Posts filed under ‘Observation’
July 14, 2016 – The Center for Medicare Advocacy (CMA) is thrilled to be partnering with The John A. Hartford Foundation to improve care for older adults with long-term and chronic conditions. With the Foundation’s generous two-year grant, CMA will be able to focus on solutions for older adults caught in the web of hospital “outpatient” Observation Status, which reduces access to key health and therapeutic care.
Over the two-year grant period, CMA, will gather existing resources and collect stories from beneficiaries, produce and update advocacy materials, and conduct extensive outreach and education that will improve observation status policy through regulatory change, improved federal guidance, and increased awareness by legislators. The grant funding for this project will also strengthen CMA’s advocacy on other important issues, including increasing access to oral health care for older adults.
“Outpatient” Observation Status is a policy created by the Centers for Medicare & Medicaid Services to classify certain very short hospital stays for billing purposes. The intent was to identify, and pay less for, these stays.
Medicare hospital patients are increasingly classified as “outpatients” on Observation Status, rather than admitted inpatients. This is true even for patients who are in the hospital for many days, for diagnosis, tests, nursing, physician care and treatment. Unfortunately, Observation Status results in myriad unintended consequences. For example, Medicare coverage for post-hospital nursing home care is often entirely unavailable for Observation patients since it requires a 3-day prior inpatient hospital stay. Thus, Observation Status “outpatients” are ineligible for Medicare nursing home coverage even if they were in the hospital for many days or weeks.
Hospital Observation Status has profound consequences for the quality and cost of care available for older, vulnerable Medicare patients. It also harms hospitals and nursing homes, the Medicare appeals process, the integrity of the Medicare program – and shifts costs to State Medicaid budgets. With support from The John A. Hartford Foundation, CMA will be able to enhance efforts to reduce the harm caused by Observation Status and to advocate for better care for older adults.
“We are very pleased to support the passionately driven and highly expert staff at CMA, led by the indomitable Judith Stein,” said Terry Fulmer, PhD, RN, FAAN, president of The John A. Hartford Foundation. “As our Foundation works to create age-friendly hospitals and health systems, CMA’s important policy work will raise visibility and diminish the negative impact of the Observation Status classification of older hospitalized adults through outreach and education.”
The December 2, 2015 Wall Street Journal story “Medicare Rules Reshape Hospital Admissions” described how hospital stays classified under “observation status” can lead to big bills for patients without their knowledge.
The Center for Medicare Advocacy has worked for many years to eliminate, or at least reduce, the harm that observation status causes people who rely on Medicare. We have developed self-help materials,http://www.medicareadvocacy.org/self-help-packet-for-medicare-observation-status/, assisted beneficiaries and families, brought together a coalition of national organizations to support federal legislation that would fix the problem, and filed lawsuits.
“Outpatient” hospital observation status is limiting access to necessary nursing home care, skewing public health data regarding hospital admissions and readmissions, increasing Part B costs and cost-sharing, and creating lengthy delays in the Medicare appeals system. With all this harm, one must ask: Why does the Centers for Medicare & Medicaid Services insist on continuing this dreadful policy?
Proposed Budget Seeks to Reduce Dramatic Rise in Part B Costs: Advocates Remain Concerned About Underlying Causes
If Congress and the Administration truly seek ways to limit Medicare premiums and deductibles (Robert Pear, 10/6/2015, and 10/15/2015), they ought to look at the Medicare agency’s hospital Observation Status policy.
A major cause of the Part B increase is likely the parallel increase in so-called “outpatient” observation status. The result of this misguided policy is that unprecedented amounts of hospital care are being billed to Medicare Part B, rather than Part A. This was never intended by the law. In fact Part A is called “Hospital Insurance” in the Medicare Act. Yet, thousands of patients stay days in hospitals only to learn they were not admitted as inpatients. Instead, they are classified as outpatients on observation status. One of the myriad consequences of this policy is that Part B expenses are sky rocketing – increasing Part B premiums and deductibles and cost shifting to Medicare beneficiaries.
We agree it’s important to find a permanent solution to the physician payment formula (“Sustainable Growth Rate” or SGR), but the Bill passed by the House of Representatives today is not the answer. It isn’t balanced. It asks too much from beneficiaries without providing enough in return. It asks nothing from pharmaceutical or insurance companies. It continues the ever-increasing privatization of Medicare by increasing costs for beneficiaries for traditional Medicare and Medigap plans. It adds unnecessary costs for the Medicare program and taxpayers.
Of the portion of the SGR costs that will be off set, roughly half (approximately $35 billion of the total $70 billion over 10 years) would come from Medicare beneficiaries through changes that will increase their out-of-pocket costs for health care, including:
• Adding deductibles to Medigap plans purchased by new Medicare beneficiaries starting in 2020;
• Further means-testing premiums for higher-income beneficiaries; and
• Overall increases in Part B premiums.
While the SGR package would make the low-income, Qualified Individual (QI), program permanent, which we strongly support, and would minimally increase and temporarily extend important funding for beneficiary education and outreach, it does not address other key issues that serve as barriers to care. For example, instead of repealing the annual outpatient therapy caps, the process to seek an exception to the cap is extended for another two years. Instead of addressing hospital Observation Status, the Bill further extends enforcement of the so-called “two-midnight” rule.
In short, Medicare beneficiaries would pay too much, with too little in return. Major drug and insurance industries pay nothing, and stand to gain a great deal. As the SGR debate moves to the Senate, we hope further balance and improvements for beneficiaries will be made.
When it wrote the Medicare law, Congress called Medicare Part A “Hospital Insurance” and Part B “Supplemental Medical Insurance.” Part A is intended to pay for inpatient hospital care. It is a charade to consider people who stay IN the hospital for more than 24 hours “outpatients,” and pay for their care under Part B. This not only conflicts with the Medicare law and Congressional intent, it also harms the older and disabled people – and their families – who depend upon Medicare and for whom the law was written. They lose their right to Part A hospital coverage, are often left with hospital bills they would not have if they were properly admitted, and completely lose their ability to obtain Medicare coverage for post-hospital nursing home care. CMS’s insistence on continuing this policy places hospital payment mechanisms over the interests and rights of older and disabled people.
When Mrs. Lee Barrows was told that her husband Larry, whom she’d been visiting in the hospital for a week was not an in-patient, she asked, then “Who the hell have I been visiting?” This scene in Connecticut is being repeated daily in acute care hospitals all over the country. Medicare beneficiaries – although placed in hospital beds (often, from the emergency room) and given medications, tests, therapies, medical and nursing services, food, and a wrist-band – are told they aren’t in-patients; they’re just receiving observation services as outpatients. Patients often learn about their out-patient status just as they are leaving the hospital for the skilled nursing facility – which won’t be covered by the Medicare program because they weren’t in-patients for three consecutive days!
The Center for Medicare Advocacy has been hearing this story with increasing frequency over the last year. We’ve been writing about it (see our 5/24 post), and now, the media is reporting on it.
Bloomberg News published an article by Drew Armstrong on its website and in Business Week – “Medicare Fraud Effort Gives Elderly Surprise Hospital Bills” (July 12, 2010), http://www.bloomberg.com/news/print/2010-07-12/hospital-fraud-audits-spur-unintended-cash-penalty-to-elderly-on-medicare.html
The Philadelphia Inquirer also addressed this pressing issue in its article “High cost, rigorous rules can trap Medicare patients” (July 4, 2010), http://www.philly.com/inquirer/health_science/daily/20100704_High_cost__rigorous_rules_can_trap_Medicare_patients.html
The Center has lots of information on this issue. Please go to http://www.medicareadvocacy.org/InfoByTopic/ObservationStatus/ObservationMain.htm
And let us hear from you, too! What is happening to you and your friends and relatives in the hospital?