Senators Hear How Two-Midnight Rule Harms Patients, Hospitals

Cheryl Clark, July 31, 2014

The financial impact of observation status has become a flashpoint for hospitals and seniors and is the focus of a hearing before the U.S. Senate Special Committee on Aging.

On Medicare's 49th anniversary Wednesday, a Senate panel heard testimony from caregivers and hospital administrators about the costly consequences of the federal program's unclear definitions of "inpatient" and "outpatient."

A Massachusetts resident described how her 92-year-old husband's nursing home stay wasn't covered by Medicare because, though he'd been in the hospital during the prior 10 days, the hospital didn't consider him an inpatient for the minimum period two midnights.

"The [nursing home] administrator told me that we had to pay the nursing home $7,859 immediately upon leaving [after six-weeks of rehab], or the bill would be put into collection for the full amount of $15,000, or my house would have been attached for the full amount," Sylvia Engler said.

Though she has a lawyer and has filed several appeals, Medicare told Engler she can't appeal because the hospital had determined that her husband's status was 'medical observation.' And since he was not an inpatient, Medicare won't cover his nursing home bill. He remains in a nursing home, Engler said, and she continues to fight.

Engler joined officials from the University of Wisconsin School of Medicine, Yale-New Haven Health System, and St. Mary's Health System in Lewiston, ME to tell a U.S. Senate Special Committee on Aging panel how confusion over the definition of inpatient and outpatient status is harming patients and providers.

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