Panel discusses Medicare inequities

Norwich - A two-tiered and often confusing system of classifications for hospitalized Medicare patients is hurting patients and their families both medically and financially, according to a panel of experts at a forum Thursday at Three Rivers Community College.

In the classification system, patients can be admitted either as inpatients, with a specific diagnosis, or for an observation stay, in which a specific diagnosis is awaiting test results, but the patient is receiving the same kinds of services.

The problem for patients, according to panelists, is that Medicare covers far less of the expenses associated with an observation stay, leaving patients and their families with huge bills.

Also, "observation" patients are ineligible for Medicare coverage for a short-term stay in a rehabilitation facility afterwards as they would be after three days as inpatients.

"What's driving it? Medicare is under pressure to control costs," said Anne-Marie Foster, geriatric care manager for a local law firm and moderator of the forum, sponsored by the advocacy committee of the regional social services agency Senior Resources.

Foster and U.S. Rep. Joe Courtney, D-2nd District, explained that an increase nationally in observation admissions, from 828,000 in 2006 to 1.2 million in 2009, is not the result of the federal health care reform act passed last year, but of a Medicare cost-cutting initiative that began in 2006.

It established the practice of having reviews of hospital billings by so-called recovery audit contractors to ensure that all inpatient admissions were justified by strict criteria.

The result, said the directors of care management at two local hospitals, is that hospitals have become very cautious about how patients are classified to avoid the hefty fines Medicare could impose.

"It's based on the hospital's desire to be compliant and avoid penalties," said Colleen Sullivan of The William W. Backus Hospital in Norwich. Seated next to her on the panel was Wanda Carlson, her peer at Lawrence & Memorial Hospital in New London.

Dr. Robert Linden, a retired primary care physician from Niantic who addressed the forum in a videotaped message, also blamed the rise in observation admissions on the use of hospitalists - physicians who care for patients only in the hospital - instead of doctors with longstanding relationships with their patients who care for them in the hospital and private offices. Fear of malpractice lawsuits is also to blame, he said.

"These physicians (hospitalists) over-test, they over-treat and they over-admit," he said, because they see the patient for only a short time. "It's called defensive medicine."

In preparing his remarks for the forum, Linden surveyed about a dozen local colleagues. He found widespread misunderstandings among doctors about what constitutes an observation admission and Medicare's three-day rule for nursing care.

"What did I find in a nutshell? Confusion," he said.

One of the consequences of observation admissions, said Kim Durand, clinical supervisor for a homecare agency affiliated with Day Kimball Hospital in Putnam, is that elderly people who need short-term nursing home services after a hospital stay are instead sent home, and then end up being readmitted a short time later.

She told the story of a 93-year-old woman with kidney failure who was admitted for observation, then sent home, only to be found by home health workers on the floor twice after falling, ending up back in the hospital both times.

This could have been avoided had she been eligible for coverage at a nursing home, Durand said, or been able to pay for the approximately $350 per day costs of nursing home care herself.

"These are the roller coaster effects we're seeing for our elders," she said.

One possible solution, said Terry Berthelot, attorney with the Center for Medicare Advocacy, is passage of a bill that would treat observation days the same as inpatient days for Medicare coverage.

The bill was introduced by Courtney in 2010, and a similar bill was introduced in the Senate. Both bills died during the last session. In April, Courtney re-introduced the bill, and he's hoping for action in the current Congress.

The bill would also loosen the restriction on coverage for nursing home stays after a hospitalization, so that the "arbitrary" three-day rule would become more flexible, Courtney said.

He urged those concerned about the issue to work to build more support among other members of Congress.

"Start making some noise and get the word out," he said.

j.benson@theday.com