High cost, rigorous rules can trap Medicare patients

On the evening of Jan. 3, Fran Bogom, 86, a resident of the Abramson Center for Jewish Life in Horsham, was sitting on her bed watching television when she dozed off, fell, and broke her arm.

Bogom, a widow with mild dementia, arrived at the Abington Memorial Hospital emergency room at 9:21 p.m.

Doctors decided to keep Bogom overnight, placing her in observation status, essentially making her an outpatient, and figure out the best plan in the morning.

If Bogom were covered by Aetna, Blue Cross, or another private insurer, she might have been approved right away for a move to a nursing home, to help her get better.

But Bogom had Medicare.

And because of a regulation dating to 1966, Medicare would not pay for her rehabilitation in a nursing home unless she first stayed in the hospital for three days.

If Bogom stayed only one day at Abington, or two, she would have to pay the rehab bill herself. Her family feared it might be $5,000, even $10,000. It turned out to be far more.

So the stakes were high. Could she stay put at Abington for three days?

A predicament in context

To appreciate Bogom's predicament, which has arisen in virtually every American hospital, one needs to see it in context.

The new health bill - besides expanding insurance coverage - triggers many experiments to deliver better care at less cost. But redesign will take years, if it is even possible.

More immediately, America faces soaring health costs.

Medicare spent $509 billion last year on care of America's elderly. More money flows out every year, so the agency running Medicare is becoming more rigorous in policing payments to hospitals and doctors.

It has empowered teams of auditors - review audit contractors, known as RACs - to examine hospital claims.

Most private insurers follow patients in real time, often requiring authorization for procedures, tests, and drugs.

Medicare is different. It sets out exhaustive rules, and hospitals, doctors, and rehab facilities promise to code and bill accurately.

If Medicare finds that a hospital billed for a patient who did not need to be admitted, or failed to document a claim, it can refuse payment for the entire stay and impose a fine. Even if the mistake was unintentional.

At Abington, six nurses inspect patient charts daily to ensure the best care and to make sure each has the documentation to satisfy Medicare and other insurers.

Also, a utilization committee reviews whether people like Bogom need to be there.

And if they don't, the hospital tries its best, within the bounds of patient safety, to discharge patients to a more appropriate setting.

"We're just trying to follow the rules," said Michael Walsh, Abington's chief financial officer. "If you don't, there's a heavy hammer that comes down on you."

Abington must have resources to maintain staffing, operate clinics, renovate buildings, buy the latest equipment, recruit top doctors.

Abington leaders believe that if they don't comply with regulations to the letter, especially with the arrival of the RACs, millions of dollars are at stake - enough to turn a healthy hospital into one that can't fulfill its mission.

Formally admitted

On Monday morning, Jan. 4, Daila Pravs, a family physician, visited Bogom and formally admitted her.

Bogom was born in Buffalo, and as a young woman in the 1950s worked in New York City in the public relations department of the Israeli Bonds Office. She met Golda Meir and talked on the phone with Albert Einstein. (The family joke is that she put him on hold.)

After getting married, Bogom and her husband returned to Buffalo, where she helped him run his accounting business and raise their children. After her husband died, she remained active, ushering at Broadway shows that came to Buffalo, delivering meals on wheels.

In recent years, osteoporosis, diabetes, and dementia got the best of her. Her children last year moved her to Abramson. Her son lives in Philadelphia and her daughter in central New Jersey.

When she fell, Bogom was living alone in an assisted-living apartment.

Doctors were concerned with why she fell and quickly determined she could not go back home because she would need 24-hour care. What if she fell again and broke a hip, a death sentence for many elderly?

In the hospital Monday, Pravs ordered a workup to make sure neither stroke nor heart attack had caused the fall. She wanted Bogom, still disoriented and unable to walk, assessed by physical therapy.

On Tuesday, Pravs saw Bogom again. She wrote in the medical record: "Patient without complaints other than arm pain. . . . Will require snf [skilled nursing facility] upon discharge. If bed available may discharge today."

In theory, every patient in America must meet two qualifications to be admitted to a hospital. And in practice, every insurer wants to make sure these qualifications are met before paying.

Is the patient sick enough to need a hospital?

Is the hospital providing enough care to justify a patient's being there?

From day one, Abington's utilization committee wondered if Bogom met the criteria.

She "needed somebody to help with meals, toileting, bathing, and rehabilitation," said Kevin Zakrzewski, a primary-care physician who also heads the utilization review committee. "That is not what is considered hospital level of care. Compare that to someone who has a heart attack."

The staff also realized she couldn't go home because she didn't have the support.

"So the hospital is really stuck," Zakrzewski said. "And now the patient and family are stuck."

He imagined a Medicare auditor asking Abington: " 'This patient was ready to be discharged on day two. Why didn't you discharge her?'

"Then they're revoking payments to the hospital, and we're eligible for a fine."

Many hospitals share Abington's concern.

"The incentive for not admitting somebody and not keeping them for the full three days has actually grown even more as people anticipate the RAC audit," said Carolyn F. Scanlan, chief executive officer of the Hospital and Healthsystem Association of Pennsylvania.

She called the three-day rule "quite obsolete."

Discharge

By Tuesday, Jan. 5, nurses and social workers who handle discharge planning were in touch with the patient's daughter, Rachel Bogom: Her mother would be discharged, probably that day, and would pay out of pocket for rehab.

This seemed absurd to Rachel Bogom.

Her mother had worked all her life, paying into Medicare. She was now paying her monthly Medicare premium. In Rachel Bogom's mind, her mother had insurance precisely for situations like this.

"It's maddening, really," she said. "Because if somebody needs rehab after 24 hours, or 48 hours, just let them go. Why wait for 72 hours?"

When Congress created the nursing-home benefit in 1966, it was to be a final step before going home after a long hospitalization.

At this point, the recovering patient would not need a hospital. A nursing home's rehab unit would cost less.

Congress wanted everyone to understand this nursing-home stay would be temporary, and not for frail elders who could no longer care for themselves and would spend their last days in a nursing home.

The fear was that families would put an elderly loved one in the hospital for a day just to qualify for Medicare's nursing-home benefit, which pays for up to 100 days of care. Families would save thousands of dollars.

So the government created the three-day rule. It also stipulates the stay must be "medically necessary" so patients don't linger in the hospital just to get the rehab benefit.

But in 1966, nobody envisioned 2010, when hospital stays are very much shorter.

Congress has given the Centers for Medicare & Medicaid Services, which runs Medicare, authority to end the rule - but only if this does not increase the cost.

Medicare - taxpayers - spent $25 billion in 2009 on this short-term nursing-home benefit, CMS said.

Covering beneficiaries such as Bogom after one day, or two, would increase that burden.

Hence, the three-day rule remains.

Mounting pressure

By Tuesday afternoon, pressure was mounting. Case managers were calling Rachel Bogom. They wanted to ensure that her mother had a safe place to go when the doctor approved her discharge.

And Rachel Bogom had been pleading with doctor and hospital to find some way to help or delay.

She anticipated 10, maybe 20 days for her mother in rehab, but she really had no idea. The private-pay rate at the Abramson Center's rehab unit, where Fran Bogom would go, was $480 a day. Her mother was already paying rent for her assisted-living efficiency - more than $4,000 a month - and couldn't afford a nursing home, too, for long, her daughter said.

The three-day rule has more conditions.

Time spent in "observation status" does not count toward the three days. So even though Bogom was in a hospital bed and treated by hospital staff, she was an outpatient until Pravs admitted her Monday afternoon.

Compared with other hospitals in the state, Abington has had a higher rate of one-day admissions, and has been focusing much attention on making sure patients who belong in observation status are not admitted.

Abington is paid less for observation than for an admission.

Last week, for instance, 16 Medicare patients at Abington were in observation. Some would never be admitted, still need rehab, and have to pay out of pocket.

"It happens every day," said Maryteresa Mintz, head of case management. "Our people hate when they have to tell families this."

There is one other wrinkle with the three-day rule.

The day of discharge doesn't count, either.

So for Bogom to get three qualifying days - Monday, Tuesday, and Wednesday - she had to remain at Abington until 12:01 a.m. Thursday.

Pressure on doctor

About 8:30 a.m. Wednesday, a case manager called Joseph Mambu on his cell phone, asking about the discharge. Mambu is Prav's partner. He said he was beginning rounds and would see Bogom first.

He felt pressure from both sides - hospital and family.

"I'll do what's best for the patient," he said. "That's how I sleep at night."

In the elevator, en route to Bogom's room, Mambu got a call from his office. The daughter had phoned; her mother was suffering leg pain.

Mambu went in and greeted Bogom. She was sitting in a chair and wearing a brace, keeping her left arm and shoulder immobile.

He listened to her heart and lungs, took her vitals, and said, "All in all, you're doing pretty good."

He asked: "Do you know the name of this hospital?"

She paused, looked embarrassed and frustrated, like someone with the answer on the tip of her tongue.

"Aaaaaaa," she began.

"Abington," Mambu helped.

"Yes, Abington," she said.

"And do you know what year it is? It's a new year."

She paused to think.

"Ten twenty," she said.

"The other way," Mambu said kindly. "Twenty ten."

He checked her arm.

"This is going to heal up, and you'll get better. Hopefully, you can go back to your apartment," he said. "We're going to try to get you out of here today or tomorrow, depending on how you're feeling. Are you feeling well enough to leave today?"

"Oh, I feel well enough to leave, but not well enough to walk on my own."

"Well, we're going to work on that. Your children were worried about your legs."

"I guess you walk on your legs," she said.

"Well, they said you were having some pain."

"Well, yeah."

"What's the matter?"

"It hurts all the way up."

Mambu got on one knee and examined her left leg. He felt it, felt her hip.

"Well, what about when I do that?" he asked as he gently tried to rotate her leg.

She winced, enough for him to see it wasn't just confusion.

"It's not that bad," she said. "But I can't walk.

"I know. We're going to work on that. You don't have to be in the hospital for that. But I'm a little concerned about that pain. We're going to get an X-ray of that hip."

He wrote in her chart: "Xray left hip and pelvis. If negative, can D/C to SNF today."

"D/C" stands for discharge.

It was 10 a.m. Wednesday, and his decision was clear. If the X-ray was negative, Bogom could be discharged that day to Abramson.

Bogom would have to pay.

"We'll see what happens," Mambu said, going to his next patient. "This is the constant battle that goes on in billing Medicare and insurance."

Good to go

An hour later, Mambu's iPhone rang again. It was the case manager. Mambu said that if the new X-rays were negative, Bogom could leave.

"I agree with you," he added. "She looked pretty good. I want to make sure we were not missing a fracture."

Around 3:30, Mambu got a call. Hip and leg X-rays were complete - and negative.

Bogom was good to go.

But Rachel Bogom, when notified of this, filed an appeal with Medicare.

This was her way - to borrow from The Godfather - of going to the mattresses, going all out.

Every Medicare beneficiary has a right to appeal the discharge, but few know it.

Rachel Bogom happens to be a social worker at a hospital in Jersey City, N.J. She was getting advice from colleagues there.

All Bogom's medical records would now be copied and overnighted to Medicare for review, which would take up to 24 hours. In that time, everything freezes.

Bogom could not be discharged until the appeal was resolved.

Still there

Early Friday, Mambu was back doing rounds, and went to check on Bogom, who was still there.

Mambu had not heard the appeal's outcome, but a nurse told him Bogom was leaving that afternoon.

Bogom's daughter was in the room.

"You must be Rachel," he said. "I'm Dr. Mambu. It's nice to put a face with a voice. I hear you're leaving?"

"And we won," she said. "And you were a key to our case."

She felt his decision to request the X-rays had bought her mother more time. Mambu believed he hadn't helped either side, but had done only what he felt was right.

But had the Bogoms won?

Medicare contracts with regional quality improvement organizations (QIOs) to hear such appeals.

The hearing officer in Delaware could not decide on Thursday, within 24 hours, because Abington had neglected to include the hip and leg X-rays when it overnighted the records. So those had to be shipped Thursday.

Friday morning, the QIO issued a verdict: Abington was right in concluding that Bogom no longer needed hospital care.

Bogom lost the appeal.

Naturally, Abramson wondered whether Medicare would cover Bogom's stay in rehab. Mintz, at Abington, said the QIO had assured her Medicare would, that Bogom would get credit for being in the hospital through Friday. That was good enough for Abramson.

Rachel Bogom also understood from her conversations with everyone involved that the stay would be covered.

She lost the battle but felt she had won the war.

But would Medicare pay?

The regulations say three days, but they specify three "medically necessary" days.

Medicare rules also say the regional contractor that pays claims should presume all hospital days are medically necessary.

How would it all come out?

Medicare paid

Bogom left Abington that Friday.

Abington billed Medicare for her hospital stay. The primary diagnosis on which it based the bill was "syncope," or loss of consciousness.

Medicare paid Abington $3,744.07.

Bogom had also been paying every month for a supplemental "Medigap" insurance policy to cover costs Medicare didn't. But it would kick in only if Medicare paid first. Since Medicare did, that Blue Cross policy paid Abington $1,100.

Total payment to Abington for five nights: $4,844.07.

Bogom went to rehab at Abramson, where she stayed for 77 days out of an allowable 100.

Carol Irvine, Abramson's chief executive, said staff had worked immediately on balance and walking with a quad cane and walker.

Bogom also needed help dressing, bathing, transferring from bed to chair, and regaining strength in her upper arm once her fracture healed.

"The last rehab goal was working with a speech pathologist," Irvine said, improving her "ability to answer questions and give and take in a conversation."

Bogom was back in her apartment, as well as she was before the fall, by her 87th birthday, April 11.

Abramson submitted bills for Bogom's rehab stay in January, February, and March, and Medicare paid each one.

The total payment to Abramson was $29,939. Bogom's supplemental policy paid an additional $7,837.

Total rehab: $37,776.

While other insurers might have been quicker to send Bogom from hospital to rehab, they also might not have been willing to pay for as much therapy once she was there.

Every insurer has its own rules.

Zakrzewski, who heads the utilization committee, said that in his ideal world, decisions on where to treat a patient would "not be based on some arbitrary rule like a 72-hour stay, but what the patient needs and where the appropriate care can be provided at the lowest cost."

Sounds so simple, but so distant.

Rachel Bogom described her fight over the three-day stay as "four days of hell. I didn't sleep at night. I felt like the system was beating up on this little 86-year-old woman, and the only thing she had to protect her was me, and I was going to win."