Devilish Money

Medicare Loophole Hurts Those on Medicare

Patient status (in-patient vs. out-patient) impacts how Medicare pays. Beware what billing status a hospital classifies an incoming patient because if it is as “outpatient”, which it often is, Medicare will not pay any follow-up nursing home costs, which can have a financial impact that can be devasting.  For example, a Medicare recipient recently was admitted to a hospital and remained for 6+ days and then was transferred to a nursing home for rehabilitation and skilled nursing care but because the hospital had listed her as an “outpatient” for observation despite the fact she had received medical care and been hospitalized Medicare would not pay any of her nursing home expenses.  This happens routinely across the country because

  1. Hospitals often use the billing code “outpatient” to protect themselves from overzealous auditors no matter how long someone is hospitalized or the care they receive.
  2. Medicare beneficiaries classified as “outpatient” cannot get any Medicare coverage for post-hospital nursing home stays for rehabilitation and/or skilled nursing care.
  3. Medicare beneficiaries classified as “outpatient” do not have the right to hospital discharge planning so must figure out next steps themselves.
  4. Medicare beneficiaries classified as “outpatient” usually must pay for prescription drugs they receive in the hospital.
  5. Medicare beneficiaries classified as “outpatient” cannot appeal after-the-fact to try to change their classification to “inpatient”.

Center for Medicare Advocacy and the New York Times ask that you sign a petition asking for Medicare to change this rule.


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