Suit Contests Hospitals' Practice of Not Admitting Patients Prior to Nursing Home Transfer
Seven Medicare patients have filed a class action lawsuit challenging a Medicare policy that allows hospitals to place patients under observation for days on end rather than actually admitting them. If these patients then move to a nursing home, they are not eligible for Medicare coverage of the first part of their nursing home stay, costing them or their families thousands of dollars.
Medicare covers nursing home stays entirely for the first 20 days, but only if the patient was first admitted to a hospital as an inpatient for at least three days. In part due to pressure from Medicare to reduce costly inpatient stays, hospitals are increasingly not admitting patients but rather placing them on “observation status” to determine whether they should be admitted.
Although according to Medicare guidelines it should take no more than 24 to 48 hours to make this determination, in reality hospitals sometimes keep patients under observation for up to a week. If the patient moves to a nursing home after being “released,” the patient must pick up the tab for the nursing home stay — Medicare will pay none of it. The bills can run between $200 and $500 a day.
There is little that patients who know they have been placed in observation status can do because they haven’t been refused benefits. Medicare is still paying for their hospital stay, although on an outpatient basis.
“There’s no official appeal,” says Toby Edelman, a senior policy attorney at the Center for Medicare Advocacy. “Medicare has not denied coverage. You’re in no man’s land.”
More and more elderly are finding themselves temporary residents of this no man’s land. Medicare claims for observation care rose from 828,000 in 2006 to more than 1.1 million in 2009, and claims for observation care that lasted more than 48 hours tripled to 83,183.
Bipartisan bills in Congress that would allow for the time patients spend in the hospital under observation status to count toward Medicare’s three-day hospital stay requirement have gone nowhere. Believing they had no other options, and with harm to beneficiaries and their families continuing, and The Center for Medicare Advocacy and the National Senior Citizens Law Center filed the lawsuit.
The case, Bagnall v. Sebelius (No. 3:11-cv-01703, D. Conn), filed November 3, 2011, on behalf of seven individual Medicare beneficiaries who represent a nationwide class, argues that the use of observation status violates the Medicare Act, the Freedom of Information Act, the Administrative Procedure Act, and the Due Process Clause of the Fifth Amendment to the Constitution. The lawsuit asks that when hospitals place Medicare a beneficiaries in observation status for more than a day or so they notify the patient that their stay is not being covered by Medicare Part A.
In a press release announcing the lawsuit, one of the plaintiffs, Lee Barrows, described her husband’s stay in a Connecticut hospital.
“After five days of treatment in the hospital, my husband’s neurologist, physician and social worker ushered me into the hallway to tell me that my husband was never admitted. I was stunned with disbelief and tearfully blurted out that I would fight this,” said Mrs. Barrows. “His doctors then indicated that this happens once or twice a week.”
For more information about the lawsuit from the Center for Medicare Advocacy, click here.
I am a pre access nurse @ an acute care hospital. We watch observation patient stays daily and discuss with their physicians about expediting testing and treatments. The development of dedicated observation units has helped greatly. I feel that the 3 day inpatient rule should include observation stays or be abolished altogether. Please remember that it is a PHYSICIAN decision to admit and discharge patients not the hospital!
Re above- it is not a PHYSICIAN decision to admit a patient or keep on obs status. It is strictly by MEDICARE guidelines that patients are admitted or obs. Generally, since the criteria are so complex and not something that most physicians are even aware of, it falls to the hospital via care coordination or social work system to reccommend inpt or obs care for any particular patient. When families complain to me about admit status I have to refer to medicare guidelines and rules and not to physician medical decision making.
95 year old living by herself at home, comes with mild UTI and severe deconditioning, by medicare guidlines meets ONLY OBS criteria and eventually needs to go to NH…….now whose fault is this????physician or Medicare???these guidlines are STUPID!
I agree. It does not make sense. This is an example of how Medicare guidelines are changing which forces someone to spend all their assets for health care at the end of their lives, and then go into another government program (Medicaid – which includes state funds as well as federal funds) which puts the burden of financial responsibility on the states (state/local taxpayer instead of federal government/federal taxes. Please comment. Thanks.