NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

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rupalb9
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NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by rupalb9 » Wed Sep 06, 2017 1:00 pm

Under ‘Observation,’ Some Hospital Patients Face Big Bills
https://nyti.ms/2wXOEFK
A quick primer on a confusing situation: Medicare Part A covers hospital care for inpatients. Outpatients, including those on observation status, are covered under Part B. That distinction has generated complaints and controversy for years, as the number of inpatient hospitalizations has declined among Medicare recipients and outpatient stays have become more common.

Why does the classification matter? Outpatients can face higher payments for drugs and coinsurance, but the big-ticket item is nursing home care.

After a hospital discharge, Medicare pays the full cost of skilled nursing for the first 20 days, and most costs up to 100 days — but only for patients who’ve spent three consecutive days as inpatients. Without three inpatient days, patients are on their own.
From my local paper:
Basically there is a huge cost savings to Medicare, as well as to the hospital to place you "under observation" when you arrive. Medicare gets away with not having to pay for your skilled nursing stay. The hospital avoids hefty penalties in the event that you need to come back to their hospital if something goes wrong after the surgery ie. an infection where they did the surgery. If they had originally "admitted" you then having you come back would be a second admittance for the same original problem. That triggers the penalty. Placing you originally "under observation" avoids that second admittance penalty trigger.
...
One thing the article doesn't discuss if how you might be able to challenge and change that original classification when it is first made when you arrive at the hospital. A few years ago listening to a director of nursing give a talk at her skilled nursing facility, I recall that she said first off to make it clear at admittance that you want to be formally admitted to the hospital. If they push back on that then contact your primary care doctor and ask him/her to advocate for you.

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by nisiprius » Wed Sep 06, 2017 4:32 pm

Any thoughts on what, as a practical matter, you should do if you're a patient in this situation?
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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by VictoriaF » Wed Sep 06, 2017 4:44 pm

nisiprius wrote:
Wed Sep 06, 2017 4:32 pm
Any thoughts on what, as a practical matter, you should do if you're a patient in this situation?
The last sentences in the OP are
make it clear at admittance that you want to be formally admitted to the hospital. If they push back on that then contact your primary care doctor and ask him/her to advocate for you.
Does this answer your question or you are asking about something else?

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by Pajamas » Wed Sep 06, 2017 4:52 pm

I have also seen brief admissions reclassified as observation after the fact because the patients didn't meet the insurance company's standards for admission, so it could be a problem even if you insist on being admitted instead of being held for observation. Not much you can do about that except appeal it.

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by jogren » Wed Sep 06, 2017 5:27 pm

Any thoughts on what, as a practical matter, you should do if you're a patient in this situation?

As to to nisiprius' question about practical solutions to this problem, I would suggest that if you find yourself in a hospital bed you ask to speak to a "Care Coordinator" or "Social Worker" (or ask a family member to advocate for you if you are too sick to fight the battle) and ask them to specifically look at your diagnosis and status so that you are aware of what it is and be sure that your physician has listed all of your current medical issues and all of your chronic ones too in your chart. Unfortunately physicians have very little if any say in the matter. It's really based on objective criteria. Often once the entire medical condition has been appropriately and completely documented, inpatient status is often deemed to be appropriate.

Jason

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by btenny » Wed Sep 06, 2017 5:47 pm

I am not sure there is anything you can do about this stuff. The hospitals and insurance companies and Medicare go round and round and do what is in each groups best interest. We are just pawns and are obliged to pay the bills that result. Same for the "procedures" they charge us for and the prices they charge. We have no control on what they do and no say so in what they charge except not go in the first place. Once we enter the door we are almost helpless and they do as they please.

I know that my FIL got put under outpatient status 3-5 times when he was taken to the hospital for emergency issues. Only once did they finally admit him for a few days. The other four times he was "observed" for 2 days or so and sent home after some "outpatient care". I do not think he was ever sent to a non hospital skilled nursing facility as he always had someone at home to watch over his after one of these events or some surgery. So when he left the hospital he went home. And yes he was also operated on a few times as a inpatient but those were scheduled in advance and he was fully admitted. But in all those cases he never was sent to a "a skilled nursing facility" as he always had someone at home to watch over him after one of these events.

In his case he was always mobile and could walk out (very slowly for sure) and live on his own right to the end of his life. So I understand the no nursing stuff. But I am sure many other patients are not as mobile and need some sort of nursing home recovery period. So I guess they get charged a ton for those first few days. Not good...

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by Artsdoctor » Wed Sep 06, 2017 5:50 pm

nisiprius wrote:
Wed Sep 06, 2017 4:32 pm
Any thoughts on what, as a practical matter, you should do if you're a patient in this situation?
You can discuss this with your admitting physician; he/she should be able to tell you if you're being admitted for observation or as an in-patient. I say "should" because most physicians admitting patients regularly know the terminology necessary; if your physician isn't familiar with the process, it may not be so easy.

In 2013, Medicare instituted a "Two-Midnight Rule." Medicare will assume hospital admissions are reasonable and necessary if you're staying through two midnights. The rules are somewhat complex as to when the clock starts ticking (for example, time in the ER may not count), although the admitting physician can ultimately document why he/she expects the admission to be for more than two midnights.

This matter has become important enough that our institution has a checklist to ascertain status and the patient is made aware from the beginning. But it's the physician, not the case manager, who ultimately decides the status. If the case manager feels that something is off, the physician can be notified and the records can be further expanded to explain the status.

If you're told that you're being admitted under Observation Status and it becomes clear the your stay has become more complex/you'll be staying longer, you or your advocate can ask if this will influence your admission status; it usually will, and the documentation is easy to justify. However, there's no harm in bringing it up to your admitting physician.

In many hospitals, a hospitalist will be the admitting physician and will be extremely familiar with all of this. If your private physician is admitting you and does not do this all that much, documentation problems can become a problem.

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by giacomo_bogle » Wed Sep 06, 2017 7:16 pm

Sorry to hear your about your situation.
CMS has "clear" rules - for you to be classified as "Inpatient" - you either need to satisfy criteria in a "certain 2000+ page book" or your doctor needs to "certify" that you need "more than 2 midnights" of "medically necessarily in-hospital stay". Each of these terms has a certain meaning and you or your "doctor" / "PCP"/ "hospitalist" is not at "liberty" to define these terms - Hint medical necessity is not universally agreed upon and hence will never be taught in medical schools / residencies. Additionally you need to have 3 midnights of "Medically necessary" hospital stay before CMS will cover your stay at rehab.
If you are unable to get the navigation of this maze correct - CMS can charge your Doctor and the hospital for fraud and advertise it on prime TV. Guess how many dollars are spent by health systems to "get this right" and who pays for this?
End result - chaos and lots of it.

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by LadyGeek » Wed Sep 06, 2017 8:08 pm

This thread is now in the Personal Finance (Not Investing) forum (insurance). To keep this actionable, please focus on your own situation.

iacomo_bogle, Welcome!
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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by student » Wed Sep 06, 2017 8:49 pm

This thread has good info.

viewtopic.php?f=2&t=211901

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by ram » Wed Sep 06, 2017 10:06 pm

nisiprius wrote:
Wed Sep 06, 2017 4:32 pm
Any thoughts on what, as a practical matter, you should do if you're a patient in this situation?
Nisiprius,
I think that the answer is 'nothing'.
Two parties much more knowledgeable than the average patient are already slugging it out.
The hospital system typically will want to get the "admitted status" as it pays more.
The insurance company would want the "observation" status as they have to pay less.
The insurance company (including medicare) has written the definition of 'admission'. The hospital has signed a contract to accept the definition. Agreeing to it is likely the only way that they are going to be on the 'in network' list for that insurance.

The issue then for the hospital is to point out to the insurance company that the patient does not satisfy page 102, clause III, subclause h (iii) of the definition of outpatient and so should be reimbursed as an inpatient. The hospital has far better resources than the average patient to argue this.

I work more on the clinic side than on the hospital side. So somebody working more in the hospital side may have more details.

Regarding my own practice I do 'consults' on patients in the hospital. I start out using the 'old fashioned' definition of admission as a patient lying on a hospital bed. I bill the consult as an 'inpatient consult' (higher rate). 2 weeks later I get an email from the billers stating "the patient's status was deemed to be 'observation status' and your billing has been changed to reflect it". I have learned that it is not worth my time and effort to challenge this change.
Ram

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by spammagnet » Wed Sep 06, 2017 11:50 pm

ram wrote:
Wed Sep 06, 2017 10:06 pm
nisiprius wrote:
Wed Sep 06, 2017 4:32 pm
Any thoughts on what, as a practical matter, you should do if you're a patient in this situation?
Nisiprius,
I think that the answer is 'nothing'. ...
Other than maybe inquiring as to your status so you understand the implications for the bill, this is correct. Unless you choose to pay cash, you accept the terms of the insurer. They write the criteria for what qualifies as observation, or not. The hospital complies or risks losing reimbursement or, worse, reimbursing millions of dollars based on compliance audit findings, risking federal criminal charges for non-compliant billing, and risking loss of all future Medicare business.

These lower payments are characterized by legislators as "cost savings".

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by jambadoc » Thu Sep 07, 2017 2:41 am

I can't speak for the country, but around our neck of the woods, many undifferentiated complaints are admitted under observation status. This is all in generalities, of course, and does not constitute medical advice. Just for understanding purposes, however, probably the best example is "chest pain." Generally speaking if one comes to the hospital with chest pain and there are not immediate signs of a heart attack (or other indication for inpatient admission), that person would likely be admitted under observation status. Based on the results of their work-up (labs, stress test, etc.- differs per individual situation) the person might be converted to an "inpatient stay." Unfortunately, there's no real way to tell who will or who won't have a positive work-up (and hence a bad problem) and need to be converted.

Personally, I hate this conversation because as an ER physician I have essentially no say in admission status (to be honest, in my experience the decision is largely taken out of doctors hands and is protocolized based on complaint). I would second the advice that there's not really a lot one as a patient or often even your doctor may be able to do about it. Doctors and hospitals are penalized (or even charged with fraud) for admitting patients under inpatient status that don't meet criteria.

Edit: I just had time to read the article. The particular example mention seems bizarre to me. I have no idea why the patient would be admitted for over a month under "outpatient status." That seems more like a fluke/paperwork screw up than an actual issue.

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by SGM » Thu Sep 07, 2017 3:01 am

Having been a physician I am fully aware of these issues. I recently took an elderly relative to the ER three times in the last two weeks. The last ER visit resulted in a week long stay and I was assured that the relative met all the qualifications for admission. I check with the hospitalist daily on whether he can be released to rehab or has to continue his stay in the hospital. He was admitted while still in the ER. I agree that there isn't anything you can do about the classification of observation or admission. However, I would always ask the question of whether this is an admission or observation. The location of the bed doesn't matter and yes it can be reviewed and overturned.

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by mmcmonster » Thu Sep 07, 2017 5:07 am

nisiprius wrote:
Wed Sep 06, 2017 4:32 pm
Any thoughts on what, as a practical matter, you should do if you're a patient in this situation?
I'm a physician who is 50% hospital based (the other 50% office based).

Hospitals hate observation patients. The reimbursement on observation patients is pitiful to a hospital. The hospital I work at had to do severe cost cutting across the board to even break even on observation patients. The hospital is strongly incentivized to make any particular patient admitted.

The barrier is the insurances. They will not pay for a hospital admission for anything that they feel can be treated on an outpatient basis. Hence 'observation' status. Technically these are outpatients that are being 'observed' in an outpatient-like setting rather than actually being in a hospital.

Of course, everyone knows that's not the case. But the insurance companies hold all the cards. If they won't pay for an admission, there's no one for the hospital to complain to except the patient. And the patient doesn't have any power.

I've had countless patients plead with me to get admitted so that they wouldn't go bankrupt from medical bills. The criteria for admission are so strict that many of these patients leave AMA (against medical advice) rather than be placed on observation. Quite a few come back when they are sicker and then do get admitted.

This situation has to change, but I'm not seeing a good solution. :?

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by pshonore » Thu Sep 07, 2017 7:27 am

mmcmonster wrote:
Thu Sep 07, 2017 5:07 am

Of course, everyone knows that's not the case. But the insurance companies hold all the cards. If they won't pay for an admission, there's no one for the hospital to complain to except the patient. And the patient doesn't have any power.


This situation has to change, but I'm not seeing a good solution. :?
I don't understand this - aren't we talking Medicare Part A for the major portion of these expeditures? Thats Uncle Sam, not an insurance company.

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by giacomo_bogle » Thu Sep 07, 2017 7:26 pm

spammagnet wrote:
Wed Sep 06, 2017 11:50 pm
ram wrote:
Wed Sep 06, 2017 10:06 pm
nisiprius wrote:
Wed Sep 06, 2017 4:32 pm
Any thoughts on what, as a practical matter, you should do if you're a patient in this situation?
Nisiprius,
I think that the answer is 'nothing'. ...
Other than maybe inquiring as to your status so you understand the implications for the bill, this is correct. Unless you choose to pay cash, you accept the terms of the insurer. They write the criteria for what qualifies as observation, or not. The hospital complies or risks losing reimbursement or, worse, reimbursing millions of dollars based on compliance audit findings, risking federal criminal charges for non-compliant billing, and risking loss of all future Medicare business.

These lower payments are characterized by legislators as "cost savings".
:sharebeer

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by giacomo_bogle » Thu Sep 07, 2017 8:20 pm

mmcmonster wrote:
Thu Sep 07, 2017 5:07 am
nisiprius wrote:
Wed Sep 06, 2017 4:32 pm
Any thoughts on what, as a practical matter, you should do if you're a patient in this situation?
I'm a physician who is 50% hospital based (the other 50% office based).

Hospitals hate observation patients. The reimbursement on observation patients is pitiful to a hospital. The hospital I work at had to do severe cost cutting across the board to even break even on observation patients. The hospital is strongly incentivized to make any particular patient admitted.

The barrier is the insurances. They will not pay for a hospital admission for anything that they feel can be treated on an outpatient basis. Hence 'observation' status. Technically these are outpatients that are being 'observed' in an outpatient-like setting rather than actually being in a hospital.

Of course, everyone knows that's not the case. But the insurance companies hold all the cards. If they won't pay for an admission, there's no one for the hospital to complain to except the patient. And the patient doesn't have any power.

I've had countless patients plead with me to get admitted so that they wouldn't go bankrupt from medical bills. The criteria for admission are so strict that many of these patients leave AMA (against medical advice) rather than be placed on observation. Quite a few come back when they are sicker and then do get admitted.

This situation has to change, but I'm not seeing a good solution. :?
All true though it appears that OBS units seem to be more profitable to the hospitals - how does that work?

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by spammagnet » Thu Sep 07, 2017 8:29 pm

giacomo_bogle wrote:
Thu Sep 07, 2017 7:26 pm
spammagnet wrote:
Wed Sep 06, 2017 11:50 pm
ram wrote:
Wed Sep 06, 2017 10:06 pm
nisiprius wrote:
Wed Sep 06, 2017 4:32 pm
Any thoughts on what, as a practical matter, you should do if you're a patient in this situation?
Nisiprius,
I think that the answer is 'nothing'. ...
Other than maybe inquiring as to your status so you understand the implications for the bill, this is correct. Unless you choose to pay cash, you accept the terms of the insurer. They write the criteria for what qualifies as observation, or not. The hospital complies or risks losing reimbursement or, worse, reimbursing millions of dollars based on compliance audit findings, risking federal criminal charges for non-compliant billing, and risking loss of all future Medicare business.

These lower payments are characterized by legislators as "cost savings".
:sharebeer
I will say it has had a powerful effect on hospitals to reduce the cost of care. They do not have an incentive to discharge patients earlier than is warranted by their condition. If they do, and the patient is readmitted for the same problem, the next admission gets rolled into the previous one. By that time the patient is sicker, costs more, and the hospital doesn't get another dime.

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by 6miths » Thu Sep 07, 2017 8:35 pm

At the end of her book 'An American Sickness', Dr Elisabeth Rosenthal has a list of suggestions to help avoid some of the system gaming that is going on by hospitals, insurance companies, and doctors. This issue was one of the areas that she addressed and IIRC the advice was similar to that given above, be aware that this is an issue, ask for clarification as to what your status is, demand to be admitted if appropriate.
'It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so!' Mark Twain

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by staythecourse » Thu Sep 07, 2017 9:33 pm

All I can say is a little knowledge is a dangerous thing as Alexander Pope once said.

In this thread there has been ONE poster to even mention the "2 midnight rule". There is no point on having a meaningful dialogue about the situation without the proper understanding of what is "observation" vs. "admission". Without understanding what is "under the hood" all the discussion on this thread is just complaining with no real knowledge. Sort of like the folks who complain about the stock market by comparing it to a casino or gambling.

For those sincerely asking what they can do? It is every right of the patient to know what they are admitted as, i.e. obs, inpatient, etc... Do keep in mind, however, at any point that status can be changed based on the situation, i.e. they anticipated you being there for 2 days (2 midnights), but you got better and are now being d/c next day (1 midnight) which triggers being converted from full admission to observation at discharge. Best to keep asking by talking to case worker on your case through the whole process. As important as talking to the clinical folks taking care of you. Sad, but true.

Good luck.
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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by littlebird » Thu Sep 07, 2017 9:44 pm

I read this article, or one just like it several years ago. Since then, my spouse has bee held in our hospital "under observation" 3 times. Once, he was admitted; the other 2 times released without being admitted. Each time, I questioned the admitting clerk about the effects of this "under observation" status and each time I was told not to worry; Medicare would pay just as they normally do. And they did.

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by sport » Fri Sep 08, 2017 12:03 am

This can work the other way as well. A few years I went to the hospital emergency room with chest pains. I was admitted "under observation" and stayed in the hospital over one night. They ran all kinds of tests. My emergency room and doctor bill was about $19,000. The cost to me was a $50 copay on my Medicare Advantage Plan. If I had been admitted, my costs would have been a lot more.

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Re: NYT > Under ‘Observation,’ Some Hospital Patients Face Big Bills

Post by giacomo_bogle » Sat Sep 09, 2017 9:37 pm

LadyGeek wrote:
Wed Sep 06, 2017 8:08 pm
This thread is now in the Personal Finance (Not Investing) forum (insurance). To keep this actionable, please focus on your own situation.

iacomo_bogle, Welcome!
Thx boss!

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