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15 Aug 2012

Medicare Classification Causing Medical Debt to Soar in CO Springs

A new trend has been spotted with regard to classification of hospital stays for Medicare patients - and it's driving up medical debt at a rapid pace.

Colorado Springs Chapter 7 bankruptcy lawyers know that medical debt is one of the driving forces for those seeking relief from bankruptcy.

The good news is a bankruptcy will erase those debts, allowing you to focus on your health, recovery and the future.


However, we still need to make consumers aware of what is increasingly becoming a driving force for some of these situations in which individuals - particularly the elderly - are owing tens of thousands or even hundreds of thousands of dollars.

It has to do with the way patients are classified when they are in the hospital. If you are considered an "inpatient," that means you have been formally admitted into the hospital. The way Medicare works is that if you stay three or more days in inpatient care, certain medications will be covered, as well as subsequent rehabilitation costs for the first 20 days, and then another $145 a day after that - up to 100 days.

However, if you are classified as "under observation" while in the hospital, or if your classification is switched at some point prior to those three days, none of that is covered. It's a technicality, but one more and more hospitals are switching to for this reason:

Hospitals get paid quite a bit less under Medicare for "under observation" patients. However, with tremendous cuts to Medicare left and right, the agency has employed a number of auditors to trim costs. Those auditors are second-guessing almost every inpatient admittance. If they determine an inpatient classification wasn't necessary, those auditors have the authority to withhold payment from the the hospital entirely.

That means hospitals are taking their chances by simply classifying patients as "under observation" automatically - no matter that it seems to violate even the basic Medicare rules and that it breaks the bank for patients, particularly those who may require longer-term treatment.

What's worse, many patients aren't even aware of it until after they've been released - when they get their bill.

Doctors say the classification won't impact the level of treatment you receive. But at the end of the day, they're interested in your physical health - not your finances.

That's where we come in.

Stephen H. Swift

Managing Attorney
Law Office of Stephen H. Swift, P.C.

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