If you or a family member with Medicare are hospitalized, it’s important to know your rights with regard to “observation status.” Hospitals receive financial penalties from Medicare if they admit a patient who does not stay in the hospital for two nights.
Hospitals often keep patients under “observation status” rather than admitting them, and sometimes the patients remain in “observation status” for days.
To avoid these financial penalties, hospitals often keep patients under “observation status” rather than admitting them, and sometimes the patients remain in “observation status” for days. For seniors, observation status can be a real problem. If the senior needs to go to rehab or a skilled nursing facility after a hospitalization for physical or occupational therapy, Medicare may not cover their stay in rehab if they were hospitalized under “observation status.” To be eligible for Medicare coverage of skilled nursing care or rehab after a hospitalization, the patient must have been a hospital inpatient for at least three nights. For patients who were hospitalized for three nights or more, Medicare and Medicare supplement policies cover up to 100 days of rehab or skilled care.
If the patient was hospitalized for three nights under observation status, their stay in rehab or skilled nursing care may not be covered by Medicare.
The 100 days of Medicare coverage for rehab kicks in only after a three-night inpatient hospital stay. If the patient was hospitalized for three nights under observation status, their stay in rehab or skilled nursing care may not be covered by Medicare. A rehab stay costs several hundred dollars per day, so the classification of the hospital stay as “observation” rather than inpatient can end up costing the patient thousands. Hospitals are required to notify patients when their stay is classified as observation. If a hospital is keeping you or a family member for an extended amount of time, make sure to object to the entire stay being classified as “observation” status and request an inpatient admission to preserve Medicare coverage of inpatient rehab after the hospital stay.
Medicare coverage of rehab and/or skilled nursing care maxes out at 100 days, and most patients find that their coverage is terminated even sooner due to the need for physical or occupational therapy ending. Once Medicare and Medicare supplement coverage of rehab ends, patients must privately pay for their nursing home or rehab care, unless they can qualify for Medicaid to cover their stay. An Elder Law Attorney can help clients facing this situation qualify for Medicaid to cover their stay in rehab or skilled nursing care.
Amanda Spence is a Raleigh Elder Law Attorney who has been assisting clients in Wake, Johnston, Harnett and other counties throughout North Carolina for thirty years. If you need help with an Elder Law issue, contact her at 919-863-4183 or [email protected] to schedule a consultation.