Follow the Money, Follow the Money... Medicare Bingo
Yes, it is a cat and mouse game where the hospitals try to get as much money from the government as possible….to the detriment of the patient.
This one is a classic case. ObamaCare changed the law to make hospitals more responsible and they are penalized if a patient is readmitted within 30 days of treatment. Sounds fair right, your car mechanic fixes your brakes and they don't work right, he doesn't get to charge you a second time to fix his first mistake.
In addition, under Medicare, you are entitled to 100 days in a nursing home or skilled facility paid by Medicare (at least partially) if you were in the hospital for 3 days.
So the hospitals, to avoid readmission penalties, are not “admitting” people. Instead they are keeping them under “observation” status. Then, if they are readmitted within 30 days, there is no penalty since they were never admitted in the first case.
But, and here is the catch, if you were only on “observation” status, then you don't get your 100 days in the nursing home from Medicare.
So, yes, the hospitals are playing a game whereby you have to cover the $400 a day for nursing home care out of your own pocket so they can't get penalized for poor care. Does the hospital have to tell you that you are only being "observed"? Nope (they do in NY).
While there are various bills in the states and Congress to fix this, it is the current state of things. In the meantime watch out for yourself and Follow the Money.