While hospital patients may not be aware of the distinction between formal admission as an inpatient and mere \u201cobservation\u201d as an outpatient, Medicare rules treat those two designations very differently, and that is causing problems for patients, doctors and hospitals.<\/p>\n
Medicare pays the entire bill for the first 20 days of care in a skilled nursing facility, such as rehabilitation in a nursing home, but only if the patient was previously admitted to a hospital for at least three days. If the individual was instead placed under observation at a hospital, Medicare pays no part of the nursing home stay, which often costs well over $1,000 per week.<\/p>\n
Further complicating the matter for patients is the fact that hospitals are not required to inform patients of their status until they are discharged and are permitted to designate patients as being in observation at any point during their stay \u2013 even retroactively.<\/p>\n