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Milton hospital offers guidance on paying for 'observation status'

Posted by dinouye  April 25, 2013 04:04 PM

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It was one of the worst days for an 83-year-old woman to take a fall – Feb. 8 – the day of winter storm Nemo.

But that is what happened to Ann T. Gillis of Milton. She knew she was in immense pain, but what she didn’t know was that she would have to cover thousands of dollars in medical bills on her own because of a question of “observation status” at Beth Israel Deaconess Hospital-Milton.

“I was unknowingly on observation status the whole time,” Gillis said. “I was in such pain…. I was hard put to know what was going on sometimes.”

Gillis suffered two breaks in her pelvis, which had also become dislocated. At Beth Israel Deaconess, she was placed in a room like any other inpatient, but she was not a regular inpatient, she said. She was on observation status for four days.

Observation status was invented by Medicare and is used for short-term diagnosis, according to Anuj Goel, vice president of legal and regulatory affairs with the Massachusetts Hospital Association.

He added that Medicare officials often make the final decision which patients are on observation status.

“It should be the treating provider [that makes the decision],” Goel said. “The payers, Medicare and Mass Health and others, will often say we require you to call us for authorization and that should have been an outpatient.”

In Gillis’s case, she had been originally admitted as a normal inpatient, but a medical management company in Pennsylvania reviewed her status and overrode the Milton hospital’s staff decision, according to Gillis.

When it came time to be released, Gillis needed to go to a rehabilitation facility. A lung cancer survivor, Gillis had a new tracheostomy tube and wouldn’t be taken by some facilities. She wound up at Clark House in Westwood for four weeks.

Medicare covered her hospital stay, but because she had been on observation status, Medicare would not pay for room and meals at Clark House, and neither would her secondary insurance of Blue Cross Blue Shield. The bill was nearly $6,000 she had to pay out of pocket.

While Gillis is still weak from her recovery and her voice is strained from the tracheostomy tube, she is a formidable presence. She is outspoken, has spent a lifetime as a professional, and is resilient from her experience bringing up a son with Down syndrome.

Two of her other children are also helping to care for her as she recovers.

While she and her family are fighting and appealing the decision, she said she knows there are others who are less fortunate than she.

“How in the name of heaven do most people handle this?” Gillis asked.

In her monthly newsletter, Mary Ann Sullivan, director of Milton’s Council on Aging, wrote about Gillis’s situation and the potential danger of observation status. It is important for seniors to be aware of the issue, she said.

And with 20 percent of Milton’s population above the age of 60, this is a subject that will be relevant to the town.

While observation status has been around for decades, it is used more by hospitals to reduce penalties imposed by Medicare and other health insurance companies, Sullivan said.

“My question is why can’t he hospital, if they are on observation status, hand them a piece of paper they have to sign that says they are on observation status,” Sullivan said.

Sullivan said the generation being affected by this is particularly vulnerable because of their mindset. “They are the greatest generation; they were children in the ‘30s,” Sullivan said. “They always paid their way and never asked for help unless they absolutely need it.”

“Everyone thinks it’s unfair; all I can do is get the word out as best I can,” Sullivan said. “At some point, something has to be done to help these people.”

In response to Sullivan’s newsletter article and other media coverage of the issue, Beth Israel Deaconess Hospital-Milton will hold an information session about observation status on Wednesday, May 1, at 6:30 p.m. There will be a second forum on June 5 for those who cannot attend the first.

To register, call 617-696-8810.

At the same time, Massachusetts Senator Richard T. Moore, D-Uxbridge, has sponsored state legislation that would standardize the way observation status is determined favoring clinician assessments rather than payer assessments, according to the senator.

“I’m hopeful it is going to get done this session,” Moore said Thursday.

Moore originally filed the bill two years ago in the previous legislative session, but it never got to a vote.

The bill is currently awaiting a hearing date with the Health Care Finance Committee.

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