A federal court ruled that hospitals may retain a patient in their building under “observation status” rather than formally admitting them, and that such “observation status” does not count as a hospital stay for nursing home Medicare qualification purposes.
Medicare (not to be confused with Medicaid or Title 19) provides a limited nursing home benefit. If a nursing home resident spends three nights in a hospital and then is discharged to a nursing home for some type of rehabilitation services, the nursing home resident is entitled to Medicare benefits at the nursing home for up to 100 days. Medicare will pay the entire bill for the first 20 days and, for the next 80 days, Medicare will continue to pay a portion of the bill and the nursing home resident must pay a portion. In 2021, the nursing home resident must pay $185.50/day and Medicare pays the balance (many nursing home residents have a Medicare supplemental insurance policy to cover the $185.50/day). The Medicare benefit can save a nursing home resident tens of thousands of dollars.
So what does “observation status” have to do with all of this?
Under Medicare regulations for hospitals, if a hospital admits a patient and Continue reading