long-term care, or if you have not done Long-Term Care Planning, please call us as soon as possible to make an appointment for an initial consultation:
Fairfax Elder Law: 703-691-1888
Fredericksburg Elder Law: 540-479-1435
Rockville Elder Law: 301-519-8041
DC Elder Law: 202-587-2797
About Evan H Farr, CELA, CAP
