Medicare changes are supposed to close loopholes that deny coverage

Tuesday, September 20, 2016

A new law and a lawsuit settlement are aimed at changing two controversial features of Medicare that have been very costly for seniors.

One issue involves the longstanding denial of coverage for patients who are determined to be “not improving,” but in a “stable and chronic” condition. In August, a federal judge ordered the U.S. Centers for Medicare and Medicaid Services to do a better job of informing health care providers that the so-called “improvement standard” is no longer in effect.  As a New York Times article says, “what matters…is maintenance.”

The settlement of a 2013 class action lawsuit specifies that Medicare must cover skilled care and therapy when they are “necessary to maintain the patient’s current condition or prevent or slow further deterioration.”

The other issue involves a new Medicare law that requires hospitals to notify patients that they may incur huge out-of-pocket costs if they stay more than 24 hours without being formally admitted. It has been common for patients to be held under so-called “observation status” without knowing it, while they racked up large hospital bills not covered by Medicare.    

The changes are explained in recent articles in the New York Times.

"Failure to improve" issue

"Observation status" loophole