Hidden Hospital Costs

By Sean Stillmaker in News on Nov 14, 2010 5:00PM

When you go to a hospital you think everything is going to be fine because you’re getting professional help by people in the "saving lives" business. Don’t forget it’s still a business. In an effort to cut costs and save money hospitals have been classifying patients under different statuses that leave the patient with an astronomical bill that will not be covered by Medicare.

Patients that are classified as inpatient staying three days or more have their costs covered by Medicare. Patients classified as observation do not. In Illinois over the last five years observation care patients jumped from 50,000 to 320,000 a year, according to the Daily Herald.

Observation status is not fully understood nor communicated to patients. In many cases a patient will stay in the hospital for 3-4 days, but is still classified under observation. Medicare’s guidance says it should take no more than 24-48 hours to make the determination.

Hospitals like observation patients because they receive less reimbursement from Medicare, which means they are less likely to get audited. Recovery Audit Contractors review inpatient claims.

A bill currently gestating in the U.S. Congress would mandate any patient under observation staying more than 24 hours will satisfy the three day inpatient status making eligibility for Medicare payments. In a report given to Congress Medicare thought more attention can be given to inpatients with the change, but inpatient levels remained constant.