If an elderly patient is hospitalized for three days, she and her family need to know whether it's as an inpatient or outpatient. Has she been admitted? Or is she under observation?
The difference is crucial. If it's the latter, the patient and her family need to prepare for the possibility of thousands of dollars in later nursing home bills.
Medicare will not pay for a stay in a nursing home after hospitalization unless the beneficiary has been classified as an inpatient — admitted — for at least three consecutive days.
More than a million Medicare beneficiaries are hospitalized as outpatients — for observation — every year. They are not technically admitted, often unbeknownst to themselves and their families.
When a hospital discharges an outpatient to a nursing home, the last thing she needs is thousands of dollars in bills because of this bureaucratic hairsplitting.
Hospitals are not required to disclose patient status (except in New York state), let alone explain the financial nightmare that could easily ensue. Patients' family members find out too late to prevent it, although they can appeal to Medicare.
In 2012, hospitals nationwide characterized more than 600,000 long hospital stays as observation, according to a July report by the inspector general's office of the U.S. Department of Health and Human Services. These stays are less expensive for both patients and hospitals. But since billing Medicare for too many expensive inpatient stays can trigger a federal audit, many hospitals keep patients in observation status to avoid government wrath. That puts families in the financial cross-hairs if nursing home care is necessary.
U.S. Rep. Joe Courtney of Connecticut has proposed a bill to eliminate the distinction between inpatient and observation status, allowing any patient who spends at least three days in a hospital to qualify for nursing home coverage.
Meanwhile, Connecticut's General Assembly should require hospitals to tell patients and families within 24 hours of admission what their status is and explain the potential financial differences. That will make for some unpleasant conversations, but families need the information before it's too late.