Little-known hospital billing practice can negate Medicare coverage of later nursing-home stay

"Under rules implementing the Affordable Care Act, hospitals can be penalized if too many patients return for further treatment within 30 days of being discharged.
So, to avoid the penalty, a number of hospitals are admitting return patients under “observation status” to keep them out of the readmission statistics. Although patients get the same treatment, taxpayers save money because the hospitals generally get reimbursed at a lower “outpatient” rate for observation patients, the Wall Street Journal (sub. req.) reports.
However, the practice can prove costly for consumers. As outpatients, they may be required to cover a larger portion of the bill than they would be charged as inpatients. And, for those who need to spend time at a nursing home after being released from the hospital, Medicare won’t pay the bill. Under the program, individuals must be formally admitted to the hospital for three days prior to the nursing home stay for it to be covered by Medicare, and “observation” patients don’t meet that requirement."
More.

Originally posted in ABA Journal News by Martha Neil, Dec. 3, 2015

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