Growing Number of Patients Shocked to Find a
Hospital Stay Does Not Mean Youre Admitted
Can by costly for senior citizens finding Medicare
wont pay follow-up for observational hospital stays
By Susan Jaffe
This story was produced in collaboration with
Sept. 7, 2010 - After Ann Callan, 85, fell and
broke four ribs, she spent six days at Holy Cross Hospital in Silver
Spring. Doctors and nurses examined her daily and gave her medications
and oxygen to help her breathe. But when she was discharged in early
January, her family got a surprise: Medicare would not pay for her
follow-up nursing home care, because she did not have the prerequisite
three days of inpatient care.
"Where was she?" asks her husband, Paul Callan, 85,
a retired U.S. Army colonel. "I was with her all the time. I knew she
was a patient there."
For older people: expanded Medicaid, coordinated care
for Medicare-Medicaid patients, help for employers to insure early
retirees, FDA can approve cheaper drugs
For older people: expanded Medicaid, coordinated care
for Medicare-Medicaid patients, help for employers to insure early
retirees, FDA can approve cheaper drugs
But Holy Cross had admitted her only for
observation. Observation services include short-term treatment and tests
to help doctors decide if the patient should be admitted for inpatient
treatment. Medicare's guidance says it should take no more than 24 to 48
hours to make this determination.
Yet some hospitals keep patients under observation
for days, and that decision can have severe consequences. Medicare
considers
observation services outpatient care, which requires beneficiaries
to cover a bigger share of drug costs and other expenses than they would
when receiving inpatient care.
And, unless patients spend at least three
consecutive days as an inpatient, Medicare will not cover follow-up
nursing home expenses after discharge.
The Callans owe $10,597.60 to Renaissance Gardens,
the Silver Spring nursing home where Ann Callan spent three weeks.
"I'm going to fight this," Paul Callan says. "I
don't care how long it takes, because I don't think it's right."
The Callans have since retained an attorney to
pursue the matter, and hospital officials would not discuss details of
the case "in anticipation of possible legal action," a spokeswoman said.
However, Karen Jerome, a physician who is an adviser on care management
at Holy Cross, said in a statement that the hospital has a policy of
informing patients when they are in observation care and that patients
receive a thorough review to determine their status.
While patients generally stay in observation status
for no longer than 48 hours, she said, it is the patient's condition and
need for medical care that doctors have to consider most, not the clock.
Sometimes the patient does not meet criteria for inpatient care after 48
hours but hasn't improved enough to go home. When that happens, the
hospital will keep the patient until he or she has "a safe discharge
plan."
Conflicting Mandates
Claims from hospitals for observation care have
grown steadily and so has the length of that care, says Jonathan Blum,
deputy administrator at the Centers for Medicare and Medicaid Services
(CMS), the federal agency that runs Medicare. The most recent data show
claims for observation care rose from 828,000 in 2006 to more than 1.1
million in 2009. At the same time, claims for observation care lasting
more than 48 hours tripled to 83,183.
In a
report to Congress in March, the Medicare Payment Advisory
Commission said the increase may be explained by hospitals' heightened
worries of more-aggressive Medicare audits of admissions and Medicare's
decision in 2008 to expand criteria that allow patients to be placed in
observation status. Yet the number of people admitted to inpatient
status remained stable, the report said.
The trend is emerging as hospitals cope with
increasing constraints from Medicare, which is under pressure to control
costs while serving more beneficiaries. In addition to more stringent
criteria for inpatient admissions, hospitals face more pressure to end
over-treatment, fraud and waste.
In this environment, doctors have to make difficult
judgments about their elderly patients, says Steven Meyerson, medical
director for care management at Baptist Hospital of Miami.
If you have questions about your hospitalization or
nursing home coverage:
Call Medicare at 1-800-MEDICARE (800-633-4227) or
e-mail extendedobservation@cms.hhs.gov.
Medicare has a pamphlet about observation care that
is available
online.
"Under a set of rather arbitrary definitions, which
are very vague and difficult to understand and apply, we have to decide
who's an inpatient and who's an outpatient when sometimes the
distinction can be two or three points in their sodium level or the
amount of IV fluids they are receiving," he told CMS officials at an
information-gathering session Aug. 24.
If the distinction isn't always clear to doctors,
it's even more elusive for patients.
Toby Edelman, a senior policy attorney at the
Center for Medicare Advocacy in the District, has received dozens of
complaints from seniors who assumed they would have the fuller coverage
provided to inpatients.
"People have no way of knowing they have not been
admitted to the hospital," says Edelman. "They go upstairs to a bed,
they get a band on their wrist, nurses and doctors come to see them,
they get treatment and tests, they fill out a meal chart - and they
assume that they have been admitted to the hospital."
Setting a patient's status is complicated. More
than 3,700 U.S. hospitals use a tool created by McKesson Health Services
to guide the decision. It provides criteria for medical conditions and
treatment based on scientific evidence to identify "over 95 percent of
all reasons for admission to any level of care," Rose Higgins,
McKesson's president for care management, said in a statement.
Higgins said that hospitals can tell patients the
criteria used to assess their status, but the company's recent filing
with the Securities and Exchange Commission describes the
decision-making tool, called InterQual, as a trade secret.
Many patients are not told by hospital officials
that they haven't been admitted. (Medicare does not require such
notification.) And the designation can change during a person's hospital
stay. Sometimes a physician who hasn't seen the patient will determine
that the case does not merit inpatient status; Medicare requires that
patients whose status is downgraded must be informed.
'No Man's Land'
Ed Timmins, 88, has been in a nursing home in
Springfield since he was discharged from Inova Fairfax Hospital after
falling in a restaurant parking lot in June. The Defense Department
retiree was an observation patient during his four days at the hospital,
where he was treated for extreme back pain and received an MRI and other
treatment. But without the three-day inpatient stay, Medicare will not
cover his nursing home bill, which reached $23,864 through the end of
August.
On his first day in the hospital, Timmins, who has
Alzheimer's disease and was taking powerful painkillers, received a notice
saying he was being "placed into an outpatient status for Outpatient
Observation or Extended Recovery. You are still considered an
'outpatient' but are being cared for on a nursing unit for further
evaluation of your symptoms by your physician. Within 24 hours, your
physician should make a decision to either . . . Admit you for inpatient
treatment or Discharge you for continued outpatient follow-up care."
"For him to be treated at an Inova hospital for
four days and then be considered an outpatient is ludicrous," says his
daughter, Lynn Hollway. She was in his room - on the phone updating her
mother - when he received the notice but assumed they could deal with
the issue once his condition stabilized.
Hospital officials say status decisions are often
not in their hands. "Medicare rules require us to make sure that a
patient meets what's called medical necessity to be in an inpatient
status," says Linda Sallee, vice president for case management for the
Inova Health System. A hospital spokeswoman said Inova physicians would
not discuss details of Timmins's care.
Even if patients know they are observation
patients, there is little they can do to change their status. Medicare
has covered their care on an outpatient basis, so they have not been
refused benefits.
"There's no official appeal," says Edelman.
"Medicare has not denied coverage. You're in no man's land."
Following The Rules
Hospitals officials say they pay a price if they
give inpatient status to a Medicare patient who should only be under
observation. When that happens, the hospital is overcharging Medicare
and can be required to refund some of the money the government paid.
During a three-year pilot project in six states,
Medicare auditors, who received commissions based on overcharges they
uncovered, forced hospitals and other health-care providers to return $1
billion in improper payments. The program is being expanded every state
this year.
Pressure to increase the use of observation status
may also come from the new federal health law, which includes
penalties for hospitals that have unusually high rates of
preventable readmissions. Because observation patients have not
officially been admitted, they wouldn't count as readmissions if they
need to return.
The stepped-up audits and the new law's financial
incentives are intended to control skyrocketing Medicare costs and to
reward better care. That could be jeopardized by an increase in costly
inpatients. Easing the standard for inpatient status would also raise
the agency's nursing home spending.
"We've asked them to change it," says Sallee. "But
I would be very surprised if they did, because it would cost a lot of
money."
Blum says that many factors are involved in the
increasing use of observation care. "It's not clear to us whether or not
this trend is due to financial incentives," he says. "There could be
lots of other things going on."
For example, he says, doctors may be "doing the
right thing" by keeping vulnerable seniors in the hospital for
observation if they lack a support system at home.
Medicare officials are weighing changes to the
admissions policy and sent
letters to hospital associations in July soliciting suggestions.
Among the options are requiring hospitals to notify patients that their
stay is considered observation, setting a strict time limit for
observation care and changing how the agency pays hospitals for such
care, Blum says.
For some, changes may not come soon enough.
"This system is impracticable and just locks up
patients in the hospital," Meyerson told CMS officials last month. "They
are not well enough to leave and not sick enough to admit. So what do
you do with them?"
