Medicare's Nursing Home Benefit Are Hoping To Force The Government

Medicare paid for Betty Gordon’s knee replacement surgery in March; but the 72-year-old former high school teacher need a nursing home stay and care at home to recover. Yet Medicare wouldn’t pay for that. So Gordon is stuck with a $7,000 bill she can’t afford and, as if that were not bad enough, she can’t appeal. The reasons Medicare won’t pay have frustrated the Rhode Island woman and many others trapped in the maze of regulations surrounding something called “observation care.”

Patients, like Gordon, receive observation care in the hospital when their doctors think they are too sick to go home but not sick enough to be admitted. They stay overnight or longer, usually in regular hospital rooms, getting some of the same services and treatment (often for the same problems) as an admitted patient intravenous fluids, medications and other treatment, diagnostic tests and round-the-clock care they can get only in a hospital.

Medicare’s nursing home

But observation care is consider an outpatient service under Medicare rules; like a doctor’s appointment or a lab test. Observation patients may have to pay a larger share of the hospital bill than if they were officially admit to the hospital. Plus, they have to pick up the tab for any nursing home care. Medicare’s nursing home benefit is available only to those admit; so to the hospital for three consecutive days. Gordon spent three days in the hospital after her surgery; but because she was getting observation care, that time didn’t count.

There’s another twist: Patients might want to file an appeal; so as they can with many other Medicare decisions. But that is not allow if the dispute involves observation care. Monday, a trial begins in federal court in Hartford, Conn., where patients who were denied Medicare’s nursing home benefit; which are hoping to force the government to eliminate that exception. A victory would clear the way for appeals from hundreds of thousands of people.

The class-action lawsuit was file in 2011 by seven Medicare observation patients; also their families against the Department of Health and Human Services. Seven more plaintiffs later join the case. “This is about whether the government can take away health care coverage you may be entitle to and leave you no opportunity to fight for it,” said Alice Bers; litigation director at the Center for Medicare Advocacy; so one of the groups representing the plaintiffs.

Pay for the care

Gordon is not a plaintiff in the case; but she said the rules force her to borrow money to pay for the care. “It doesn’t seem fair that after paying for Medicare all these years, you’re told you’re not going to be cover now for nursing home care,” Gordon said. No one has explain to Gordon, who has hypoglycemia and an immune disease, why she wasn’t admitted. The federal notice hospitals are require to give Medicare observation patients didn’t provide answers.

Medicare isn’t dictating what physicians must do, said a physician who has research the effects of observation care. “It’s a benchmark upon which to base your decisions, not a standard or a mandate,” said Dr. Michael Ross, a professor of emergency medicine at Emory University School of Medicine in Atlanta. He supervises observation care units at Emory’s five hospitals and was chairman of a CMS advisory subcommittee on observation care.

In the meantime, observation care patients who get follow-up care at a nursing home may soon receive a puzzling notice. A Medicare fact sheet issue last month “strongly encourages” nursing home operators to give an “advance beneficiary notice of non-coverage” to patients who arrive without the require prior three-day hospital admission. But that notice says they can choose to seek reimbursement by submitting an appeal to Medicare an option government lawyers will argue in court is impossible.