Medicare Patients Beware: Hospitals Take Advantage to Take Your Money

hospital patient

It’s been a bitter pill to swallow for the generation that grew up always trusting that the healthcare system was set up to help them get exactly what they needed, for little or no cost. 

That bitter pill comes in the form of the realization that the purpose of the healthcare system is to maximize its profits. (Picture me smacking the palm of my hand against my forehead!) If they also happen to help a patient while making all that money, well, then, OK. That’s nice, too.

Yes – cynical – I know. But once we embrace the 30 thousand foot view of the healthcare system and money, we are in a better position to get what we need from it; to protect ourselves from the aspects that will cost us far more than they should.

But wait, you say… I’m on Medicare!  I paid into the system all my working life!  I don’t have to worry about the cost of my care! 

To which I answer – NOT TRUE!  Pull your head out of the sand! Because even if the government isn’t trying to make a profit from its citizens, it IS desperately trying to stem the bleed – the payouts to doctors, hospitals, testing labs, pharmaceutical companies, medical device companies… The government is drowning in costs for Medicare patients, so to the extent it can SAVE money – it’s looking for every way to do so. Therefore, more and more, Medicare is making changes to its payment system that pulls more from citizen pockets, taking less responsibility than it used to.

Case in point – and unrealized by too many hospitalized Medicare patients and their caregivers who do just don’t know how much a hospital stay might cost them; as in, tens of thousands of dollars… the concept of Observation Status.

This concept addresses whether or not the patient has been admitted to the hospital. Not all patients are formally admitted, even if they are moved to a room, stay overnight, and are tended to by the doctors and nurses of the hospital.

When patients are not formally admitted, they are considered to be under “observation status.” Medicare doesn’t pay for observation status. So patients who have spent their hospital time under observation status get billed directly by the hospital, and will be required to pay for the stay and its care themselves – at a minimum, several thousand dollars. No maximum, except, maybe their retirement money or their house.

Further, Medicare won’t pay for a nursing home stay if the patient hasn’t spent three consecutive days in the hospital prior to admission to the nursing home. In that case, the hospital bill will pale in comparison to the cost of the nursing home when the patient hasn’t been fully “admitted.”

Now, here’s the scary part. For many patients, the hospital can make MUCH more money by skipping over Medicare, and charging patients directly. Medicare’s payments are a fraction of what the hospital charges individual patients who don’t have Medicare. So the hospital doesn’t want to make it easy for Medicare to be the payer because it will make much more money when it bills YOU. The hospital has NO incentive to help you understand any of this, and it makes more money when you stay under observation.

But wait! There’s more!

Once you’ve confirmed the patient has been formally admitted, you have to stay vigilant that the patient’s status doesn’t get changed to observation. Who can change it?  Hospital administrators who can check your credit (yes, really) and decide they would rather bill you than bill Medicare. They can decide, without telling you, to change you to observation status, even after you’ve been there for a few days.

So that’s that’s the key – making sure that when you or a loved one goes to the hospital, you are formally admitted to the hospital and that your status remains “admitted”. Whether you arrive by ambulance to the Emergency Room, or you know weeks in advance that you’ll be there for a procedure or a test, you need to make sure cross the admissions “T”s and dot the admissions “I”s to be sure your stay is not considered to be observation.

How do you make sure your status is admitted?  How do make sure it doesn’t get changed? Who do you ask? Where can you find the right person to ask? Exactly how do you go about protecting yourself from observation status and hospital profit policies?

If you are the patient, it would be almost impossible to stay effectively vigilant. If you are the caregiver, you’re loathe to leave your patient’s bedside to try to track it down. So it’s easier said than done, right? 

Which is why (I know – you saw this coming…) you need an independent advocate to help you. An independent advocate is – yes – independent of the hospital. They have no profit motive for your hospital stay. They aren’t beholden to the hospital or to Medicare. They just want to be sure you’re protected from hospital bills you don’t expect while you get the care you need and deserve.

Your independent advocate knows the questions to ask, knows who to ask, and knows how to make the adjustments that need to be made to be sure you get the care you need, paid the way it should be.

Find a patient advocate to help you for your next hospital experience. It’s crucial – for your health AND your wallet.

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