Saturday, December 28, 2019

Medicare Part A and observation status

Andrew Taylor writes in the Los Angeles Times “I’m on Medicare and I still got a $25,000 hospital bill.” 

Taylor was diagnosed with prostate cancer and went to the hospital at his doctor’s direction for surgical treatment, a radical prostatectomy (complete removal of the organ). He spent two nights on a surgical ward before going home. 

He received a surprise bill for $25,000 from the hospital and another $4,700 from his surgeon.

Why? He was on Medicare Part A but not on Medicare Part B. Without telling him, the hospital had placed him on “observation status” despite the fact that he was there for a full surgical procedure. A patient on observation status is not regarded as “admitted,” and Part A covers only patients who have been admitted to a hospital. 

Taylor had no idea that this designation by the hospital would make such a major difference, even though he himself is a physician. Like many people, he knew that he had Medicare coverage for in-hospital treatment and he was being treated in a hospital. He assumed that something as major as a radical prostatectomy would be paid under that coverage. 

He recommends: 
“What can be done? If you are scheduled to be hospitalized for elective surgery, get a written statement from your surgeon and from the hospital that you will be admitted and not placed under observation status.” 
This is also a recurring problem for patients who require a rehabilitative stay in a nursing home after in-hospital treatment. Medicare will typically pay for such nursing home care, but only if the patient has been admitted for three days, under the "two midnight" rule. If the hospital has classified the procedure as outpatient or the patient as an observation patient, Medicare coverage for that needed postoperative care will not be provided. 

In general, before undergoing any planned medical treatment, consult with your physician to ensure that problems like this will not arise. The regulations adopted by CMS in November 2015, and the CMS publications on the two-midnight rule, reflect that CMS consistently emphasizes the physician's medical judgment (not that of his or her billing people) on the question of whether the care that is needed for the planned treatment is expected to require a hospital stay that will span three days / two midnights and thus be eligible for Medicare coverage. In addition, CMS has developed a list of inpatient only procedures (over 150 pages) which identifies the surgeries that will automatically be paid under Part A. 

For ER visits, emergency services by themselves are, in general, covered only under Medicare Part B, but sometimes the condition that gives rise to the emergency requires inpatient care, and the same situation can arise. 

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