Patient status can impact payment for transitional care

Special to the Herald-LeaderMarch 10, 2014 

Penny Gilbert

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Understanding health care today is not easy. Trying to understand the Centers for Medicare & Medicaid Services' patient status regulations is even more confusing.

The term patient status indicates whether you are an inpatient or an outpatient. CMS provide a range of guidelines to physicians identifying when a patient should be given an inpatient status versus outpatient (observation) status.

Patients think being placed in a hospital bed and spending the night indicates admission and thus inpatient status. This is not true. It is not uncommon to stay overnight in the hospital, yet be in an outpatient observation status.

Why is patient status important?

Patient status determines patient co-payments: How much Medicare will pay and how much the patient will pay. Patient status may also affect your ability to transition from the hospital to a skilled facility should you need continued care such as rehabilitation or nursing care after hospitalization. Under Medicare rules, Medicare will pay 100 percent of the first 20 days in an approved skilled nursing facility, but only after there has been an inpatient status hospitalization stay for three complete days. If the patient was in outpatient (observation) status, the patient is responsible for paying for the skilled facility. It's important for families to understand this difference so they can prepare financially.

Who determines patient status?

Patient status is determined by the physician and is guided by Medicare. Once the physician determines patient status, typically the case manager or discharge planner reviews the plan of care identified by the physician, reviews clinical information such as lab work and X-rays, and applies the information to Medicare guidelines.

If the patient does not meet inpatient status criteria, the case manager informs the physician. If the physician thinks the patient really requires an inpatient status, a second physician may review the case to help determine correct status. Ultimately it is Medicare guidelines, along with the clinical knowledge of the physician, that lead to the determination of patient status.

What if you ask the doctor to make you an inpatient?

If a physician knowingly places a patient into an incorrect status or if the hospital knowingly bills Medicare for an incorrect status, they may be reviewed and could ultimately be prosecuted by the federal government for fraud. But if a patient feels strongly that he should have inpatient status, he should discuss it with the physician and case manager. If there is truly a need for a second review, the case manager can facilitate it for the patient.

If you want to know what your patient status is when you're in the hospital, ask your case manager or physician. To learn more about patient status regulations, visit the CMS website at

Penny Gilbert is director of the Admission Coordination Center, Case Management and the Transport Team at Baptist Health Lexington, and director of Case Management and Palliative Care at Baptist Health Richmond.

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