Medicare’s Observation Care Policy

The results of a recent study shows that low-income Medicare patients are often kept in the hospital for longer periods of time without being officially admitted than wealthier Medicare patients. Medicare requires that a patient who is admitted to the hospital to pay a fixed out-of-pocket fee that covers the bulk of the hospital stay, including follow-up acute nursing home care and repeated hospitalizations within two months of their release from the hospital. However, if the hospital only places a patient on observation status, rather than officially admitting him or her, the patient has many more out-of-pocket expenses that if he or she had been admitted to the hospital. For observation care, a patient must pay a one-time out-of-pocket fee , but also must pay 20% of all hospital service expenses and for certain drugs.

The study involved the 2013 Medicare claims of more than 67,000 patients who had combined hospital stays of more than 132,000. These patients came from 97% of the counties nationwide. When compared with the wealthiest 25% of patients, the poorest 25% of patients were 24% more likely to be hospitalized for more than three observation stays per year. Ironically, the wealthiest patients had the least risk of high out-of-pocket costs, and the risk was much higher for poorer patients. However, poorer patients also may be able to combat these high out-of-pocket costs with additional healthcare coverage, such as Medicaid.

As discussed above, there are many implications of Medicare’s observation care policy, including potentially higher costs for patients to pay for this service. Lengthier hospital and long-term care stays also can increase the potential for a loved one’s abuse and neglect. The Wisconsin elder abuse lawyers of Boller & Vaughan know how devastating it can be when you entrust your loved one to the care of others, only to have that trust completely betrayed. Our attorneys are dedicated to protecting your rights and those of your loved ones in all types of circumstances. We handle nursing home abuse and neglect cases on a daily basis, and we know how to get the relief to which you may be entitled. Don’t hesitate to fight back against a neglectful or abusive nursing care and assistance living facility that has caused harm to your loved one. Contact us today and see how we can help.


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