Advocacy Source

"And, with Medicare, observation services don't count toward rehab coverage."  Money Magazine, August 2012

The latest Money magazine has a good article on the increasing tendency for hospitals to put a patient on "observation" rather than admit the person.  The magazine article cites several cases when a person thought he or she was admitted as patient (in which case Medicare would cover expenses and subsequent rehabilitation), but was instead in the status of "observation" --- in which Medicare will not cover rehab services.  The problem stems from the rule that hospitalization stays are covered under Medicare A, while observation is covered under Medicare B, the outpatient plan.  If a person is in a hospital (admitted/not just observed) for three days, then transferred to skilled nursing care, Medicare covers the skilled nursing care.  And, because supplemental insurance kicks in only when Medicare pays, you will be stuck with the bill if you are in observation status instead of admitted status.  So, what to do:
1.  If you or your care receiver go to the hospital, make sure you know whether it is an admittance or an observation.
2.  If you have trouble getting Medicare to pay, there is an advocacy service:  Center for Medicare Advocacy at  www.medicareadvocacy.org

The mere fact that there exists a Medicare advocacy service, implies that we need to be alert to having our services paid when rightfully due, and to plan our services to meet Medicare A rules.