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.