Medicare Observation Stays: Important Info!

It is no secret that over the past decade, Medicare has tried to reign in hospitals that admit patients who might not really require a stay. All in an effort to save the ailing Medicare system. An unintended consequence has been the rise of the “observation” stay. A more expensive level of care for seniors who are hospitalized and may not understand the difference.

Here’s how it works…

When a patient is admitted to the hospital, their Medicare Part A covers the stay. (Deductibles and co-pays apply depending upon the length of stay.) If they have a three-night qualifying stay, they are also eligible to receive 20 days of care at a skilled nursing and rehabilitation center following their hospital stay at no cost. And an additional 80 days with a daily co-pay. Because the length of stay at a hospital is typically short, seniors often rely on those additional few weeks of rehab to get back on their feet.

But when a patient goes in to the hospital and is kept in “observation” their stay falls under their Medicare Part B benefit. Not only does this leave the senior with higher expenses from the hospital stay, it also denies them access to any inpatient rehab after they are discharged. Unless they want to pay the entire cost of that stay out of pocket. With average rehab rates costing over $200 a day, not many seniors can afford to foot that bill.

How big is the problem?

From 2007 to 2009, observation stays increased by 34%. In just those three years.

The direction Medicare has given hospitals in the past is that observation stays should be limited to 24 hours or less. But a study from Brown University concluded that 10% of observation patients were kept more than 48 hours. And the percentage of those kept longer than 72 hours was up by 88% from 2007 to 2009.

All of these concerns led The Center for Medicare Advocacy to file a class action suit against Medicare in 2011.

H.R. 1179/S. 569 would mandate the time a patient has spent in observation at a hospital be included in the three-night qualifying stay for accessing their skilled nursing and rehabilitation benefit. Medicare advocates are encouraging health care professionals to share their stories of how observation stays have hurt seniors they work with each day with their legislators.

Learn More

The Medicare experts at Senior Living Options, LLC invite you to download your complimentary copy of Medicare’s Are You a Hospital Inpatient or Outpatient from our homepage to learn more.

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