Medicare and Post-Hospital Coverage 
There is an increasing trend to admit Medicare beneficiaries to hospitals for "observation" as outpatients, rather than admitting them as regular "inpatient" hospital patients.
This practice may prevent patients from obtaining coverage for post-hospital care under Medicare. Since many individuals rely on Medicare as their primary health insurance coverage, this practice can have serious impact on these patients who may need post-hospital rehabilitation or other post-hospital care.
This practice may prevent patients from obtaining coverage for post-hospital care under Medicare. Since many individuals rely on Medicare as their primary health insurance coverage, this practice can have serious impact on these patients who may need post-hospital rehabilitation or other post-hospital care.
A Medicare beneficiary who is admitted on an "inpatient" basis to a hospital for at least three nights is normally entitled to limited Medicare benefits post-discharge for skilled care in a rehabilitation center or nursing home. Part A of Medicare will cover nursing home rehab or skilled care at 100% for the first 20 days, and then all but a co-pay of about $158.00 per day up to another 80 days. However, this benefit is only available after an "inpatient" hospital stay for the required three nights.
An example of how this can be devastating to a Medicare patient is: patient breaks an ankle and is in the hospital for 1 day, and then is transferred for rehab to another facility. Because the patient did not spend "three nights" in the hospital, Medicare will not pay anything towards the post-hospital rehabilitation costs.
What is causing this increased use of observation-outpatient classification by hospitals? It appears that the auditing procedures established by Medicare in 2010 to detect and prevent Medicare fraud are the driving force behind the upswing in outpatient classifications.
These audits are conducted by private contractors who are paid based upon the Medicare reimbursements to hospitals that the contractors identified as being unnecessary and required the hospitals to pay back to Medicare.
These audits are conducted by private contractors who are paid based upon the Medicare reimbursements to hospitals that the contractors identified as being unnecessary and required the hospitals to pay back to Medicare.
??My thanks to Linnea J. Levine, a Certified Elder Law Attorney? in Westport, Connecticut for the information contained in this article.
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