Due to a growing number of seniors having to unexpectedly having to pay for post-acute care, Medicare has launched a pilot project to test whether relaxing its hospital payment rules could help beneficiaries.
The issue revolves around patient classification. Under Medicare rules, a beneficiary must be in a hospital for at least three days as an inpatient to qualify for follow-up care Medicare coverage. However, even after spending several days in a hospital, some patients are classified as observation patients, which is an outpatient service. Additionally, observation patients generally have higher co-payments and they can be billed any amount for routine drugs they may need. This may all come as a surprise since Hospitals don’t have to tell patients they are in observation care.
Currently, if Medicare determines that a hospital has billed it for inpatient treatment of a patient who should have received observation services, the facility may lose its entire payment. This is believed to be causing hospitals to put too many people in observation care that should be inpatients. Under the pilot program, 380 Hospitals will be able to rebill Medicare for observation services of patients whose inpatient care are rejected. Medicare officials hope that this will take some pressure off of hospitals and grant beneficiaries, who need follow up care, access to the necessary services.