NASGA Legislative Liaison Brenda Kelly Nelum Interviewed by NBC Nightly News: Law Aims to Protect Medicare Patients from Surprise Hospital Bill

M.J. Bricout of Texas is still paying off a $28,000 medical bill.

Three years ago, M.J. Bricout broke her leg. And then when she got to the hospital she says she was robbed.

"I was mugged. I feel like it's an appropriate word to use," said Bricout, who got socked with a $28,000 bill because her doctor categorized her as "under observation" instead of as an "inpatient" before she went into two months of rehab.

But on Wednesday, three years after NBC News first told Bricout's story, a new law goes into effect that requires hospitals to tell people orally and in writing that they are "under observation," effectively outpatients, and thus potentially liable for much larger bills that aren't covered by Medicare. More than 1 million patients will get these MOONs (Medicare Outpatient Observation Notices) every year, according to federal estimates.

Rep. Lloyd Doggett, D.-Texas, who co-wrote the Congressional bill that created the law, said two Nightly News reports on Bricout and others like her in 2014 inspired him to push for change.

Three years ago, M.J. Bricout broke her leg. And then when she got to the hospital she says she was robbed.

"I was mugged. I feel like it's an appropriate word to use," said Bricout, who got socked with a $28,000 bill because her doctor categorized her as "under observation" instead of as an "inpatient" before she went into two months of rehab.

But on Wednesday, three years after NBC News first told Bricout's story, a new law goes into effect that requires hospitals to tell people orally and in writing that they are "under observation," effectively outpatients, and thus potentially liable for much larger bills that aren't covered by Medicare. More than 1 million patients will get these MOONs (Medicare Outpatient Observation Notices) every year, according to federal estimates.

Rep. Lloyd Doggett, D.-Texas, who co-wrote the Congressional bill that created the law, said two Nightly News reports on Bricout and others like her in 2014 inspired him to push for change.

"In times of sickness and stress, patients should be focused on recovery, not unexpected threats to their bank account," Rep. Doggett told NBC News. "Now, patients will be armed with the knowledge they need to be their own best advocates."

What the new law does not do, however, is eliminate the loophole altogether. A bill reintroduced Wednesday by Congressman Joe Courtney, D-Connecticut, would make days spent "under observation" count towards qualification for Medicare coverage.

Brenda Kelley Nelum successfully challenged a five-figure medical bill.

[NASGA Legislative Liaison] Brenda Kelley Nelum of Virginia fought her husband's designation as "under observation" instead of "inpatient." Had she not succeeded, "It would have been a major hardship," she said. She and her husband, who later passed away, would've owed as much as $30,000 for 30 days of rehab.

"We would have been broke."

Full Article and Source:
Law Aims to Protect Medicare Patients From Surprise Hospital Bill

See Brenda's Original Interview in 2014:
How to Avoid Two Words That Cost Thousands in Medicare Bills

Brenda and her husband, Doc Nelum

Senate Committee Examines Issues Surrounding Hospital Observation Status

The U.S. Senate Special Committee on Aging recently held a hearing to examine the financial implications of hospital observation status on Medicare beneficiaries, the relationship between Medicare Recovery Audit Contractor (RAC) behavior and the spike in hospital observation stays, and legislative and administrative efforts to address problems associated with these issues.

Committee members on both sides of the aisle agreed that misaligned incentives within the RAC program and excessive auditing by RACs have been driving the increase in observation stays.  Observation status can have financial implications for Medicare beneficiaries such as higher cost-sharing, and hospitals also risk burdensome audits and loss of reimbursement when they admit patients for short, medically necessary services.

Dr. Jeetu Nanda, System Medical Director for Informatics and Physician Compliance at SSM Health, who testified at the Challenging the Status Quo: Solutions to the Hospital Observation Stay Crisis hearing on behalf of the American Hospital Association (AHA), explained that hospitals are placed in an “untenable position” as they provide the best possible care to patients while striving to comply with complex Medicare payment policies.  Dr. Nanda encouraged policymakers to support key improvements to the RAC program such as those contained in the Medicare Audit Improvement Act of 2015 (H.R. 2156), legislation that would make the audit and appeals system more practicable for both providers and patients.

In his testimony before the Committee, Centers for Medicare and Medicaid Services (CMS) Deputy Administrator and Director Sean Cavanaugh acknowledged the need to fix issues related to the short hospital stay payment policy, including CMS’ “two-midnight” rule, and said the agency expects to continue the discussion in the proposed 2016 Hospital Outpatient Prospective Payment System rule that will be released this summer.  HANYS continues to work with CMS to address these issues and with AHA and others to build support in Congress for the Medicare Audit Improvement Act of 2015.    Contact: Elyse Oveson

Full Article & Source:
Senate Committee Examines Issues Surrounding Hospital Observation Status

See Also:
How to Avoid Two Words That Cost Thousands in Medicare Bills:  Under Observation"

How to Avoid the Two Words That Cost Thousands in Medicare Bills: "Under Observation"

It’s not something they teach doctors in medical school. And it’s probably not something you’d know to look for if you were suddenly rushed to the hospital in an emergency. But when a doctor decides to write the words “under observation” on a Medicare patient’s chart, it can have lasting consequences.

Those two little words can be the difference between spending thousands of dollars out of your own pocket and having Medicare cover the entire bill.

Brenda Kelley-Nelum was driving her husband Al 'Doc' Nelum to an appointment when he started having symptoms of a stroke.   An ambulance took him to the nearest hospital with a stroke clinic. Hours later they were still there, waiting on test results, when someone mentioned her husband had been put on observation status.  As an advocate for seniors in Virginia, Kelley-Nelum had a vague recollection that she’d heard that term before. And it wasn't good. 

She was right to worry.

As it turned out, her husband would go on to a nursing facility for rehabilitation, at a cost of about $22,000. Medicare pays for rehab only for people admitted to a hospital for three or more days as “inpatients.” Medicare will not pay for rehab if they were classified as “observation status” when they received treatment at the hospital.

Kelley-Nelum did what advocates advise anyone on Medicare to do. She found out how her husband was classified and asked if he might need rehab later. Then she spoke up -- loudly. She asked so many questions, she said, the doctors grew tired and sent in someone from hospital administration. That person relented and changed Doc Nelum's status to “inpatient.” His entire $22,000 bill was ultimately covered by Medicare.

Kelley-Nelum says her husband was lucky she was there.

“If I had not been there my husband probably would have accepted the observation status ... on face value.”

Source:
How to Avoid the Two Words That Cost Thousands in Medicare Bills