ICU (Photo: Thinkstock) (Photo: Thinkstock)

Margie Barrie, a veteran long-term care (LTC) planner and educator, has been writing articles about LTC finance issues for decades.

Here she looks at a major, poorly understood Medicare trap.

With the many changes occurring in Medicare, it is important that those of us who specialize in long-term care (LTCI) protection be educated about the impact on our clients and even on us as we all age.

That’s why I thought this information would be helpful about what you must ask at the hospital.

A True Story

My mother faints in the lobby of her apartment building. She is rushed to the hospital by ambulance. She is seen by a doctor, and tests are ordered. Two days later, she is moved from the emergency room area to a hospital room.

(Related: Short-Term Care Insurance Sales Rise 20%)

When I arrive at the hospital, I asked the floor nurse this question:

Is Mom admitted to the hospital or is she here for observation?

The answer: For observation.

Several visits to the corporate office later, I finally got her status changed to admitted status. But doing that was not easy.

Why This Story Is Important

If Medicare is involved, asking about a patient’s status can save you, or your client, thousands of dollars.

Here’s why.

If you are at the hospital for observation – even if you have a room and are getting treatment – and you then need to go to a nursing home for rehabilitation, Medicare will not pay.

The reason: You have not met the minimum requirement of having a three-night hospital stay as an admitted patient.

I learned about this situation when a friend was scheduled to have both knees replaced at the same time.

Initially, she was planning to go to a nursing home for physical therapy for several weeks following the surgery. Then her doctor’s office notified her that she would be returning directly home instead. The reason: Medicare would not pay for the nursing home rehab because she was going to be in the hospital under observation status for just 23 hours, even though she was having surgery.

Even If You Think You Know All About This…

It’s not just short stays that are impacted by this.

Another friend was in the hospital for 10 days but was never officially admitted.

This is more important than ever. In a nationwide study of Medicare claims by researchers at Brown University, the ratio of observation patients to admitted patients rose by 34% in a two- year period.

As millions of baby boomers are aging and will need care, hospitals and Medicare will be continually seeking ways to reduce costs.

— Read Long-Distance Caregiving, Up Close: LTCI Insideron ThinkAdvisor.


Margie Barrie

Margie Barrie, an agent with ACSIA, has been writing the LTC Insider column since 2000.