Medicare Loophole Could Cost You Thousands
KREX News Room
MESA COUNTY, Colo. - Marie Yeager, 89, is like any other aging Grand Valley resident.
She juggles living expenses with the added cost of keeping healthy ... something that seems to be getting more and more complicated.
"You know, what are people going to do? What are we supposed to do?" Yeager asked as she explained her situation.
Yeager has medicare and supplemental insurance. But after a lifetime of paying into the system, a loophole is leaving her and others with thousands of dollars in medical bills.
"... and it stresses me out so bad," Yeager said.
"It is very confusing for us sometimes. And many times, it's very confusing for the patients," explained Community Hospital's chief medical officer, Donald Nicolay, M.D.
It's the difference of being "observed" versus being "admitted."
Medicare will pick up the entire bill for the first 20 days spent in a nursing home after a hospital stay, but only if a patient is admitted to a hospital for at least three full days.
If however, the patient is classified as being under observation (an outpatient), the costs fall entirely on them.
"They give you the same treatment," said Yeager. "And it can be $30,000 that you have to come up with, even if you have insurance."
The problem isn't just with rehab centers. It extends even to the hospital bed. Had Yeager been admitted for a blood clot surgery, she would be looking at a $250 co-pay, rather than almost $1,900 in costs.
"There are rules that determine if a patient really is considered an inpatient or an outpatient," explained Nicolay.
He says it's a balancing act between what Medicare will allow hospitals to bill and providing as much care as possible.
"We want to do the right thing. We'd rather give the proper level of care at all times."
A Brown University study revealed that the amount of observed patients nationwide rose by 34 percent between 2007-2009.
But Nicolay says the current rate of observed patients is closer to 10-12 percent.
Hospitals actually have an incentive to admit a patient instead of leaving them under observation because they receive more money for admitted patients. However, Medicare can contest the status of a patient and force the hospital to repay the money.
Yeager says she received the highest level of care at Community Hospital, despite the growing issues health care facilities and patients alike are faced with.
"Hospitals don't get paid like they should and doctors don't either," she said.
Conversations with patients and health care experts seemed to reveal a deeper issue with the complex nature of elderly care available in the valley. That led NewsChannel 5 to an expert in the field.
Dave Norman with the Area Agency on Aging says the system is getting bloated.
"The program has gotten larger now than just acute hospital care. There are more choices, so at a time when you are not at your sharpest, you're asked to make some critical decisions," he explained.
Residents who find themselves getting wrapped up in costs they think insurance should cover can file an appeal with the Senior Health Insurance Program in Mesa County.
The county also has the ARCH program, or Adult Resources for Care and Help, which is available through the Mesa County Human Services department.
Lawmakers in several states have proposed various measures to close the Medicare loophole, but one has yet to pass.