Reading: How Medicare Stole My Mother’s Health and Life Savings

Navigating the Sandwich

How Medicare Stole My Mother’s Health and Life Savings

My very independent mom was aging right. Until she checked into the hospital

By Cat Stone

Photo of Marion Geoghegan Campbell

Some days it’s impossible to believe mommy’s gone.

But every day, it’s impossible to believe that she went the way she did: penniless and in pain—on every level. She spent her final years beating herself up for making the biggest mistake of her life. She wanted to support herself with the money she’d taken a lifetime to save. Instead, mom died embarrassed and heartbroken knowing the government had stolen her entire life savings and more because of a Medicare loophole.

Mom was puttering around her Florida apartment late in the spring of 2012 when without warning, she heard, then felt, a loud crack. Her hip fractured and sent her flailing backward onto the floor. In agony, she called out to her dear friend next door who dialed 911. She was rushed to the hospital.

My brother and I both lived out of state and mom didn’t want to worry us. So intelligent and capable (she had graduated from both high school and business school by age 16), she “took care of everything,” then called to tell us that she was already checked in.

Concerned about our mother’s health,  neither of us thought to ask how she had been admitted to the hospital.

In fact, we had no idea that there was a right or wrong way to be admitted.


Her American Dream
Born in 1924, my mother, Marion Geoghegan Campbell, began work in 1940 in the typing pool for Grace Shipping and quickly made her way up through the ranks, eventually leaving and becoming a paralegal. Marion helped set landmark cases in computer law.

She was also a Catholic who wrote her Pope annually. She trusted in the honor of our country, her fellow Americans, and the agencies that were meant to serve and protect her.

At 86 she was healthy and sharp and could sign her name with assistance (her eyesight was failing); she had all documents—from grocery lists to greeting cards—read to her. And she wasn’t shy about asking people to jump in to help.

Long before her vision deteriorated, Marion read everything she could about Medicare. She went into her senior years understanding how it worked. She even researched the skilled nursing facilities in town so she’d have a plan in case anything unexpected happened. She understood that with a three-day hospital stay, Medicare would pay for 100 days of skilled nursing or rehabilitation.

So when a doctor at the hospital told her that she had to sign the paperwork or leave, she signed. She told us that she was doing so well after the fracture that the hospital was just keeping her “under observation” and that she was relieved not to be “admitted.”

We all thought that was a good sign. Even though she was in pain, we assumed it meant she hadn’t been seriously injured.

The problem was that she was in no shape to understand or comprehend the hospital document she was signing. She was legally blind and a bit doped up, and it remains unclear whether or not anyone read her the fine print.

So my mother accidentally signed away her future because the papers she initialed said she understood Medicare’s special rule: that patients “under observation” do not qualify for skilled nursing care.


A Fateful Mistake
Six weeks later my fiancé and I sat in mom’s room at the rehabilitation facility to which she had been transferred. She had done her physical therapy daily and every afternoon we did  EFT (Emotional Freedom Techniques, a form of acupressure) together over the phone.

The doctors were impressed with her progress. She worked hard because she wanted to walk down the aisle at her daughter’s wedding! We were finally going to take her home.

My mother held my hand and joked that my new engagement ring was so shiny she could now see clearly. She called each of her nurses and the rehabilitation staff into the room to show off the ring and her handsome future son-in-law.

Reports of my engagement spread like wildfire. Which is, apparently, how the billing manager discovered I was in the building. She barged into the room waving a wad of papers and demanded to see “the checkbook.” She said she’d “hate to put mom in collections…”

Cat and her mother, Marion

“My mother is fully insured,” I shot back. “We’ll take care of the paperwork at a more appropriate time.”

Suddenly, my mother was crying.

The woman who’d survived a world war cowered behind me, whispering that she didn’t know what she was going to do because the billing manager had been mean to her about the money for months. Assuming that there had been a mix-up, I ordered the billing manager to leave the room. Just then I turned and saw that my mother’s roommate was crying, too.

When I asked to see the executive director, I was told she wasn’t available. I went to her office anyway.

Apologizing for being so pushy, I explained that the billing manager had terrorized not only my mother but also her roommate. The director replied very politely that she would look into the behavior and assured me it was not their policy to harass patients.

I then turned my attention to the billing error. The director explained that since my mother had not been fully admitted to the hospital, Medicare’s 100 days of skilled nursing care had not been activated.

“Clearly there is some mistake,” I insisted. “Why would your staff admit my mother if she didn’t have Medicare coverage?”

“Your mother knew what she was doing when she signed our admission forms,” the director said. “She told us she has a savings account. She will be billed for our services.”

The walk back to mom’s room took a century. How was I going to tell her she’d made such a huge mistake? By the time I got to the room, I had resolved that we’d fight the system and do all we could to correct this terrible injustice. Mom was horrified to learn she’d signed away her rights and possibly her life savings but she too was confident we’d win in court.


The Dream is Broken
A week later we sat in the office of the best elder care attorney in town. Shaking his head in dismay, he told us that he hears stories like this several times a week. He was compassionate and gentle but advised us that there was indeed no mistake and there was nothing we could do except negotiate a better payment schedule.

I worked out a $100-a-month payment plan for my mother to cover the five-figure bill. The accounting department continued to send her phone calls and threatening letters. Unbeknownst to me, her spirit broken, mom finally wrote out a check to the nursing home for everything she had in savings, except for $1,000. But even paying the nursing home in a bulk didn’t begin to cover the total she owed for all the extra equipment and therapies they had offered her–and she had accepted–thinking she was covered.

So, for four years, instead of using her Social Security check to buy food, she spent it on her debt to the nursing home

When we visited, her house looked spotless, her clothes clean; she did appear thinner and weaker, but we chalked it up to age. Mom never let on to us that she was starving herself and isolating herself to pay her bills.

She grew apart from her church community because she couldn’t afford the cab fare to services. She became frail due to malnutrition and had trouble caring for herself.

Finally, a visiting nurse found my 91-year old mother collapsed on her tile floor unable to get herself up. When the nurse phoned me after calling for the ambulance, I insisted mom be rushed to a hospital that I had researched ahead of time that had a history of caring for the elderly. Then I called her primary care doctor and insisted he have her fully admitted. He took over her case and signed the papers himself. Mom was going to require permanent, long-term care.

Next, I called the executive director of the nursing home that had treated her for the fractured hip four years earlier. It was still the best in town. I politely, but firmly, told her that mom wouldn’t be returning in her current condition had the system not failed her and stolen her money. Placing the blame on the system and not the nursing home, I concluded by telling her that it was the facility’s ethical duty to help mom now in her time of great need.

This time the executive director offered compassion and care: Mom was admitted that same day.


Her Last Wish: to Help Others
Mom spent two years in the nursing home, often joking that this or that was hers, because after all, she’d paid for it with her savings. The truth was she was horrified to be on Medicaid—the federal and state program for those with low or no income or assets. But it was the only way we could get her care. She’d worked for decades, saved, voted, fought and prayed but she ended up living “on the dole”—a burden to society—despite all her best efforts.

My mother was a fighter but this is how it ended for her.

One day mom began to talk about how this situation had impacted her emotionally. She apologized for her mistake and what it had cost her and what it had cost us—the tens of thousands of dollars we pitched in for housekeepers and nurses so she could remain at home. Mom lamented that she was too old and frail to do anything about it, so she made me promise I’d tell everyone I could about this horrible Medicare rule and help others avoid her fate. At least a dozen times before she died I called her to say, “Mom! You saved another one!” and gave her the details of some friend or family member who had used her knowledge, her mistake to protect themselves. And she would say, “Well then, dear, my prayers have been answered and my pain has meaning.”


1. Understand the loophole Tell everyone. Shout it from the rooftops. Make sure your parents, siblings, friends, colleagues, and neighbors understand about the Medicare “Observation” loophole. Remind them to insist on being fully admitted should they or anyone they love be hospitalized. The rule: Medicare only covers skilled nursing facility care with a “qualifying” inpatient hospital stay. A qualifying inpatient hospital stay means your loved one has been a hospital inpatient, formally admitted to the hospital after their doctor writes an inpatient admission order, for at least 3 days in a row (counting the day of admittance as an inpatient, but not counting the day of discharge).

2. Protect your rights You have time to understand what you’re being asked to sign. You always have the right to have your attorney review any paperwork before you sign. Tests, medications, and assessments can, and often must, be administered before the doctor can choose the correct designation, that is, whether your status is “under observation” or “admitted.” Advocate for yourself or your loved one.

3. Understand your signature is permanent Changing the hospital stay designation after the fact is nearly completely impossible. The time to get it right is at the beginning, so understanding the process and taking the right actions up front is your best protection.

4. Make decisions from a place of calm Emotions are painful and powerful in the midst of a parent’s illness or injury. The worst decisions are made in overly emotional states. Learn processing skills like EFT, a self-applied acupressure technique, to help process stress and painful emotions like fear so you can make decisions from a calm, secure position.

5. Be prepared Engage an elder care attorney early. You will need one to create your power of attorney document when you need to take over the decision-making process for an impaired parent, but also so you have someone in place to handle a legal challenge if one arises. The phrase “my attorney will need to review” can be amazingly effective in securing the cooperation of medical and billing personnel.

6. Involve your parent’s primary care doctor Discuss the Medicare loophole with your parent’s primary care doctor ahead of time and make sure they will help obtain the proper designation if the need arises. The physician of record can sway things and if they have hospital privileges they have even more power. Have the same conversation with any specialists such as your parent’s cardiologist, surgeon or oncologist. At the time of hospitalization, call in all the troops and reference whatever issues or list of symptoms you can to secure the proper designation.

7. Review your hospitals Research local hospitals to determine how cooperative they are with admitting. Hospitals and doctors have quotas to meet and guidelines to follow if the doctor or hospital wants to get Medicare reimbursement. They are penalized for not obeying the rules. But different hospitals have different concerns about the rules. Same for doctors–who might be wealthy enough to forgo the reimbursement. Ask friends, your physician and even contact hospitals directly. Some will advise you about their policies up front. Write down the name of your designated emergency hospital on a card your parent can keep in his or her wallet. Make sure your parents know that if you are not there to advocate for them, they should insist on being brought to the designated hospital.

8. Confirm, confirm, confirm Check your loved one’s patient status daily until s/he is discharged. Sometimes doctors change the status, but sometimes hospital administrators press the issue forcing doctors to downgrade a patient during the stay. Remember, patients need to be fully admitted into the hospital for three days in order for Medicare to kick in. If that admission status changes at any time, the clock restarts.

9. Learn the lingo By law since March 2017, hospitals must advise you what the patient’s designation is and exactly what that means in terms of financial obligations and how that designation affects the patient’s insurance. But remember: the hospital isn’t there to protect your parent’s rights; it’s there to protect their requirements under the law and their own management. Terms like “downgraded to observation” could make it seem like the patient is getting better when in fact it simply means the patient has been switched to a lower status under Medicare. If they need to go to skilled nursing, they’ll have to pay out of their own pocket.

10. Work the system If you don’t get the proper designation, try again by checking out of the hospital and then in again a day or so later. A new hospital, another doctor or a new administrator might make all the difference. Or, sadly, a few more days might mean the condition has progressed enough to truly require more care.

11. Try again Even if your loved one does end up in a nursing home after an “observation status” hospital stay, voiding Medicare coverage, you can try to have them sent back to the hospital for a new stay and insist they be fully admitted. Once they are fully admitted for a three-day stay, the clock begins again and they can access their full 100 days of coverage.

12. What to do if all else fails Realize that skilled nursing care isn’t a stay at the spa and often it’s nothing you can’t do at home yourself. Exercises for the elderly are very simple; it’s the repetition that counts. Provided your loved ones can make bathroom visits themselves you might find taking them to your home or getting them in-home nursing is a better answer. Plus, many people find they heal better in their own home environment. If your loved one has no assets, many home-care services will be completely covered by Medicare or even Medicaid. Services such as bathing, wound care, meal prep and housekeeping can be obtained with just a few phone calls.

Have you been through a similar issue with this Medicare loophole? Do you have research or resources you’d like to share with the Covey community? Add your information and links in the comment space provided below. We will gather up everyone’s additions and publish a fail-safe guide on the subject.

Cat Stone is an AAMET credentialed EFT practitioner and best-selling author. You can learn more about her, EFT and her work at

  1. Judy Brooks

    Two years ago, after passing out in my seat at my grandchildren’s holiday concert, I “awakened” shortly thereafter with three parametics hovering over me. I was taken to a hospital in Burbank, California—a major medical center. My daughter followed the ambulance by a few minutes.

    After hooking me up to monitoring devices in a small ER room, an employee arrived from the admissions office carrying a clipboard with many papers. She explained I was being admitted as an “observational” patient. I asked what that designation meant to me. She explained it meant Medicare would not pay for my medications while there. I was on many daily meds. Having gone over the details of numerous hospital bills my husband had amassed, I knew the price they assigned each pill—his admissions always involved surgeries so there was no question about his admission designation.

    I took a calculated risk but I was quite certain they wouldn’t let me check myself out at this point because of possible liability if something happened to me after leaving. (I was a publicist and knew the media attention I could easily bring to the situation.) I told the clipboard lady I had a 90 day supply of my meds at home—bought and paid for by Medicare Rx coverage—and unless they allowed my daughter to bring them to me, I would not agree to this admission and sign the papers. She left then returned in a few minutes and agreed to do this. I carefully went over the pages to confirm what she said.

    I remained overnight after multiple tests and monitoring with a diagnosis I could easily handle with no further treatment necessary. When the bill arrived several weeks later, my 30 hours in the hospital added up to $29,000, all of which was covered by Medicare and my AARP supplement through United Healthcare.

    Hopefully, in similar situations, I hope this proves helpful to others before signing on the dotted line…

  2. Joanna Myhre

    Please email me this article. I will be 77 in a few months and am in poor health. I need to share this with my daughter. Thank you.

  3. Michelle Arnold-Yeager

    In February 2019, I was admitted to a local hospital with kidney stones, after being sent to the ER from Urgent Care. They said they were, in fact, admitting me for the night. Midmorning next day, I was brought papers to sign where they randomly mentioned, ‘oh you were changed to “under observation” status sometime during the night…I was given no option not to sign the papers, saying I would have to contact Medicare and my insurance for information on what was covered and what was not. She came in when I was alone, on Oxycontin AND Fentynal and hardly any sleep the night before and shoved all the paperwork into my hand saying that most of it was drug information and directions on home care after release…

  4. Linda

    I dealt with this twice. Once when my husband was dying. He had been admitted several times through the ER. For what turned out to be his last visit, also through the ER, they wanted him to be admitted on observation. We had to pitch a fit.

    Then after he passed I ended up in the ER. I was in the hospital for 4 days. They wanted me on observation too. The billing lady showed up and I refused to sign the papers. When the hospitalist came around he found they had put me on observation. He corrected it. Then, when I asked the next day to have it checked the admin had defaulted it back to observation. Please keep in mind these doctors are under great pressure not to admit someone. And after 3 “Midnights” (This is also important – it is not just 3 days) it does not roll over to admitted.

  5. Michele Unruh

    I am a Medicare Agent this was great information that I will share with all of my clients. I knew about the Medicare loophole, but I did not know if they downgraded your status the clock reset. Thank You for sharing

  6. Peggy

    It’s not just for Medicare they are doing the same for insured. It just changed what felt like overnight. I was in for a gall bladder removal and the dr. Off handily said “oh, we admitted you.” I thought to myself “of course you did I am having emergency surgery!”

    That’s when it dawned on me something changed. My girlfriend’s parents were aging and going to the hospital. The first thing I said was “make sure she is admitted and not there on observation status.”

    So far I have been lucky, with gull bladder, appendix, surgeries they were emergency surgeries. My knee surgery was out patient. As our own advocates for healthcare we need to check our status as well.

  7. Jane

    The biggest argument to rectify this tragedy should have been that her mother was medicated when she signed the papers at the hospital. Most reputable hospitals will not allow someone pre-medicated or medicated for pain/anxiety to sign papers. The lawyer should have caught that.

  8. Gloria

    I’m a medical social worker and I’ve been in hospital case management for a little over 6 years where my role is solely focused on discharge planning. I agree with majority of what you’ve shared and nothing makes a hospital Case Manager and/or Social Worker happier than having involved family members to advocate for their loved ones. It’s the role of the case management department to ensure patients have a safe discharge plan as well as an understanding of the CMS guidelines (Medicare/Medicaid). So it thoroughly upsets me that your mother was not only failed by the macro system of Medicare, she was failed on a micro level of by both the hospital and SNF admissions process (skilled nursing facility-we love abbreviations in the medical world) to not have checked what status she was prior to admitting her. Not all hospital networks operate the same, but most all should have a case management department and/or social services, especially with the way changes in healthcare are happening at such a rapid rate. As well, the SNFs I’ve worked with over the years have had an admissions team to evaluate the patient’s medical and financial picture. So, I’m surprised that the facility had not caught that and allowed her to admit anyway, but it could also be that because of the timeframe scenarios such as this occurred that they started being more diligent.

    There are additional things I’d like to add, address, or that you simply need to know for Traditional Medicare only (not managed care like Humana/United Health Medicare etc):
    1. Yes, you can try and insist on the doctor “admitting” your loved one, but if their medical criteria does not meet Medicare guidelines then they simply cannot, otherwise it is fraudulent. If your loved one has been in the hospital for over 24 hours and they don’t plan to discharge, then at that point start pushing, especially if they are thinking they will need placement and can’t discharge home.
    2. Once a patient is changed from observation to “inpatient” aka “admitted, they are not then downgraded back to obs. To get technical, they can downgrade further from observation to “outpatient” which is essentially equivalent to sitting in an ER bed but in the main hospital tower.
    3. If the patient does not meet “inpatient” criteria but does need rehabilitation (which should mean they were evaluated by Physical Therapy and Occupational Therapy, sometimes even Speech Therapy), ask to be evaluated by an Acute Rehabilitation Hospital, especially if the patient was independent prior to hospitalization.
    4. If the patient is safe to discharge home then Home Health Care can be arranged for a nurse, PT/OT, an aide to help with bathing if that company offers that service, and a social worker if necessary.

    Those are just some of the ways we work around the “loophole” to ensure a patient with Medicare has a safe discharge plan.

    Hope that helps!

  9. Elizabeth Connor

    Good article, but the relationship between being admitted and skilled nursing is not a “loophole.” The system is designed that way so that Medicare is not subsidizing the skilled nursing industry for conditions that require only “observation.” One can argue the value of that feature, but it’s how the system works. There is grievous fault here, but it is mostly on the part of the hospital administrators who did not explain the papers she was signing and on the part of your mother who signed papers she did not understand. The American health care system is a nightmare, agreed, and the fault lies with everyone who is not actively working to reform it.

  10. Donna Frankiewicz

    There is another issue to be considered. If a doctor refers you to a skilled nursing facility after a 3 midnight stay in a hospital as an inpatient, he MUST send you to the skilled nursing facility for “rehabilitation”. Medicare does NOT pay for simple long term care no matter what the situation. So, be sure your doctor is an optimist who believes you can be rehabilitated with physical therapy before you let him refer you to a skilled nursing facility. Believe me, I understand about “observation” and 3 day stays, etc., but this factor must be taken into consideration as well!!!

  11. Rose Coveney

    I believe that doctors and hospitals know exactly what they are doing and that will always be to THEIR advantage, not the patient who they could care less whether you live or die. It’s what they can bring to the bank and to make their shareholders happy. Just business as usual.

  12. Esther

    I was a social worker in a hospital prior to retiring. Yes, it is important for patients and family to be aware of the Medicare rules and to talk to a doctor at admission about the basis for admission. However the form signed acknowledging knowledge of admission status was not the issue. The medical judgment had already been made at that point by the doctor/hospital. Medicare has criteria that has to be met for a patient to be admitted under inpatient status and it is the doctor/hospital who has to determine if the criteria are indeed met. If the criteria are not met, then the patient can still be admitted under observation status, which is officially an outpatient admission. Also some advantage plans under Medicare will waive the 3 day requirement, so it’s also important to understand if you have “straight” Medicare with a supplement or if you have an advantage plan and if the latter, their policy on funding rehab if the 3 day inpatient stay is not met.

  13. Gerry Draughon

    I was told once that Medicare would not pay for “any” services unless si stayed in the hospital overnight! Seems as if this is not true the? I would have to stay in the hospital over three days?

  14. Michaele

    This is great information, however, you cannot change the diagnosis you are being treated for, and lying or giving false information to obtain an admission versus an observation stay is insurance fraud and can get you into big trouble. Also, a physician won’t admit you if the diagnosis doesn’t fit the criteria for admission, he/she could be charged with insurance fraud as well and they are not going to put their medical license on the line. Be careful.

  15. Debbie

    I am 60 and I am really scared of starting Medicare. I have spoken with a girl my age at work that is my age, she says the same. Seems like if you have been under a Doctors care on traditional ins then go on Medicare, they want you to either lower your dose or stop taking. My son was a paramedic for over 10 years. He got tired of watching the elderly get abused so he started his own transport company. He has at least 40 dialysis patients, Medicare will deny payment on a patient that has no legs and is on dialysis 3 days a week, they actually said he has a good gate and can be driven in a car. He feels so badly for these patients and he loves his patients but Medicare will soon put him out of this business. He said some of his patients will not have a transport and they will die, seems like this is what is wanted in this country. Why do we not take care of our elderly. It is a crying shame.

  16. Jorge Assandri

    I believe you because this system is created for the rich. We don’t count. They think that we are disposable. Shame on this system.

  17. Barbara McCarthy

    What everyone is neglecting to recognize is the financial incentive that doctors and hospitals have. When a patient is admitted for 3 midnights or more, the charges for services rendered to Medicare patients are “adjusted” to the lower Medicare negotiated amount which can be considerably lower than actual costs. In some cases this means the doctors and hospitals lose money. Now no doctors or hospitals want to lose money so instead of admitting a patient they keep them under observation.

  18. Deena M. Taylor

    This is such valuable information. Anyone who thinks the government should take over healthcare ought to read it.

  19. Phil Church

    Oh, by all means, let’s turn over Medicare to the tender mercies of millionaire health insurance executives. If we want better Medicare get a Democrat back in the Wbite House.

  20. Shirley Gurganus

    Please email the whole story to me.
    Thanks so much for sharing and helping others.

  21. Tony Tran

    I work as a hospitalist, and unfortunately I see this dilemma all too often. This is a great post, and highlights many frustrations that we share as well. There are a few things I want to add…

    1) First to dispel a myth that doctors profit from denying patients “inpatient” status. Doctors and direct health care providers nowadays do not directly profit from inpatient vs observation. In fact, many who work as an employee of the hospital, or of a group contracted by the hospital are paid either hourly or by salary, and hence, the admission status of a patient has no direct impact on the decision making process of “observation” vs “inpatient”. In fact, majority of physicians and nurses who work strictly at a hospital (as oppose to running a private practice) are kept in the dark about hospital billing practices (whether intentional or unintentional is hotly debated).

    2) Certainly, some providers are more aware of and knowledgeable about the nuances of Medicare criteria, or more sympathetic than others in fully appreciating the financial constraints on patients. However, simply requesting admission instead of observation is not always that easy or straight forward. Families of loved ones can demand “inpatient” status all they want, but that determination has been set forth by Medicare guidelines. Patients must fulfill these established criteria to officially meet “inpatient” status. To admit as “inpatient” when there is no clear indications to do so will constitute Medicare fraud. However, these criteria are often quite black and white, and is often frustrating, both to the patient and their families, as well as the admitting doctor.

    An example:
    An elderly person living alone who had fallen, and has pain too severe to safely return home, but has no evidence of fracture or laboratory abnormalities may not qualify as “inpatient”. The sympathetic admitting doctor may try to advocate that patient has no support system, and will be in “grave harm to self” if she/he was to return home in such condition, and may still admit under “inpatient” when it is a shakey argument at best in the eyes of Medicare. If there is any question as to the status, the case goes to a secondary review, and that review can determine still that the patient in fact does not meet “inpatient” status. In these cases, utilization review can reverse the admission order to “observation”. It’s not impossible, just a difficult process that the hospital case management has to do to ensure it is not in violation of Medicare guidelines. This is known as a condition code 44, when hospital utilization review has determined that the “inpatient” admission was not “medically necessary”, regardless of how the admission doctor “dressed up” the admission diagnosis.

    3) I have worked at over 10 hospitals in 3 states for almost 10 years. My conclusion: ER doctors are good at what they do, but they are overwhelmingly bad at projecting inpatient vs observation status. (There are a few gems here and there). What does this mean? When majority of people present to the ER for their emergencies (as opposed to being directly admitted, by pre-approved process), there can be a lot of misinformation given, especially for those patients who may not clearly be “inpatient”. Often times, the ER doctors get this wrong as well. And it is easy to understand why. ER doctors are in the frontline. They stabilize, they treat. And they dispo: home, transfer to another higher hospital, or discharge home. They almost never deal with the hassle from the hospital utilization reviewers hounding them about a patient’s admit status. So they often give wrong info to patients and their families regarding this.

    All too often, a family can no longer care for their ailing and frail parent. They bring them to the ER. The patient may not have much more than an uncomplicated UTI that did not manifest in signs of sepsis ( hence, not an inpatient admission). The patient may “look dry” but vital signs and laboratory work are all normal (hence, no clear objective support for “dehydration”, a inpatient diagnosis). Nevertheless, family is expressing interest in placement to a SNF, and the hapless ER Doctor reassures the family the they can “observe” the patient overnight, and then case management can look to place them at a SNF the next day. I cannot even count how many times I had to correct the ER doctors about this error. So much so that I just instruct them not to tell the family anything about placement any more.

    The best way to inquire this is to ask the case manager and/or hospitalist to explain in what ways (by means of laboratory, hemodynamics and vital signs, and/or diagnosis by means of imaging studies). If the family is educated as to why or why not their loved ones meet or don’t meet inpatient criteria, and understand the potential financial consequences, then they can come up with more appropriate and informed solutions.

    • lesley

      Wow Tony. What a wonderful addition of information to this story. Everyone needs to read this. Thanks

  22. Steve Berner

    This sounds a bit fishy to me. I find more holes in the story than I do in Medicare (which I know is flawed). I would be happy to go through the problems with this story if there is any real intrest.

  23. BW

    Sadly this is true and happens often but the article implies doctors have a choice in the matter. Insurance companies set strict criteria for obs vs inpatient. As an ER doctor I’ve admitted patients to the ICU who don’t meet inpatient criteria. Fight for better laws for doctors to use their judgement – right now the admins call and tell us x patient doesn’t meet inpatient criteria

  24. Lorraine Wetherington

    I have a friend whose mother fell and broke a hip. She was admitted to a rehab center for physical therapy after hospital discharge. She was given papers to sign they could put a lien on her house for whatever the insurance didn’t cover. She signed them. This lady was elderly and didn’t understand. After she realized her house was going to be confiscated instead of being left for her adult children, she realized what she had signed. They all cried over this. She did have Medicare.

    • lesley

      What a terrible story. We just don’t understand how health care can strip people clean of all of their possessions.

  25. Gale

    Yes, you have to be admitted as inpatient to meet that qualifying three midnight rule, BUT you have to meet criteria for inpatient status. Both insurance companies and Medicare use criteria sets to determine the appropriate status for admission. And as someone mentioned above, knowingly allowing a patient to be admitted as an inpatient, when they do not meet inpatient criteria, is fraudulent. Sometimes the criteria can be difficult to meet. It would be great to see that three midnight rule removed, Inpatient and obs statuses eliminated and just stop playing this $ game.

  26. Kay

    You have failed the public by implying that the HOSPITAL determines this observation or inpatient status. In reality, it is a complicated list of criteria that the patient’s condition must meet before any Medicare, Medicaid, or insurance will pay. Physicians, hospitals, and patients have no choice in the matter.

  27. Carolyn Griffin

    I spent one night after surgery four weeks ago. I have not seen the bills yet, but wonder if it ends up as observation and I have to pay?

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