Local view: Get admitted or pay a higher price at hospital
As an insurance agent who focuses on Medicare, it has come to my attention that hospitals around the country are engaging in, as a Medicare agent put it in a recent phone call with me, “highly unethical but not illegal” practices. I have had Northland clients affected by these practices at Essentia. What’s happening affects senior citizens greatly and can cause serious financial harm.
When a patient comes into an emergency room, whether via ambulance or walk-in, some hospitals are now choosing not to admit them even if they need to be kept overnight. The patient is informed he or she is being kept for observation. The consequences are explained, and the patient is asked to sign something; however, most patients are not in a position physically or mentally at that point to understand the repercussions of not being officially admitted to the hospital.
Why would some hospitals do this?
A recent News Tribune article explained how Medicare will be decreasing reimbursement rates to some Northland hospitals because their patient outcomes are poorer than the standard set by the federal Affordable Care Act, or Obamacare. The non-
financial repercussion is that an outcome can’t really be tracked if a patient is never admitted. Financially, hospitals can make more money when they do not admit a patient.
When a patient is admitted to a hospital, Medicare requires the hospital to accept a single daily rate. All tests, procedures, services and medications must be covered under this single rate. Whereas, if a hospital does not admit the patient, the hospital is not required to follow inpatient rates and can instead bill individually for all services and medications on an a la carte basis as outpatient services.
This places the onus of paying for any co-insurance and medications directly on the patient. Even if a Medicare patient has separate health and prescription-drug plans, Medicare health plans pay differently for inpatient services than outpatient. Usually there are higher co-pays for outpatient services.
Another issue is that hospitals do not have Medicare prescription drug plan pharmacies, or PDP pharmacies, so they do not accept PDP plans. This means people may be charged $5 per pill for standard generic maintenance pills like atenolol or HCTZ. In a PDP pharmacy, these meds could be purchased for less than $4 for a full month’s supply. If name-brand meds are needed, patients can be charged $25 per pill or more. Over-the-counter meds like aspirin, glucosamine, Tylenol, Advil, etc., all get charged individually and daily at a rate of $.50 to $15 per pill. A patient may come out of the hospital with a pharmacy bill of $500 for a three-day stay, and there is no recourse other than to pay it. Insurance might give a small reimbursement if the right papers are filled out but nothing near what is charged.
Many times hospitals will recommend a rehab stay in a skilled nursing facility following an original hospital stay. Under Medicare guidelines, rehab is covered only if there is a three-day qualifying hospital stay first. Observation stays are not qualifying stays.
My advice to all seniors is this: If you find yourself at a Northland hospital and are told you are going to be kept overnight, request to be admitted. If you are refused, ask to be released with documentation and a signature stating the hospital felt you were in good enough condition to be left on your own.
If a hospital tells you it wants to keep you for observation, beware; this could mean a great expense to you.
Daniel Matthes of Duluth is an insurance agent certified in long-term care.