Hospital insurance can help fill gaps after Medicare observation
billing
By Karla Walsh
A hospital stay is stressful enough without additional billing
woes. But more seniors are facing unexpected expenses when Medicare’s
observation billing doesn’t land in their favor.
Medicare laws state that inpatient stays, including short-term hospital care,
must last three days or longer to qualify for
Part A coverage. And more and more doctors are placing patients
under “observation,” an outpatient status, instead of admitting them to the
inpatient ward.
Does Medicare
typically cover hospital observation?
In 2012, the average short-term inpatient stay cost Medicare $5,142, compared
to $1,741 for a hospital observation stay. During fiscal year 2014,
nearly 750,000 hospital stays were deemed outpatient — an 8% increase over the
previous year. Medicare spending on hospital observation has jumped from $690
million in 2011 to $3.1 billion in 2016, according to a Forbes report.
“Medicare covers hospital observation under Part B because they consider it as
outpatient coverage,” explains Erin Bueltel, product specialist for Medico
Insurance Company, but Part A only covers hospital care when you’re admitted as
an inpatient.
That means patients who don't have Part B Medicare coverage would be
responsible for 100% of the observation bill.
What Your Insurance Covers for Hip or Knee Replacement
Why do doctors place
patients under hospital observation?
“A doctor may put a patient under hospital observation if their
condition is serious enough to be monitored by medical professionals, but it is
not critical enough for inpatient care,” Bueltel says.
Conditions that need monitoring through hospital observation may include, but
are not limited to:
·
Blood clots
·
Severe shortness of
breath
·
Certain heart
conditions
·
High fever
“For the most part, observation should not exceed 24 hours, but
in some cases, it can go up to 48 hours or even longer,” Bueltel says.
Doctors want to provide ample care to their patients, but many feel stuck. The
hospitals they work for don’t enjoy placing patients under hospital observation
because they make less money. Yet doctors must follow strict government guidelines about what
is worthy of a hospital stay and what Medicare will cover, or they could face
large penalties.
What are patient
rights for Medicare gaps in hospital insurance?
Since hospital observation was becoming more common, laws
changed in 2017 to ensure that patients have more rights. If you’re placed
under observation for 24 hours or more, your hospital is required to provide
a Medicare Outpatient Observation Notice (MOON)
that defines why you’re being observed and what the status means financially.
As a patient, you are unable to appeal this MOON directly to Medicare, although
you are allowed to:
·
Ask your doctor to
admit you with inpatient status.
·
Ask for a written
explanation of why you’re under observation.
·
Remind your doctor of
the difference between coverage in terms of Medicare observation billing.
How can Hospital
Indemnity insurance help with Medicare gaps?
“Medico’s Hospital Indemnity insurance was designed
to fill the coverage gaps that other plans create through copays and maximum
out-of-pocket costs, as well as services not covered,” Bueltel says.
It’s important to find a Hospital Indemnity plan that will pay the same per-day
benefit for observation and inpatient services, even when you receive
observation care and leave the hospital without inpatient admission, Bueltel
says.
“For instance, if you selected $300-a-day to meet your hospital copay on your
Medicare Advantage, even if you are only in observation, Medico will pay you
$300 for each day you are in observation. This will help cover any copay costs
associated with outpatient care,” Bueltel says. (Refer to your plan benefit
summary to see what your Medicare Advantage plan pays for outpatient care.)
How Hospital Indemnity Insurance Fills Medicare Advantage
Gaps
To learn how Medico’s Hospital Indemnity insurance plan can help
fill your coverage gaps and if it’s available in your state, visit the Hospital Indemnity page. You may also request
a personalized, free quote, or call 888-755-3066
to speak with an agent.
Medico Insurance Company disclosures
This webpage is intended to provide a general description of the policy
benefits. Policy provisions and benefits may vary from state to state. Please
see the policy and riders for complete details. For costs and further details
of the coverage, including exclusions, restrictions, or limitations and the
terms under which the policy may be continued in force or discontinued, see
your producer or contact Medico. Pre-existing conditions are not covered during
the first six months after the policy date (may vary by state). To be eligible
for benefits, you must receive medically necessary covered care, as defined in
the policy.
This is a solicitation of insurance, and a licensed agent/producer may contact
you. THIS IS A LIMITED POLICY. If there is a discrepancy between the webpage
and the contract, the contract language prevails.
This policy is not major medical insurance and is not a substitute for major
medical insurance. It does not qualify as minimum essential health coverage
under the Federal Affordable Care Act. If you purchase this policy only, you
will not satisfy the federal requirement that you have health coverage, which
has been in effect since Jan. 1, 2014.
1In Pennsylvania, "hospital confinement" is called,
"hospital confinement indemnity insurance." In Arkansas,
"hospital indemnity insurance" is called "hospital confinement
insurance." In Colorado, "hospital indemnity insurance" is
called "fixed indemnity insurance policy." In Utah, "hospital
indemnity insurance" is called "hospital limited benefit indemnity
insurance policy." In Virginia, "hospital indemnity
insurance" is called "limited benefit hospital indemnity insurance
policy."
2Optional benefits are not available in all states.
3In Iowa, this rider is called, "Nursing Facility Benefit Rider."
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learn more.
HIP-001A
02-25-20
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