Many patients who are receiving observation services believe that they have been admitted to the hospital until weeks after discharge when they get a substantial bill for their share of the services they received.
Patients who are receiving observation services often aren’t informed about their status and what it means, says Peggy Rossi, BSN, MPA, CCM, an auditor and trainer with California Health and Wellness.
“If a patient is in a hospital bed on the unit, they are likely to believe that they are inpatients and that bill they get for their copay is a shock,” she says.
Observation can be a financial burden on Medicare fee-for-service beneficiaries, Rossi adds.
Patients who receive observation services are outpatients and have to pay their co-insurance, which can be higher than the deductible for inpatient care. In addition, patients in observation have to pay for “usually self-administered” drugs, even if a medical practitioner administers the drugs, Rossi says.
In addition, observation days do not count toward the three-day inpatient stay required for Medicare to cover a skilled nursing stay when patients need it.
As patient advocates, case managers have a responsibility to notify patients that they are receiving observation services and what their financial responsibilities may be so they won’t be surprised when they get a bill, says Jean Maslan, BSN, MHA, CCM, ACM, managing consultant for Berkeley Research Group.
“It helps the patient and helps the hospital in the long run. If patients get an unexpected bill, it could affect their responses on patient satisfaction surveys. The Centers for Medicare & Medicaid Services includes patient satisfaction scores in its pay-for-performance measures. Not keeping patients informed about their status and their financial responsibilities could have an effect on hospital reimbursements,” Maslan says.
It is particularly important to educate patients on their potential financial obligations if they are not enrolled in a managed care plan, have only Medicare Part A coverage, or have Medicare Part B but do not have supplemental insurance to cover their copay, Rossi says.
Maslan suggests creating a short letter explaining observation and having patients sign the letter. “When patients are in the hospital, they don’t comprehend everything people tell them. Medicare beneficiaries often are on fixed incomes and it’s a big surprise when the bill comes,” she says. (For more on how one hospital notifies patients when they are receiving observation services, see related article in this issue.)
Another option is to use the CMS letter: “Are You an Inpatient or an Outpatient? If You have Medicare — Ask!,” Rossi suggests.
“Whatever method hospitals use, it’s critical for them to inform patients of their status and what their financial responsibilities will be, especially if patients will have a large copay. This eliminates surprises when the bill arrives,” Rossi says.