When your loved one goes into the hospital, they can be categorized in a variety of ways. The most common of these is inpatient. But another common designation is medical observation status.
The use of medical observation status, also known as observation outpatient, certainly has legitimate value. Doctors will often use it when they are not sure what is wrong with a person. It usually means whatever is wrong is too problematic to be treated at home.
While observation status has become routine, it can be problematic for patients, especially those on Medicare. Hospitals use the status to bill Medicare for services. Often, people who receive care in hospitals, even those who stay for several days, may have never been admitted as inpatient. Instead they remained in the observation status.
The problem is Medicare may not pay for some services if the patients were never officially admitted. They may be charged for their medications but they could have brought the same medicine from home. And more significantly, patients who were not admitted as inpatients and later have to go for nursing home care may be paying for that themselves. Medicare only pays for nursing home care after a three-day inpatient stay.
But some of that started to change on August 7. Starting on that date, Medicare beneficiaries in the hospital must be told if they are on observation status within 24 hours, both in writing and verbal form. While this does not fix the problem, it at least makes people aware of the situation. For that, it is a start in the right direction.