Sen. Sherrod Brown tries again to fix Medicare ‘observation’ loophole

The Columbus Dispatch

Did you spend at least three nights in the hospital under “inpatient” status, or under observation? It matters if you’re a senior on Medicare who needs rehab after leaving the hospital. Sen. Sherrod Brown has introduced a bill that would allow Medicare to pay for therapy regardless of your hospital status.

The social worker at OhioHealth’s Riverside Methodist Hospital had bad news for Kim Phillips: Medicare wouldn’t pay for the nursing-home therapy that the doctor had ordered for her mom.

That’s because Phillips’ 78-year mother, who fell and fractured her knee cap, didn’t spend three nights at the hospital under “inpatient” status, a federal requirement for Medicare to cover the expense.

The difference between “inpatient” and “outpatient” status can lead to surprise, out-of-pocket costs for nursing-home therapy for tens of thousands of Medicare beneficiaries a year. For Phillips’ family, the bill is approaching $8,000 after 51 days.

It’s a distinction that needs to be changed, advocates say, and Sen. Sherrod Brown, an Ohio Democrat, recently introduced a bill that he says aims to do just that.

“It just makes no sense at all. A hospital night is a hospital night, and we should count all those nights equally,” said Dr. Ann M. Sheehy, head of the Division of Hospital Medicine at the University of Wisconsin, who researches short-stay hospitalizations.

Brown’s legislation, which was introduced last month, would allow Medicare to pay for therapy at nursing homes regardless of hospital status — meaning both inpatient and outpatient nights would count toward the three-night requirement.

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