MUST READ for those with ELDERLY PARENT(S): Medicare Rules Reshape Hospital Admissions

At Banner Health’s general hospitals, the rate of heart-failure patients who wind up admitted to the hospital again soon after leaving has been dropping significantly, according to a Wall Street Journal analysis of Medicare billing data. So has the readmission rate for patients treated for pneumonia and three other serious conditions.

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The Obama administration has cast such results as a triumph of the Affordable Care Act, which penalizes hospitals that have too many readmissions within 30 days of an inpatient stay. The goal is to encourage better follow-up treatment so patients can stay out of the hospital—keeping them in better health and whittling down the cost to the government.

But this seemingly good news isn’t as encouraging as it appears. At Banner, based in Phoenix, and at hospitals around the country, more patients are entering or re-entering hospitals under something called “observation status”—a category that keeps them out of the readmission tallies.

Patients on observation status can remain in the hospital for days, and typically receive care that is indistinguishable from inpatient stays, experts say. But under Medicare billing rules, the stays are considered outpatient visits, and as such, don’t trigger penalties under the health law.

The Journal’s analysis of Medicare billing data shows that increases in observation stays can skew the readmission numbers, letting hospitals avoid penalties even if patients continue to have complications and return for repeat visits. Observation stays generally are cheaper for the government, but in some cases they can lead to big bills that are the patient’s responsibility.

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... In some cases, observation stays can carry a financial sting for Medicare patients. Because such stays are treated as outpatient services, patients face copays that can in some cases exceed Medicare’s inpatient deductibles. An even bigger bite can come when patients are referred to nursing homes: Medicare generally doesn’t cover such care after an observation stay.

After taking a fall last year, Dolores Wellentin, shown recently

with her husband, Bob, spent four days in a hospital, a visit 

billed as ‘observation status,’ which meant that Medicare didn’t

 cover her subsequent stay in a nursing home. WSJ

“We were shocked,” said Bob Wellentin, 87 years old, a retired teacher in Puyallup, Wash., who said he had never heard of observation stays before his wife spent four days in a hospital after a fall in June 2014. She recuperated for more than two months in a nursing home, costing the couple more than $20,000, according to billing records and receipts. To pay the bills, the couple liquidated a life-insurance policy and cashed in certificates of deposit set aside to pay for their burials. ...

Read the full story HERE.

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