Robert Pear discusses a new Medicare law in effect as of this month which requires hospitals to notify patients of extreme out of pocket costs they may incur if they stay in excess of 24 hours without being admitted. Pear elaborates,

The text of the standard “Medicare outpatient observation notice” is subject to approval by the White House Office of Management and Budget. In its current form, the notice to beneficiaries says: “You’re a hospital outpatient receiving observation services. You are not an inpatient.” And it explains that Medicare will cover care in a skilled nursing home only if the beneficiary has had an inpatient hospital stay of at least three days.

Patients can then consult their doctors and may ask to be reclassified as inpatients.

Hospitals have found themselves in a squeeze. They increased their use of “observation status” in response to close scrutiny of their billing practices by Medicare auditors — private companies hired by the government to review claims. In many cases, these companies challenged decisions by doctors to admit patients to a hospital, saying the services should have been provided on an outpatient basis. The auditors then tried to recover what they described as improper payments.

Doctors and hospitals said the auditors were like bounty hunters because they were allowed to keep a percentage of the funds they recovered.

Continue reading the full story here: New Medicare Law to Notify Patients of Loophole in Nursing Home Coverage

Posted by Allison Trupp, Associate Editor, Wealth Strategies Journal