Starting Wednesday, a new state law requires Connecticut hospitals to tell all patients when they are being kept in the hospital for observation instead of being admitted and to warn them about the financial consequences. Anyone who goes to the hospital can be placed on observation status, so that doctors can determine what’s wrong, and decide whether the patient is sick enough to be admitted or well enough to go home. Observation patients may receive diagnostic tests, medications, some treatment, and other outpatient services. Depending on their insurance, they can be charged a share of the cost. “They are in a regular hospital bed in a hospital room, getting a hospital level of care, and they have no way of knowing they were not admitted,” said Rep. Susan Johnson, a sponsor of the legislation and co-chair of the General Assembly’s Public Health Committee.
A lawsuit filed by fourteen seniors, including seven from Connecticut, seeking Medicare nursing home coverage was dismissed Monday by a federal court judge in Hartford. The seniors were among more than a million Medicare beneficiaries who enter the hospital for observation every year. Because they did not spend at least three consecutive hospital days as admitted patients, Medicare will not pay for their nursing home care. In their lawsuit, they argued that there is little difference between observation and admitted patients, except when it comes to paying tens of thousands of dollars in nursing home bills. They asked the judge to eliminate the ‘observation care’ designation or at least set up an expedited appeals process so that their observation status would be reviewed. They also wanted the judge to order Medicare officials to require hospitals to tell patients if they are receiving ‘observation care’ and have not been admitted.
Medicare patients had more than 600,000 hospital stays in 2012 that lasted three nights or more but did not qualify them for follow-up nursing home care, according to a new report by the U.S. Department of Health and Human Services’ Office of Inspector General (OIG). Although the report does not include historical data, it indicates that hospitals in the U.S. increasingly are designating multi-day stays as outpatient or “observation status” visits, rather than inpatient admissions. In all, Medicare beneficiaries had 1.5 million hospital stays in 2012 that were classified as observation visits, with more than a third of them lasting two nights or more. The “observation status” designation – which often deprives Medicare recipients of coverage for follow-up nursing home care – is being challenged in a lawsuit in U.S. District Court in Hartford and in legislation proposed by Democrat U.S. Rep. Joe Courtney, who represents the 2nd Congressional District. Many Medicare beneficiaries who come to hospitals in emergencies are classified as observation patients, even though the care they receive may be indistinguishable from the care received by patients classified as inpatients. Under current rules, Medicare will not pay for a stay in a skilled nursing facility after hospitalization unless the beneficiary has been classified as an inpatient for at least three consecutive days.