Tuesday, July 2, 2013

Facing the Issue: Observation Stays

When it comes to politics, it’s often easy to forget the men and women who are impacted by decisions made in Washington. But at the heart of every issue there are people – lives that are affected by laws, rules, and regulations. So we’re putting faces, names, and stories to the topic at hand. Each of these stories comes from an individual who has voluntarily chosen to become an advocate for this issue by sharing his/her own personal experience.

The Issue: Under the Medicare statute, patients must have an inpatient hospital stay of three or more consecutive days, not counting the day of discharge, in order to meet Medicare criteria for coverage of post-acute care in a SNF. As a result, although the care received by patients in observation status is indistinguishable from the care received by inpatients, outpatients in observation who need follow-up care in a SNF do not qualify for Medicare coverage. Hospital stays classified as observation, no matter how long and no matter the type or number of services provided, are considered outpatient. These hospital stays do not qualify patients for Medicare-covered care in a SNF. Read more about observation stays
here and on the AHCA/NCAL website.

This is the second post in the Facing the Issue: Observation Stays series.  See previous posts here.

Robert King
White Oak Manor

South Carolina

When White Oak Manor initially consulted with Mr. Robert King and his family regarding his stay at the skilled nursing facility, it was clear to everyone that Mr. King would be billed as a Medicare patient. He had just come off a four-day stay in the hospital, which had confirmed that Mr. King had indeed been admitted as an inpatient and met the requirements for Medicare Part A skilled nursing facility benefits. It was a surprise, then, not just to the facility, but to Mr. King and his family when that Medicare claim was denied. Upon further investigation with the hospital and its records, it was revealed that Mr. King’s first day in the hospital had been categorized as observation, while the remaining three days (but not three full days) were categorized as inpatient. White Oak Manor found that because Mr. King was a dual-eligible patient, or qualified for both Medicare and Medicaid coverage, his stay at the skilled nursing facility could be rebilled to Medicaid. However, under Medicaid, Mr. King is retroactively responsible for paying his monthly Medicaid liability while receiving his therapy and care. Had he qualified for the Medicare coverage, as both Mr. King and the facility thought, his first twenty days at the facility would have been completely covered by the Medicare program.

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