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Hospital re-admittance fines have unintended consequences to seniors’ wallets

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Beginning this week, Medicare will fine hospitals that have too many patients readmitted within 30 days of discharge in an attempt to save taxpayers’ money under the new health care law. The penalties are expected to be around $125,000 for each facility. So, how do hospitals avoid the fine?  They do so by choosing to not admit the patient in the first place or by changing their status retroactively before discharge by holding patients under ‘observation status’, with profound consequences for seniors.  Essentially, when a person is released to a rehab center following a hospital stay, Medicare will cover the costs IF the patient has spent three midnights in the hospital and the doctor releases the patient to the rehab center to get physical, speech or occupational therapy before being allowed to return home.  Patients held under observation status and subsequently transferred to a nursing home are NOT covered by Medicare as the requisite 3-Midnights rule in a hospital is never met.  Even though the experience from the patient’s point of view is that of being admitted, they are in fact treated as outpatients, the patient will not be able to receive Medicare coverage in a rehab center and may face higher co-pays for their hospital stay.

How can you avoid falling victim to this hospital practice?  Be proactive.  Evaluate whether or not you have the time, inclination or skills to manage your care or that of a family member by yourself.  If the health problems you are facing are becoming too complex consider hiring a geriatric care manager.  Geriatric care managers are health and human services specialists who specialize in issues related to aging and elder care.  They can help seniors and their families with cost containment by avoiding inappropriate placements, duplication of services, and unnecessary hospitalizations.  As your private medical advocate they can negotiate and work through hospital bureaucracy.  Look to for a Geriatric Care Manager or go to to locate one.

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