Commentary: Medicare’s ‘observation’ status a financial black hole

MedicareThe following article offers insight into problems that many who depend on Medicare may face. It is crucial to understand how complex Medicare can be, and situations that can leave you with no coverage. At Advocare, we work with South Florida families every day to navigate through Medicare to understand what is covered and when. Thanks for visiting. 

Commentary: Medicare’s ‘observation’ status a financial black hole

By Nancy Day

A few months after my mother’s 95th birthday, she fell at her home and hit her head, requiring stitches and blood transfusions. She has not been the same since.

She had to celebrate her 20th wedding anniversary with her husband, who recently died, at a rehabilitation center.

She needs 24/7 care and will never go home again.

Even though she is on Medicare, her care center stay is not covered. Why? Because the hospital declared her first night as “observation.” She was admitted at 2:25 a.m., thereby missing the “two midnights” requirement for Medicare to pay for the usual next step for seniors after discharge: rehabilitation. If a patient is admitted for that minimum, he or she is eligible for 100 days of skilled nursing care. Because my mother was not, we pay out-of-pocket.

What I initially thought was an individual dilemma is a nationwide problem, one under the radar until this mysterious status determination results in a rapid drain of family resources.

Many Medicare matters are complex, but this situation has a simple solution: a one-sentence bill with bipartisan support — the Improving Access to Medicare Coverage Act of 2013. More than 30 major organizations are in favor, including the American Medical Association and AARP.

According to the bill’s language, it would amend the Social Security Act “to count a period of receipt of outpatient observation services in a hospital toward satisfying the three-day inpatient hospital requirement for coverage of skilled nursing facility services under Medicare.”

At a July 30 hearing before the Senate Special Committee on Aging, Sen. Susan Collins, R-Maine, said in 2014 that Medicare beneficiaries had more than 600,000 observation stays that lasted three nights or more. Collins co-sponsored the Senate version of the bill, S 569.

“Many of these patients find themselves in a kind of twilight zone,” she said of those who are not officially admitted. “The financial consequences can be severe.”

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