Interviewer: How you were admitted to the hospital may affect how much you owe. Don't be surprised by the bill. I'll tell you what it means and what questions to ask next on The Scope.
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Interviewer: I'm here today with Dr. Russell Vinik. Dr. Vinik is an internist specializing in hospital care. He's also the head of the utilization review committee. What this committee does is it works between the hospital and doctors to see that patients get the right bill. Russell, tell us about how one is admitted to the hospital and how that can affect how much a patient pays.
Dr. Russell Vinik: When people are admitted to the hospital their doctor has to choose what status to put them in. A lot of people think that if I'm coming in and going to spend the night in the hospital I would be considered an inpatient, but there are actually two different statuses. There's inpatient, and then there's the other status of people expected to have a short stay that are typically billed as outpatient, and that really makes a big difference in how they are billed.
Interviewer: I would think that most people wouldn't even be aware of the differences in these categories. This doesn't make sense.
Dr. Russell Vinik: Yeah, and it doesn't make sense. The way that most insurers, including Medicare, are set up is they have very different payments, and they have bundled payments when people come into the hospital as inpatients. Whereas if they're outpatients Medicare has what we call Part B that does that payment, and it's typically billed as a percent of what's charged. Then, the patient is responsible for a percentage of that copay. If they're put in an outpatient procedure they usually have a higher copay to pay depending on what kind of supplemental insurance they have.
Interviewer: How much higher charges can a patient expect if they're billed under this observation status you're telling us about?
Dr. Russell Vinik: It depends on what procedure or what they're in the hospital for. If it's just for monitoring and they're not having many invasive tests it may be only a few hundred dollars. If they're having a major procedure like a pacemaker or a defibrillator placed, those can be upwards of $50,000 for the procedure, and if their copay is 20% that's a big...
Interviewer: That's a big hit. That's a really big hit. I would bet that most people aren't even aware that they could be responsible for that if they're admitted to the hospital.
Dr. Russell Vinik: They can't, and a lot of patients just don't understand the rules. Medicare has its own set of rules right now which says that inpatients are typically patients expected to require two midnights in the hospital. Every other insurance company has slightly different rules, so it's very important for patients to know what their benefits are, and if they are scheduled for a procedure to know whether it might be an inpatient or an outpatient procedure.
Interviewer: So, buyer beware. They should ask what their benefits are. That's one of the things I'm getting from you. Is this mostly Medicare that we're talking about?
Dr. Russell Vinik: This is mostly Medicare, but every insurance company does make this distinction between inpatients and outpatients. Medicare patients typically have a higher outpatient deductible and copayments than a lot of private insurance plans, and this is where a supplemental plan can help pick up those deductibles.
Interviewer: You mentioned this two midnights rule, and there have been some stories in the press about this new two midnights rule. Can you tell our listeners about that just a little bit more.
Dr. Russell Vinik: Prior to October 1 of this year Medicare and most insurance plans used what we call medical necessity to decide if a patient needed to be inpatient or not. That depended in part on how long they were expected to be in the hospital but in part on how sick they were, how intensive the services that they were getting in the hospital were going to be. You can imagine that's a hard thing to figure out. Medicare tried to simplify it a little bit and said in general patients who stay in the hospital two midnights or more are considered inpatient. They don't want hospitals to just keep everybody two midnights, so you still have to need to be in the hospital for two midnights and be getting care that can only be done in a hospital.
Interviewer: I also understood from some of the articles that I read that patients admitted under this observation status might not be eligible for rehab.
Dr. Russell Vinik: Right.
Interviewer: So, if they came in with a broken hip, and they had that repaired, and somehow they were under observation status they would have to front most of the bill, I would think, for the rehab.
Dr. Russell Vinik: Medicare has a rule that says in order to qualify for skilled nursing facility placement you have to be in the hospital as an inpatient for three midnights. A patient, and we've had this happen, who might fall, didn't really break anything, they're not well enough to go home but not sick enough to need a major operation, they don't often meet that rule. It puts a lot more burden on the patient and their family, because the doctors are forced to comply with these rules. They can't keep a patient for three nights just so that they can get them into a care facility.
Interviewer: What should a patient do to better understand this categorization?
Dr. Russell Vinik: Most important is to know your benefits. There are certainly lots of different insurance plans out there. Know your benefits. Ask your doctor if you're going to be an inpatient or an outpatient. If there's a question you can always appeal if you don't think your doctor is doing the right thing. There are appeal rights for just about every insurance plan as well as Medicare.
Interviewer: Russell, other than knowing your coverage and your status as a patient, is there anything else you can do to sort out whether you belong in inpatient versus observation status?
Dr. Russell Vinik: It's a hard thing. If you're unsure, it's always a good thing to ask your doctor about, and they can help. Unfortunately, doctors are being put in a difficult position by the insurance companies and by Medicare. They have a set of rules they've got to follow. If they don't follow those rules they could be accused of committing fraud, so they really have to follow these rules. Sometimes there's a little bit of gray area where a patient might go one way or the other, and that's where a discussion with your doctor can help. Doctors are being forced by these insurance companies and Medicare to follow their rules.
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