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Increasing Transparency In Health Care Costs – IMPORTANT!

Increasing Transparency In Health Care Costs – IMPORTANT!

Understanding Observational Status for Medicare Users In Hospital

YOU AND YOUR PARENTS HAVE MEDICARE? DON’T GET ZAPPED WITH UNEXPECTED MEDICAL BILLS!

Hospitals, health systems, hospital-owned private practices et al are using every avenue to increase consumers out-of-pocket costs.  Facilities fees are but one of the methods being used.

This month, an important law went into effect that will require hospitals to notify Medicare users if they are admitted under observation status, helping them make informed decisions and save on health care costs. A senior admitted for observation will don a hospital gown and be treated like any other patient in the hospital, but the designation will mean that they are technically receiving outpatient services. This often means that Medicare beneficiaries will have the costs of medications increase while hospitalized, and may find that post-hospital care will not be covered by Medicare.

“Medicare patients, like everyone else, need to be properly informed of their status when entering a hospital so as to make the best decisions in protecting their health and their wallet,” said Senator Terry Gerratana. “This new law will ensure that Medicare beneficiaries admitted to a hospital are told whether they are admitted under observation status. This will protect them from the increased hospital charges and out-of-pocket expenses that can be associated with extended hospital stays while under observation.”

"Effective October 1, 2014, hospitals will be required to provide oral or written notice to patients if they are admitted under “observations status” rather than as inpatients."

It is important that between now (July) and October 1, 2014, users and their loved ones are fully aware that this is being done.  When a Medicare patient is being kept overnight in the hospital, ask if the person is on observation status or is a fully admitted patient? The answer can be a difference of thousand of dollars out of your pocket or your loved one's pocket.

Notice of observation status is a critical issue for many Medicare users in Connecticut. A senior admitted for observation will don a hospital gown and be treated like any other patient in the hospital, but the designation will mean that they are technically receiving outpatient services. This often means that Medicare beneficiaries will have the costs of medications increase while hospitalized, and may find that post-hospital care will not be covered by Medicare. This new law ensures that seniors are informed to their status while in the hospital, so that they are not surprised by an inflated bill later on."

The Medicare Payment Advisory Commission and the Centers for Medicare & Medicaid Services have both noted that the frequency and duration of observational stays have been increasing. In 2012 alone, 1.5 million Medicare beneficiaries were admitted to the hospital under observation status rather than as inpatients. This often means that the patient went to the emergency room, was determined to be too ill to go home, and spent multiple nights in a hospital bed, receiving the full array of hospital services.

Medicare beneficiaries under observation may be responsible for out-of-pocket costs that substantially exceed the 20 percent coinsurance imposed for other Medicare Part B services. Additionally, because Medicare Part B does not cover self-administered drugs provided in the outpatient setting, patients under observational status are often responsible for the full hospital costs for any medication prescribed to them.

Additionally, patients under observation status may find that services needed after leaving the hospital are not covered. A three-day inpatient stay is required for Medicare coverage of skilled-nursing facility services, but time spent in observation does not count toward this threshold. As a result, patients may find that their treatment after leaving the hospital is not covered, even if they spent far more than three days in the hospital.

The complete bill and report linked below; this is very important.

http://www.senatedems.ct.gov/pr/gerratana-140710.php

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