Medicare reduces patient rights with the MOON Notice!

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In a move announced to improve patient rights, Medicare actually reduces patient rights, improves Hospital profits and leaves patient’s on the hook for huge medical bills!
Our in house expert on all things Medicare explains;

Assuming that each one of us has experienced being hospitalized at least once in our lifetime, most of us have probably heard the words “Observation”.

For those who haven’t, you should find this article “enlightening”.

First of all, I need to say that I am focusing this article on the Medicare Patient. For the purpose of payment, the Medicare Insurance program has two separate “Parts” and those are “Part A” and “Part B”. For the purpose of this article, I will be talking about patients who are Medicare Beneficiaries, and have become hospitalized and are now
“A Patient” who could be considered to be either an “inpatient” (Someone who has been admitted to a Hospital)or an “outpatient” (Someone who has become Hospitalized, but not considered to be “admitted”).

In short, I will be explaining the difference between the status of an outpatient “observation” Medicare Beneficiary, vs. an admitted, or “in patient” Medicare beneficiary, and the cost difference between the two.

Let me start by explaining that “outpatient” hospital stays are not covered under the “Part A” benefit like an inpatient Hospital stay would be. The “outpatient” or “observation” status patient will be accessing their “Part B” Medicare coverage, and this can be quite expensive.

The “observation only” status, when applied to a Medicare Beneficiary means that the Hospital will access the patient’s Part B benefits, which results in a SIGNIFICANTLY higher “out of pocket cost” for the patient [including for things like “diagnostic” tests, any type of treatments (think “Breathing” treatments here) and medications given to the patient, while in the hospital] which is WHY we should ALWAYS ask for an “itemized bill” after a hospital stay.

Many times an elderly patient is asked to “bag up all of their medications and take them with them” to the Doctor’s appointment, and then the Doctor ends up sending them to the Hospital. When that happens, the patient may end up taking some of his or her own medications, why not? It’s time, and they are right there. Very often there will be a “delay” in getting the medications that they routinely take from the Hospital Pharmacy, to the floor and to the medication dispensary. This delay often leads to self-medicating while in that “holding pattern” (or “Observation”) in a Hospital setting, especially when Adult Children are present.

Adult Children very often think that by doing this it may actually “save” Mom or Dad some money and they are right, it certainly should do that. However, here in the real world, very often when I look at one of my patient’s “itemized” hospital bills, I see charges for medications, and/or treatments that the patient never actually received.

For instance, the $29.90 charge (per pill) for the TYLENOL they never asked for, or the medications that the pharmacy sent down to the floor after the patient had already been discharged to home. So my advice, if you take anything at all away from reading this article, is to always request an “itemized bill” at the time of discharge to home, and if you forget, send the request to the Medical Records Department of the Hospital, in writing, as soon as you remember.

Now back to my original reason for composing this article in the first place. Observation vs. admitted status and the cost factor difference. This is where the “rubber has really met the road.”

Included in this article is information about the number of days that a patient may spend in “observation” status, and how that affects the patient financially, when they are transferred after three days in the hospital (Acute Care Facility) to a SNF (Long term care facility, or “Skilled Nursing Home”). If you are on “observation” only, and are not truly an “inpatient” the time you have spent in the Hospital does not count toward the “3-day hospital stay” rule, which is the requirement for Medicare to PAY for an inpatient SNF stay if the patient goes from the Hospital to SNF. For example – the patient who “thought” they were “in the hospital” (and may very well have been listed as such) Very often, a patient will transfer to a SNF, and based on the information from the Hospital, the SNF believes that the three (3) day requirement of “inpatient” status has been met.

Based on information received from the acute care facility (The Hospital) the SNF will accept, or admit the patient to the SNF believing that when they submit the claim to Medicare for payment, they will be reimbursed for those long-term care charges.

Many times this is when the SNF finds out that the claim was denied because the patient was not a “True Admit” or an “In patient” in an acute care facility (Hospital)and had not, in fact met the “3 day rule”.

So they submit a claim, and then that claim is denied for payment. That’s often a direct result of the Hospital’s claim being denied FIRST. When that happens, the Hospital may have just “changed” the patient’s status (from “inpatient” status, to “Observation” status) and then re-submitted the claim. This happens so that they can get reimbursed for the care provided during the hospital stay.

I’m not saying that I think that this is “ethical practice”, but then that’s really none of my business. It’s also important to note that the status of “observation” vs. the status of “Inpatient” generates more revenue, as it is billed at a higher rate. This also trickles down to the patient having a larger than expected out-of-pocket cost for that Hospitalization as well.

Remember…Greed is a powerful motivator. If the Hospital doesn’t have good management and oversight of the billing operations, this can be the “norm” for the billing staff.

Once the Hospital does that “change” of status, and the claim is paid, the second medical claim in line will be for the inpatient stay at the SNF, which will be denied, based on the patient’s status of “Outpatient” or “Observation Only”. So what happens now, you might ask?

Well, now Mom or Dad is suddenly “ready for discharge to home” and the Adult Child or Spouse is getting a “come and pick me up call”. I am not saying that this is ethical practice; I’m only talking about personal, first hand experience. Years of it.

Once Mom or Dad is back home, trust me, the BILL is already in the mail.

What if Mom or Dad isn’t “ready” to go back home? They are weaker, sicker, and more debilitated than when they arrived at the Hospital, and now the SNF wants to send them HOME?

Adult Children, with Children and most of the time with Grand Children and professions are suddenly thrust into the “Plastic Hallway” that is “Coin operated Care”. They have no idea where to even begin to look for help with Mom and/or Dad, and they need help ASAP. Or, an elderly and quite probably not so healthy Spouse is suddenly thrown into the role of caregiver on a whole new level. This increases the burden, leads to self-neglect and often sends the caregiver/Spouse to the Hospital, further complicating things. Statistics prove that this is the reality of the world we live in.

In summary, CMS has begun to enforce “The Moon Notice” or “The NOTICE Act” [Medicare Outpatient Observation Notice] beginning this month. CMS is attempting to enforce “The MOON Act” which requires hospitals to “inform” (both orally and in writing) patients who are receiving “observation” level services as an “outpatient”. This is only enforceable or effective once the patient has been in the Acute Care Facility, or Hospital, for “more than 24 hours”. Better known in the “Plastic Hallway” of medicine as the “2 midnights rule”.

CMS intention is that this will make the Medicare Beneficiary “aware” that they are in “outpatient” (higher cost) status, and are not considered to be a true admit to the Hospital, or an “inpatient” at the facility.

We all know that anytime you go to an acute care facility, or any healthcare facility for that matter, you get a LOT of paperwork (and in today’s world, it may all be on a computer screen and not paper). Once you complete signing because, after all…you are there because you are not well. Certainly you are not functioning at your best. If your Spouse is accompanying you, they are also not well because stress knows no boundaries. Your wife, or Husband is very much distracted by your medical condition, and may not take the time to read everything they (or you) are signing in an attempt to get medical attention more timely. I often hear “I thought I would have time later to read everything I signed”. The problem is that you’ve already signed it. Now it’s legally binding.

So CMS is making an attempt to enforce “The MOON” Act (law) and this has resulted in some Hospital’s changing the documents that they are having you sign. CMS does require that you get the “MOON” both “orally and in writing” so why isn’t this Law, or rule not really having the affect that it was intended to have?

It’s really quite simple. Hospitals are very good at getting lots of signatures, and of course “orally” informing you of your “status” after being in a Hospital over 24 hours could happen, and I suppose you could remember it, and maybe even understand what it is that they are telling you. Yes, it could happen, sure.

I’m seeing Hospitals tackle the “burden” of providing the “written” notice of status, or “The MOON” by burying it deeply in the bowels of the “admission paperwork”. As for the rule to provide “The Moon” also in the form of an “oral notice” well, that is of course, ridiculously impossible to prove in a court of law, should you decide to “challenge” your healthcare bill. Who would know if it was or was not given? Your word against theirs and you were most likely “deemed” to be “ams” upon arrival to the facility. No, this does not mean “A Mini-Stroke” it actually means “Altered Mental Status” which certainly should legally bind the person requesting your signature on contractual documents to turn to your POA (Power of Attorney) for those signatures and initials. What if you do not have a POA? Or your POA is not present? Then the person requesting your signature can assess you and ask you a few simple questions and then “deem” you competent to sign for yourself. You might be asking yourself “how that is possible? This person is a clerk, he/she has no medical training, and certainly they can’t make this decision about my mental status”. Well, no. They actually can. With three simple questions, and a little bit of documentation and you are “oriented to person, place, and time” and now you are able to “sign for yourself” any document presented to you.

While the “MOON” Act (in writing) does meet the requirement of informing you, or the patient of his or her “status” while in the facility, the law, which was written with the best of intentions, and appears to be a “positive step forward” for CMS is actually inherently flawed.

Which brings me to the dark side to the “MOON” Act”? It actually does not give patients any more “rights” it simply works as a band-aid measure in hopes that the acute care facility will be morally and ethically compliant and apply it appropriately.

However, it also relieves you of your inherent “right to a fair hearing”. So that thing I said earlier about “taking the healthcare provider to court over your bill? That right no longer exists once you sign the “MOON” notice. Personally, I can’t see how that was written into the Act, but then again, they never call me first when they sit down to make these changes.

This extrapolates over into any charges created by being inpatient in a SNF after your hospital stay as well. The SNF can bill you directly if Medicare denies their claim based on you being “Notified” of your “outpatient” status while in “observation” in the Hospital.

Note that CMS did implement (in 2015) a way to determine patient status while in an acute care facility, or Hospital, by the implementation of the “2 midnights rule” which “establishes” the time-based criteria for determining if a patient is in “inpatient” vs. “outpatient” status. The 2-midnight rule also “authorizes” the attending physician to “order inpatient status” if, based on the Doctor’s professional training, they believe that their patient is likely to be hospitalized for two or more midnights.
In addition, this does allow physicians, on a case-by-case basis, to order inpatient status for patients who are likely to be hospitalized for only a single midnight.

So while the “MOON” Act seems to truly reflect CMS’ concerns about long outpatient stays, hospitals are not very likely to change their billing practices to appropriately comply with it. The fact that CMS has failed to provide interpretive, meaningful guidance on when an inpatient stay of fewer than two midnights is appropriate leaves the door open to interpretation when it comes time to pay the claim. Which, in case you’ve not noticed yet – it is the responsibility of CMS to pay the medical claims.

Your Physician can make professional, and medically necessary decisions about your patient status, however CMS continues to have claims reviewed by the same standards as before: short inpatient decisions are prioritized for review by Quality Improvement Organizations, and the specter of audits by Recovery Auditors (still known as RACs) remains. Should a RAC’s determination after review of a claim be that a “patient has been incorrectly classified as an inpatient” they will issue a denial and require that the hospital return most of the Medicare money for the patient’s Hospitalization, despite the fact that the services were medically necessary and covered by Medicare.

The bad outcome of this “MOON” Act is that it affects the most vulnerable members of our society, the elderly. Those on “Fixed Incomes” without endless amounts of excess cash. Hospitals may bill the patient for the services denied by CMS, but due to the “fixed income” situation, Hospitals face an inevitable inability to collect from the patient and that has resulted in them losing literally millions of dollars because of the denied claims and financial “take back” of payments after having a medical claim reviewed by RACs and other “claims payment contractors” who have retroactively reclassified short inpatient stays as outpatient observation, which partly explains why over the past 5-7 years more hospitals are reclassifying stays as outpatient vs. inpatient.

Lastly, I want to say that even though legislation has been introduced in Congress with bipartisan support to allow “observation days” to be counted toward the 3-day requirement, with the “Health Care Reform Act” it really has little or no chance of passing, at least not this year.

Insert the word “Medical” for “Music” and you’ve nailed it;

“The music business is a cruel and shallow money trench, a long plastic hallway, where thieves and pimps run free, where good men die like dogs. And then there is a negative side.”-attributed to Hunter S. Thompson

Kathryn F. Morrison