1. Health
Trisha Torrey

When Admission to the Hospital - Isn't - and the Cost to You

By November 30, 2012

Follow me on:

One of my patient advocate friends told me a horrible tale - one of those that is so off-the-wall that I knew there had to be more to it.  So as I began doing a little research and peeling back the layers of the story onion. It didn't take long before I knew I needed to share it with you.

The story was about her client who had outpatient surgery, but had no ride home from the hospital afterwards.  So she asked the surgeon if she could stay in the hospital overnight. He agreed, and admitted her.  Unbeknownst to either the surgeon or the patient, the hospital changed her status to "outpatient" and kept her there on "observation status."  A few weeks later, she received a bill from the hospital for $3400 for the overnight.  When she tried to appeal, she learned that because she had not been admitted to the hospital, her Medicare wouldn't cover the stay.  She's expected to pay that $3400 now, in cash.

When I first heard the story, I thought something must be wrong.  Why on earth would the hospital change her status?  The surgeon had admitted her, they had to take care of her in all the same ways whether she was considered inpatient or outpatient... so what gives?

What gives is our standard explanation for anything that doesn't make sense in healthcare:  follow the money.

It turns out that this woman, and this story, have become so standard that hospitals across the country have adopted the practice.  Instead of admitting a patient in the standard way, especially Medicare patients who come through the ER, they instead keep a patient on observation status for days, even weeks.  And then they rake in the cash from unsuspecting patients, far more money than they can make by filing for reimbursement.

Read more about how hospitals are using "observation status," the benefits to them of doing so, the detriments to you, and the steps you can take to try to prevent them from doing it to you or your loved one.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agree? Disagree?
Share your experience or join the conversation!


. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Photo © Photos.com / Jupiter Images

December 6, 2012 at 4:08 pm
(1) Tru says:

This is by far the most lowest of the low, I automatically would have thought that since the woman could not go home the same day that they would at least change the visit to inpatient and ensure that they obtain an authorization before allowing the woman to stay. Its interesting to know that they would just “assume” that it is an overnight observation status.

As a surgical scheduler it was VERY VITAL to make sure that we had the proper “stay” type and we were responsible for authorizating all over night stays and if the insurance did not cover it the family was notified ahead of time. Although, its the insurance co and medicare that charge the provider based on what services they perform its still should be standard for hospitals to warn patients about any possible charges. I know maybe I live in a “perfect world” but layman persons rely on professionals to be upfront most especially if they trust that they are receiving the best care.

Powerful message


December 6, 2012 at 4:55 pm
(2) Bob Fenton says:

Trisha, “Follow the money” is too polite. Greed is more fitting. By classifying the patient as an outpatient for observation, problems are avoided later if readmission is required. This will not count against them in the computations by the Centers for Medicare and Medicaid Services and therefore they will qualify for more money from CMS. It is therefore a two way street, profit on one end and more profit on the other.

This is called “gaming” the system and part of the reason our healthcare system is also headed for the financial cliff at ever increasing velocity.

Thanks for trying to inform people. Bob

December 6, 2012 at 9:45 pm
(3) Bob James, M.D., J.D. says:

Trish: This has become a MAJOR problem for patients all across the country. It is a problem that patients know nothing about until it’s too late. Thanks for sharing this information with the unsuspecting public!

December 7, 2012 at 8:43 am
(4) Steve says:

Welcome to the healthcare scam. Similar “wallet extraction” procedures have been going on for years. Mental health treatment facilities will keep you a full 28 days because that’s what your insurance will pay for even if you don’t need it. The 27 day cure is notorious.

Rehab centers can “slow down” your progress so that they can get the full 20 days allowed by Medicare. Add to that they will tell you that the patient (your mom or dad) needs more time to “rehab” after the 20 days and encourage you to pay $150 per day to stay longer. If you ask why it is taking longer they blame the patient for being “sicker” or the real con “uncooperative” or the patient did not engage in therapy so its his/her fault. Blame the patient is a common con to extend care/payments.

Under “transaction healthcare” the providers are encouraged to keep you in a payment stream as long as they can. The tricks they use are clever and probably fly under the “fraud” category or even into fraud. The mission of the hospital/rehab is to extract as much money as they can before you are discharged. This includes soliciting “consults” from specialists who can also bill running the bill up even more.

Another scheme is to provide services that they know won’t be covered by a discounted payment from the insurance company. They can then bill the patient full retail charges. Medical devices are a big money maker. Fancy air compression leg devices are an example of a $1000 retail item that works no better than $5 compression socks. That’s why insurance companies won’t pay for them. the patient then must pay the grand.

Some consulting specialists don’t sign up for any insurance plans because they know they can bill the patient full retail. On radiologist explained this scheme to me 20 years ago. And the list goes on.

Thanks for exposing one of the many schemes used to separate sick/injured people from their money.

December 9, 2012 at 5:53 pm
(5) gemdiamondintherough says:

I know that each care facility, must stay in business. But this is intentional “fraud”. Not only that, but it sounds like they were not actually carrying out the Doctors order!!!!!!!!!!!
On the flip side of the coin, when you actually need more care, you have to figure out a way around the system.
The whole thing is just structured wrong!!!!!!!!!
INSURANCE IS PRACTICING MEDICINE! Not that there do not need to be checks and balances, but in the end, the medical professional is not ALLOWED TO USE THEIR OWN HEAD! The insurance writes the rules!
REALLY! Something seems very wrong with that also!

December 18, 2012 at 10:52 am
(6) Jeff says:

She went for the surgery knowing she didn’t have a ride home? Shame on her!

Admitting her to the hospital would be insurance fraud, since it was an outpatient surgery and (I assume) no complications.

March 4, 2013 at 9:52 pm
(7) Mari says:

I have had numerous “outpatient” surgeries and with every one of them I have had to have someone there with me who would drive me home afterward or the procedure would be cancelled. I had to sign saying that I understood this and the person driving me home had to remain present while I was undergoing the procedure. This solves the problem of someone not having a ride home after a procedure.

In fact, after every hospital “admission” I must acknowledge that I have adequate care at home and that the Case Manager has inquired as to how I will manage once I am discharged.

Now I know why they have these practices!

December 5, 2013 at 2:17 pm
(8) DJS says:

Trish-You state that a patient advocate friend told you a” horrible tale.”

What is horrible about this “tale “ is that this woman believed that Medicare should foot the bill for an unnecessary hospital stay.
because she didn’t have a ride home.
I live alone, and have had trouble finding someone to pick me up from outpatient surgery on several occasions. I would NEVER have asked
for Medicare or any other insurance company to cover a $100 hospital stay,let alone a $3,400 hospital stay.
This woman deserves the $3,400 lesson she got by attempting to commit Medicare fraud. The surgeon should split the bill with her for authorizing an unnecessary hospital stay.
Hospitals’ placement of those who are actually in NEED of hospital care who are placed under observation status ,sometimes for a lengthy period of time, rather than admitted,not apprised of this, and then
not only get stuck with the hospital bill, but possibly a re-hab bill which will not be covered by Medicare because Medicare will not cover post-surgical re-hab for a patient who has not been ADMITTED to the hospital, is a “terrible thing.””
A woman using a hospital as a Hotel and expecting Medicare to foot the bill ?! Pretty horrible.
I am shocked that you missed the obvious wrong in this, Trish. I’m very disappointed.

December 5, 2013 at 2:37 pm
(9) Trisha Torrey says:

You know, DJS – you do have a good point. You are absolutely right that no patient should be using a hospital as if it were a hotel.

But in your zeal to show me the error of my ways, please don’t lose sight of the real problem that observations status is being used by hospitals to gouge patients and the system. A nurse told me yesterday that she knew of a Medicare patient who was unable to stand up, much less walk, and was kept on observation status for 5 full days. There was no intention of using a hospital as a hotel – not at all.

The “terrible thing” is that hospitals are so willing to make money in ways so detrimental to their patients. That’s the key.

Also, just so you know, I have access to information that shows me that the second comment you sent under the initials LB indicate you are the same person. There’s no sense in trying to chastise me twice using two identities, especially when you hide behind initials and don’t share your name. I have deleted your second not-so-anonymous diatribe. I got your message loud and clear the first time.

December 5, 2013 at 8:38 pm
(10) gemdiamondintherough says:

It is a SAD commentary on our society. I do not know what happened to the integrity, honesty, and trustworthiness???
I do believe you may see this happening more at smaller institutions. At least that has been my experience. As soon as able I plan on speaking to the correct people. I feel an ethical obligation, being part of the medical community. If it is happening to me, it is happening to others.
The bottom line is that eventually, the establishment will figure out the loopholes. Some of us try to follow the rules, while others are spending their time seeing how they can get out of them???
I do know that these institutions need to stay in business, but at the expense of an individual. I do call that GREED.

December 6, 2013 at 2:05 am
(11) Bob James, M.D., J.D. says:

I can’t say I enjoy reading all of the sad tales that Trisha publishes but just wait. There will be an onslaught of sad tales in the not too distant future.

Leave a Comment

Line and paragraph breaks are automatic. Some HTML allowed: <a href="" title="">, <b>, <i>, <strike>
Top Related Searches
  • admission
  • ©2014 About.com. All rights reserved.

    We comply with the HONcode standard
    for trustworthy health
    information: verify here.