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Being ‘Under Observation’ Costs You More

Medicare Rules Are Encouraging Doctors to Increasingly Use ‘Under Observation’ Status

Studies by researchers at Brown University in Rhode Island are showing that since 2007, doctors have kept millions of patients ‘under observation’ instead of admitting them.  This means that patients are paying more out of pocket and the number of days they are in the hospital under observation means that it does not qualify toward the ‘number of inpatient days in the hospital’ required before Medicare will pay for nursing home care.  Medicare will pay up to 100 days in a nursing home but that is very atypical.  Currently, they pay for less than half of that.  It means that patients are going to have to pay for more of their own care and they will go home sicker.  This suggests the need for in-home care for a short period of time while they recover—another out of pocket cost.

Doctors are being more cautious about who they admit and are willing to classify as inpatient, perhaps in an effort to avoid negative Medicare audits targeted at number of admissions.  The Rub:  Patients admitted to hospitals pay less than those whose status is ‘under observation’. Because Medicare rules state these individuals are “outpatient”, their co-payments are frequently considerably higher. And they may be turned down for care in nursing home facilities if they require it.

What can you do?  Talk to a hospital advocate if you feel you are being unnecessarily kept under observation.  Call your doctor if you are being treated by a hospitalist.  If you don’t get satisfaction there, contact your attorney to see if there is a way they can intervene on your behalf.

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