Quirk in Medicare System’s Observation Status

Benjamin LongElder Law, Estate Planning, Medicare, Nursing Home

Benjamin E. Long - Championing Rights in Medicare Observation Status Cases

As the founding attorney at Schlagel Long, LLC, with a focus on estate planning and probate law, Benjamin E. Long is deeply committed to addressing the evolving challenges faced by seniors and their families in the realm of elder law. With his extensive background in probate, property, and business matters, Ben has emerged as a knowledgeable advocate in cases involving the complexities of Medicare's observation status.

Recognizing the financial and emotional burdens that the Medicare system's observation status places on elderly patients and their families, Ben is dedicated to offering legal guidance and support. His expertise encompasses assisting clients in understanding and navigating the intricacies of Medicare, particularly in light of the growing issue of observation stays.

Ben's approach is not just about legal representation; it's about telling the story of each client in a way that honors their dignity and life's work. He understands that dealing with Medicare's observation status is not just a legal issue but also a deeply personal one, involving a patient's health, financial security, and family dynamics.

His legal education at Washburn University School of Law, combined with his background in biology from Kansas State University, provides him with a unique perspective on the interplay between law, healthcare, and the needs of the aging population.

Benjamin Long is not only an accomplished attorney but also a dedicated educator, teaching at Washburn Law School and coaching the Kansas State University Mock Trial Team. His awards and recognitions, including the Super Lawyer Rising Star and the Martindale-Hubbell Client Distinction Award, attest to his professional excellence and commitment to his clients.

For those facing challenges related to Medicare's observation status, Benjamin E. Long offers a blend of legal acumen, compassionate understanding, and a tireless commitment to advocating for the rights and well-being of the elderly and their families.

Benjamin Long - Estate Planning Attorney

The Growing Issue of Medicare's Observation Status

“Unfortunately, over a decade, the number of observation stays has increased exponentially and is being used, even when patients have a diagnosis and have been admitted by their own physicians.”

There’s a troubling quirk in the Medicare system that occurs when older patients are hospitalized and instead of being officially admitted, they are placed on “observation status” reports the article “Caught Paying for Rehab Due to Observation Status? Medicare May Owe You” from The National Law Journal.

How Observation Status Negatively Affects Patients

Observation status originally was meant to serve as a temporary status for people who were receiving medical care and tests in a hospital setting until they were either sent home or a diagnosis was made, and they were officially admitted.

Financial Burdens of Observation Status on Medicare Beneficiaries

However, in the past 10 years or so, the number of patients in hospitals deemed to be in observation status has increased enormously, even when patients have received a diagnosis and their doctors have admitted them to the hospital. This is a direct result of the Medicare claims review process, where hospitals risk not being paid because of inpatient services being billed without documents of certain diagnoses and levels of care.

The Consequences of Medicare's Claims Review Process

Protecting Hospitals at the Expense of Patients

The hospital seeks to protect itself, by designating a patient as observation status. There’s no downside to the hospital, since this is covered by Medicare, just under Part B, rather than Part A.

However, for the patient, it’s not that simple. First, the denial of Part A inpatient coverage means that the patient has to pay for each and every deductible and copay for each service. Prescription drugs received while the patient is in the hospital are billed separately and aren’t included under the Part A inpatient payment.

It gets worse. Medicare coverage for post-hospital care is denied or extremely limited for observation status patients. Medicare only covers rehab costs in a facility, if the patient was admitted to the hospital for at least three days.

Observation status days do not count towards those qualifying days. It doesn’t matter if the treating physician had the patient admitted to the hospital, because hospitals can change the status of the patient retroactively.

Challenging Medicare's Observation Status Decisions

The Impact of Alexander v. Azar on Reimbursement Appeals

Until recently, there was no recourse for patients. However, a recent class action suit in Connecticut may see that begin to change. A federal judge held that Medicare beneficiaries whose hospital stays were changed to observation status may appeal to Medicare for reimbursement of their payments to rehabilitation facilities. As a result of Alexander v. Azar, patients have the right to recover payments for their nursing home rehabilitation stays.

Seeking Legal Assistance in Observation Status Cases

Consulting an Elder Law Estate Planning Attorney

Patients whose doctors placed them on observation status still are not permitted to appeal.

Speak with your elder law estate planning attorney, if this scenario applies to you or family member.

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