Archive for November, 2012

Big Change in Medicare LTC…or Not?

November 26, 2012

To quote Medicare & You, the official U.S. Government Medicare handbook (Page 31), “Medicare doesn’t cover long-term care or custodial care.”.  Nothing new here.  What has changed is the Medicare LTC continual improvement requirement.  The question is now before a federal court in Vermont, but it looks like the requirement for “continual improvement” will soon be eliminated.

What will continue to be necessary before Medicare can pay for ongoing care in a nursing home or in a personal residence (home) setting?

  Care in a Medicare-approved nursing home: The patient must first have spent at least three days as a hospital inpatient immediately prior to the nursing home admission.  The day of discharge and days spent in “observation” status are not counted.  If these requirements are met, Medicare pays for the full nursing home cost for the first 20 days.  The patient then pays a co-pay of $148 per day (the rate for 2013) for days 21-100.  After the 100th day of a benefit period, the patient pays everything and Medicare pays nothing.  Some Medicare Supplement, or “Medigap” policies cover all or a portion of the nursing home co-pay for days 21-100.  Some do not.

  Care at Home: A doctor must certify that you need intermittent skilled nursing care, physical therapy, speech-language pathology, or continued occupational therapy services.  You are not eligible for a Medicare home health care benefit if you need more than part-time or intermittent skilled nursing care.  You are also not eligible if you only need custodial care (Help with bathing, dressing, eating, toileting, continence or transferring, i.e. the Activities of Daily Living).  People with Alzheimer’s or other forms of dementia often need to be supervised (or watched) to make sure they do not hurt themselves or others.  This supervision is yet another variation of long term care that is not covered by Medicare.

So, assuming the continual improvement requirement does go away, what will really be changed?  Most importantly, the change will only apply to people who need skilled care.  Most long term care is custodial, which is not covered by Medicare.  It will help people with conditions like Parkinson’s and strokes to receive at least some Medicare nursing home benefit for the full 100 days (Remember: Medicare fully covers the first 20 days if all other requirements are met… then there is a daily co-pay for days 21-100).  The change will also help people who are certified as needing skilled care at home.  Bottom line: While the likely change in eligibility requirements will help some who can benefit from skilled care, Medicare will continue to not cover the dominant long term care services need for custodial care.

Throughout this article, I have used the term “nursing home” to mean a Medicare-approved skilled nursing facility.

Disclaimer:  This represents my understanding of the recently announced pending change in Medicare long term care eligibility requirements.  Although I have researched a number of official Medicare sources, Medicare is a complicated subject.  Please consult with an attorney specializing in elder law for specific questions about Medicare.  Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice. 


© Raymond Smith, The Long Term Care Specialist, 2012

In-Hospital Patient Status: Admitted or Observation…Why it Matters

November 26, 2012

Medicare provides up to a 100 day nursing home (technically, Skilled Nursing Facility) benefit after a 3 day minimum hospital stay.  See the article, Big Change in Medicare LTC…or Not?, in this eNewsletter for benefit details.  What does Medicare mean by a “3 day minimum hospital stay”?

The stay begins on the day you are formally admitted, with a doctor’s order.  The day of discharge is not included.*  Here is the kicker: What if you go to a hospital emergency room with chest pains and remain in the hospital under observation?  “Observation” doesn’t start the 3-day clock running.  What if you were in the hospital, under observation, for three days, are discharged and then admitted to a nursing home for follow-up treatment?  Doesn’t count…Medicare pays nothing for your nursing home stay.

Most people assume if they spend the night in a hospital bed, wear a hospital wristband, and receive medical treatment, they have been admitted.  This is not necessarily correct…the patients status could be observation.  A person may have been formally admitted, but then had their status retroactively changed to observation by the hospital utilization review team…without the patient knowing about the change. 

Both the number of observation stays and the length of stays are increasing.  A recent Brown University study looked at hospital stays from 2007 to 2009.  Nearly 40% of elderly patients were in observation status for 24-48 hours.  Almost 45,000 Medicare beneficiaries were in observation status for more than 72 hours in 2009…and the trend of increased observation stays seems to be continuing.

Why may hospitals be assigning observation status to patients?

1. For good reasons.  An example would be someone taken to an emergency room after an automobile accident to be “checked out”.  Evaluation determines no serious injuries, and the person is sent home the same day.  Observation makes sense in this case.

2. Hospitals are now being financially penalized by Medicare for discharging patients who are then soon readmitted.  Someone cannot be readmitted if they were never admitted in the first place, i.e. held for observation.

3. Hospital admission decisions are being closely scrutinized by Medicare auditors.  Given the pressure to hold down spending, Medicare prefers observation to formal admission because the patient co-pays for drugs and hospital services are higher with observation.  Even more federal dollars are saved when Medicare does not have to pay for a subsequent nursing home stay.

Take away:  Pay close attention to patient status anytime you or a loved one covered by Medicare enters a hospital for treatment.  Be an advocate for “admitted” whenever that is appropriate.  Frequently confirm that status has not been changed.  The difference between “admitted” and “observation” could be tens of thousands of dollars in out-of-pocket costs.

* Since the day of discharge is not included, the requirement for a 3 day hospital inpatient (“admitted”) stay is really three overnights.

Disclaimer: Medicare is a complicated subject.  Please consult with an attorney specializing in elder law for specific questions about Medicare.  Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice. 

© Raymond Smith, The Long Term Care Specialist, 2012