Dear Reader--
Welcome back. We hope you enjoyed your Spring Break as much as we enjoyed ours. The updated picture this week represents the best Spring Break photo we took while we were out. We’ll buy lunch for the first person to respond to this newsletter and let us know where it was taken.
Over a year ago some of the biggest names in finance, medicine, and tech came together to create Haven, a nonprofit with the goal of improving health care in the United States. In early March, the new venture provided a few more details about what it would aspire to change. Specifically, Haven will address “making primary care easier to access, insurance benefits simpler to understand and easier to use, and prescription drugs more affordable.” While the vision is still pretty broad, if it can even improve even one out of three, we’ll be impressed.
Few decisions made by hospital personnel can make as practical a difference as the choice to classify someone admitted to a hospital as either “inpatient” for treatment or “outpatient” for observation. The reason the distinction makes such a difference is that if someone spends at least three nights in the hospital for inpatient treatment, that individual is eligible for Medicare coverage of skilled nursing facility services after discharge for up to 100 days. But if someone spends three nights in the hospital as an outpatient because he or she is only in the hospital for “observation,” then that person does not get Medicare coverage for subsequent treatment in a skilled nursing facility upon discharge. Given that the skilled nursing care can cost $200 per day, whether Medicare covers the cost makes a massive financial difference for the patient. It also makes a difference to the federal government’s bottom line.
Because of the impact on the government’s finances, the Office of the Inspector General (OIG) has studied issues related to whether hospitals are correctly applying the 3-day rule over 27 times since 2000. And just last month, the OIG issued a report finding that the failure of hospitals to correctly apply the 3-day rule from 2013 to 2015 resulted in $84.2 million of skilled nursing care payments that should not have been made. While no call to action or reform was issued, we expect that this recent report will increase the pressure on hospitals to comply with the rule, resulting in more hospital patients being discharged to nursing homes and being asked to pay for the full cost out of their own pockets in the near future.
Obviously it’s important to know your status if you or someone you care about is admitted to a hospital. Even more important is to make sure that the hospital doesn’t misidentify your status when you are admitted. If you need help with this, call us. We’re here to ensure that these types of unpleasant surprises don’t become your reality.
Happy Friday,
Jeremy
