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!
NEWSLETTER | FORUM | TWITTER
FACEBOOK | CONNECT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Photo © Photos.com / Jupiter Images
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
Tru
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
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!
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.
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!
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.
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!