A ‘Very Cruel’ Medicare Rule is Costing Seniors Dearly

from The Plain Dealer – by Stephen Koff –

WASHINGTON, DC – It’s bad enough to be hospitalized. But thousand of seniors across the country are finding their medical problems compounded with financial frustration and large bills because of a Medicare technicality that can cost them dearly.

The problem starts when their doctors want them to go to a skilled nursing facility as an interim, rehabilitative step between the hospital and home. That’s fairly typical when a patient needs to regain strength but no longer requires hospitalization.

But if the hospital has not classified the patient properly for Medicare billing purposes, then Medicare, the government health insurer for seniors, refuses to pay the skilled-nursing bill. Even a short stay costs the patient thousands of dollars.

For Marilyn “Micki” Gilbert, 83, an assisted-living resident at Menorah Park in Beachwood, the bills came to $17,000 after more than four weeks of skilled nursing care. Following a hospital stay of several nights last August after she fell and was hospitalized “with a head broken open and sutures,” as she put it, she expected Medicare to cover her rehabilitative care.

But Medicare administrators refused. The problem was that when the hospital sent the bill to the Centers for Medicare and Medicaid Services, or CMS, for payment, it said that Gilbert was in the hospital for “observation” rather than admitted in the “inpatient” category.

That difference, which is many cases is a technicality, means the difference of thousands of dollars for every patient affected.

“And believe me, at 83, where am I going to come up with that?” Gilbert asked. “I can’t tell you how bad it was. I have spoken with other people who have had this done. When you’re 83, you don’t have that kind of money.”

The problem is a result of Medicare rules that only authorize follow-up, skilled nursing care after a patient has had inpatient hospital care for at least three consecutive days. Even splitting that classification – say, as one day for observation and two for inpatient care – will not satisfy the three-day inpatient requirement, regardless of the fact that the patient stayed and was treated in a hospital the whole time.

The inspector general for the U.S. Department of Health and Human Services said last year that in 2012, Medicare beneficiaries had more than 600,000 hospital stays that lasted three or more nights but did not qualify for skilled-nursing facility payment. In a small share of those cases, 4 percent, Medicare mistakenly paid for skilled nursing care anyway, costing $225 million.

The distinction – observation versus inpatient — has financial consequences for hospitals as well. That may be part of the problem, say several members of Congress as well as authorities from such organizations as the American Health Care Association and Center for Medicare Advocacy. Hospitals have their own financial reasons for classifying some multi-day stays as observational.

One is that hospitals with billing mistakes can be subjected to intense CMS audits with deep financial consequences. Since 2010, CMS has used outside contractors to aggressively review admission records and seek repayment for improper admissions, according the office of U.S. Sen. Sherrod Brown, an Ohio Democrat who has repeatedly expressed displeasure for the way seniors are winding up with large medical bills.

For healthcare providers, it may be safer for many to simply classify a hospitalization as observational. That usually means they’ll get less money in reimbursement than if they coded the bill with inpatient fees, and the patients may get stuck with more out-of-pocket costs for care and prescription drugs. But for hospitals, it is better than getting hit with an audit and facing claw-back demands from CMS, health professionals say.

Hospitals may also do this to avoid Medicare penalties they can face if they have an excessive number of in-patient readmissions within 30 days of discharge.

Part of the Affordable Care Act, the Readmissions Reduction Program started in October 2012 and was supposed to result in better care the first time a patient is admitted. Excessive readmissions now can cost a hospital money, and many hospitals are reporting that their readmission rates are, in fact falling.

But one way to get around the risk of readmission penalties may be to avoid as much as possible the inpatient classification.

Asked about the rules and the financial consequence for seniors, CMS said it is following the law.

In the past, CMS has said it was concerned that too many patients were being admitted to hospitals improperly, getting inpatient services and costing CMS more money when they should have been observed for longer first.

CMS has offered somewhat broader guidelines as complaints build, but a growing number of Congress members say that hasn’t solved the problem.

Among those pushing to change these Catch-22 rules are Brown, the senator from Ohio, and Reps. Marcia Fudge of Warrensville Heights and Jim Renacci of Wadsworth. Fudge is a Democrat, Renacci a Republican.

Lawmakers have tried for several years to change the rules, but Rep. Joe Courtney, Democrat of Connecticut, noted on a call with reporters Tuesday that support this term has grown significantly, with 136 cosponsors to his bill. They include Fudge as well as Reps. Dave Joyce, Republican of Russell Township, and Marcy Kaptur, Democrat of Toledo. Renacci introduced a bill with a similar goal late last year and had 21 cosponsors.

Brown’s bill, the Senate counterpart to Courtney’s, has 25 cosponsors.

The American Medical Association, AARP and more than a dozen more organizations have gotten behind the bills. Courtney said Tuesday that the legislation could wind up in a different legislative vehicle tied to the rates that Congress authorizes CMS to pay hospitals. That kind of linkage could give the complaining lawmakers more leverage.

“Surely seniors should focus on their recovery,” Brown said. “Their families should focus on making their recovery as comfortable and as rapid as possible, instead of having to pay attention to billing technicalities and sky-high medical bills, or worse, trying to recover without the medical care that their doctors want them to have.”

Gilbert, the 83-year-old woman in Beachwood, summed it up during a telephone interview in more impassioned terms. She described calling CMS, to no avail, and asking a lawyer what she could do.

“Everybody said there was nothing they could do. It’s the law,” she said.

“It’s bad enough as you start getting older. My husband passed away about two years ago, and I can’t tell you the loss I felt.” She and Leonard had been married for 64 years.

Then she fell and was hospitalized. And “no one knew how to help.”

CMS may have its reasons. Micki Gilbert can only surmise them.

“I think it’s very cruel,” she said.

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6 years ago

No Alice B, not one Republican voted for Obamacare/ACA. It was passed ONLY by Democrats. (It wasn’t “signed” by anyone but Obama). Where did you get the idea that ANY Republican voted to pass it? DEMOCRATS OWN this law and DEMOCRATS alone. Republicans had absolutely no input into it from writing it to voting it into law.

6 years ago

It’s even worse. When my husband was hospitalized, after he collapsed, the doctors thought he had blood clots in his lungs or possibly had a stroke. They ran extensive tests and he was released after several days. Medicare declined the entire bill saying he was in for “observation”. they did not pay a dime. When I called the hospital to tell them they must have made a billing error as he was admitted they told me that Medicare has a person stationed at the hospital and they decide how to bill. The hospital has no say.

6 years ago

my problem with medicare is not paying for my husband ride in an ambulance from a nursing home because he was sitting in his wheelchair and the ambulance service told medicare he could have went some other way. well anyhow he had conjesive heart failure and could not be laying down. and he was admitted to the hospital to take fluid off. he couldn’t breath if he laid down.. he was in there for a week. now tell me that was not a emergency. in fact for a year he was in and out of hospital and nursing home. yes… Read more »

6 years ago

BJ, you really should not comment on things you know nothing about. If you think a flat tax puts people with a lower income at a disadvantage, please show us how. Since you are obviously a liberal Democrat, doesn’t a flat tax seem FAIR to you? The less you make, the less you pay. The more you make, the more you pay. Sounds FAIR to me.

6 years ago

If this issue isn’t “fixed” (bills passed to correct the law) BEFORE the election, don’t expect it to happen AFTER the election because the bills will again sit in Committee, forgotten. Someone will finally throw them into “file 13” aka “the trash”.

audrey D'Alessandro
6 years ago

The whole problem is the part of the rule that makes the hospitals keep patients in “observation” instead of inpatient. Again, unintended consequences of Obama care and “meaningful use” rules. There are just too many unintended consequences. I understand the gov’t wanting to keep hospitals’ accountable, but this is what happens when you make broad sweeping changes. Hospitals are not one size fits all. Depending on what communities they serve they may have more readmissions because they have more lower income or older adult communities around them. This is also what happens when drug companies write the laws that congress… Read more »

6 years ago

I don’t care if it’s Obama’s fault, or whose fault it is. Put your partisanship aside. We have to protect our senior citizens. Please let your congressional representative’s know that we need to amend:

“title XVIII (Medicare) of the Social Security Act to deem an individual receiving outpatient observation services in a hospital to be an inpatient with respect to satisfying the three-day inpatient hospital requirement in order to entitle the individual to Medicare coverage of any post-hospital extended care services in a skilled nursing facility (SNF)”.

6 years ago

It amazes me when some people blame big business for all the ills of this country. When the company I worked for was bought out by another company the new one told us up front that the “bottom line” was what was important. Whether the company you worked for told you up front that the bottom line was what was important or not, that IS the ultimate goal and that should have been a “given” to everyone. Yes there were some, especially in the financial sector who were dishonest but that doesn’t mean the business “sector” as a whole is.… Read more »

janet hartwell
6 years ago

I agree that more sho u ‘d be published about this situation that could happen to people and start embassy emailing to the house and Senate. It is such a disgrace to the older people who become sick as we all will at some time!

6 years ago

I just found out that Obama is going to take our guns away by ruling us as Mentally unbalanced or to put it in plain words crazy! This is not normal thinking or mentally sane to enforce his wishes upon a Free Nation under Constitutional Law that is Run, By The people, For the people and Of the people. This is a Nation under GOD! It is Protected by GOD! and his Children. I would say that accusations of threatening the people of America to find them Crazy in order to bring about a serious Crime of confiscating a Nation… Read more »

6 years ago

What does it take to bring this Nation to Action, let alone the World, that will STOP these Criminal minded thugs from trying to not only Pilfer but Highjack a whole Country or even the world? It goes on and on and hardly not a soul has the Eyes to see or the Ears to hear what is going on. The few that can, have tried to ignite a fire under you and I speak of every person on this planet that is concerned for not only your own well being but the well being of others! For GODS sake… Read more »

Patricia Lewis
6 years ago

Those bills will just not get paid. What do they expect from our seniors? Consequently it might jeopardize their home or anything if they cannot pay their hospital bills. Liberals be gone!!!

cheryn pate
6 years ago

I agree that lawmakers should abide by their own laws. they need to be voted OUT! The healthcare reform act specifically denies life saving measures for the elderly. are all these comments just venting or is anyone in power looking at them?

6 years ago

The best solution is to vote out the present Congress members, Vote out incumbents in November ,send a message to Washington, WE are tired of being screwed by people we elect, So you incumbents MUST GO !

6 years ago

Hospitals and intermediate care facilities have gouged the system for quite a while. It seems hard to get around their system, but you can. My wife recently was hospitalized and on a brand new medication the hospital didn’t hear of or stock. They had to allow me to bring in the prescription for her to take. This tells me you don’t have to be charged for medication at an enormous rate above what you pay the pharmacy for. If you receive a letter from a health organization in your community and has the letters ACO in it be very careful.… Read more »

6 years ago

I think the statement, ” not a single Republican voted for the ACA, it was voted in solely by Democrats” is misleading. It is true that the Republicans did not vote for it, but it is also true that they had a chance to stop it from being funded, thus essentially ending it. Twenty-five GOP senators voted in Sept. 2013 to give Reid cloture, which allowed a simple majority to restore funding for Obamacare. These 25 RINO’s voted with Harry Reid & the Democrats. Two GOP senators did not even bother to show up to vote, Flake(AZ) & Hatch(Utah) because… Read more »

6 years ago

Why doesn’t our wondrous President use that extraordinary Congress-avoiding pen of his to change this law unilaterally?

6 years ago

I think we should consider a constituional amendment where government gives certain amounts for certain races and that is all they get. They would not be allowed to take any money from groups or other individuals. A flat tax would get rid of the lobbyists. Those in Washington should not be making a killing of any kind as they represent the people. Make it a sacrifice to serve the people and and we might need a whole new Congress the day after it passes. As much as we believe in free speech, people should be allowed to speak about other… Read more »

Ivan Berry
6 years ago

This kind of thing is the reason we should not allow central planners to be involved in anything American. If we wanted central planning we would have chosen collectivists openly. That’s why they always appear in sheeps clothing although they are in fact wolves. We can keep trying to turn things around or just give up,but we should not rely on those who created this mess to fix it. I have no confidence in either establishment party to do anything constructive when it is apparent that they are set on destruction of this people. And who came up with the… Read more »

A R Detlefsen
6 years ago

I see people mention that you should question the coding done regarding Their experience at the hospital as well as at the Drs office. No doubt This is good. I have never seen the coding done when I was at the Drs office or hospital. I’m sure that same is true for most people. I have also never seen to opportunity to see the coding or understand what the various codes are or their application. I agree with what has been written…. Just how to ask and understand . I also think no politian should live being exempt from their… Read more »

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