Pro tip for old sickish people like us

This time of year I catch up on my continuing legal education hours by doing online seminars, so you're going to get the occasional hot consumer law tip. I chose a couple of Medicare courses this year, my husband and I being of That Age. An interesting warning* about hospital stays: some hospitals don't want to "admit" a new patient, for fear that Medicare will dispute the necessity, so they call it keeping the patient "under observation." The hospital will get paid less this way but also is in less danger of having 100% of the bill denied by Medicare, so the trade-off makes sense for the hospital. It makes less for you.

Being held for observation but not "admitted" has two big impacts on the patient's Medicare reimbursement. First, the whole stay, which can last a week or more and involve fantastic amounts of expensive consultations and tests, will be billed under Medicare Part "B," the part that covers outpatient services, rather than Part “A,” which covers hospitalization. Part “B” has higher deductibles and copays (unless you have a private supplement, a/k/a "supplement" policy), and your prescriptions will not be covered unless you have separate prescription coverage.

Those two effects alone could mean a big unexpected bill. Even worse, however, you won't qualify for any Medicare reimbursement at all for followup long-term care unless you had been a formally admitted inpatient for 72 hours, no matter how long you stayed "under observation.” You know how high the daily charges for long-term care in a nursing home can be. If you were an inpatient, you may find the coverage cuts off after 100 days (though there are exceptions), but if you weren’t even an inpatient to start with, you get zero days covered.

This can happen even if you're too sick for your initial hospital doctor to allow you to leave other than "against medical advice." You're supposed to get a written notice within some period (36 hours?) warning you that you're not technically "admitted.” Even better, you should insist on being told immediately whether you’ve been admitted or not. Unfortunately I don't know what to do about it if you complain but the hospital won't budge, other than agitate to be transferred to a hospital that will admit you—or demand to go home, if you can do that safely.

* The actual seminar I had to suffer through merely mentioned the inpatient/observation danger without explaining it. Someone in the audience asked why a hospital would do this, but the lecturer said she was baffled. A Google search yielding the linked answer in about a nanosecond, along with a lot more detail about the dangers of the trap, and the infuriating way it can work out for patients and their families.