Medicare Pilot Program Could Help Save Seniors Thousands Of Dollars

Medicare has just launched a new three-year pilot program to work to revise a policy that often sticks seniors with large medical bills, potentially helping to save seniors thousands of dollars in outpatient care.

Current Medicare rules make a distinction between inpatient care and outpatient care — requiring patients to spend at least three days in the hospital as an inpatient to gain Medicare coverage for their follow-up care in a nursing home — which can lead those seniors who have been classified as “outpatients” to be surprised with charges that Medicare won’t cover. Under the pilot program, however, participating hospitals will be allowed to rebill Medicare for more coverage for outpatient services.

The Washington Post reports that many seniors aren’t informed of their status as outpatients while they’re in the hospital, so they run up large bills without even realizing it:

Though many seniors stay in the hospital for several days and are in a regular hospital room while being treated, they don’t always know that the hospital has classified them as an observation patient, which is considered outpatient care.

Under Medicare rules, patients must have at least three days in the hospital as an inpatient — not just for observation — to qualify for follow-up care in a nursing home. In addition to generally higher hospital co-payments, hospital observation patients can be billed any amount by their hospital for the routine maintenance drugs they need. Some have reported charges of $18 for one baby aspirin and $71 for one blood pressure pill that costs 16 cents at a local pharmacy.

Medicare officials hope the pilot program will allow more flexibility for hospitals, which can feel pressured to stick to outpatient care despite the fact that it’s more expensive for seniors. Under the current policy, if Medicare decides that a hospital has billed it for inpatient treatment for a senior who could have been given outpatient treatment instead, the hospital can lose the entire Medicare payment — potentially prompting hospitals to play it safe and put too many people in the outpatient category. In fact, the number of patients in outpatient care for over 48 hours more than doubled between 2006 and 2010, Medicare said.

Some health care officials, such as Toby Edelman at the Center for Medicare Advocacy, think the inpatient and outpatient classifications are “arbitrary” and need to be scrapped altogether. Since those categories currently still factor into the health care sector, however, the pilot program is a small step to address the seniors who struggle to pay thousands of dollars in follow-up care.

Reforms to the Medicare program under the health reform law have already begun to significantly benefit seniors. A report from the Centers for Medicare And Medicaid Services reports that, as of the end of last month, seniors had already saved $4 billion in prescription drug costs thanks to Obamacare. A recent study from the Commonwealth Fund also found that seniors are more satisfied with the quality and affordability of their care when they are covered under the Medicare program.