Which Hospitals Are Likely To Change Your Admission Status?

Nationwide, 4 out 5 hospitals have their payments from Medicare reduced because of unacceptable readmission rates. Eighteen hospitals will be fined 2% of the Medicare payments, and 154 will lose 1% of their Medicare payments for every Medicare patient, whether readmitted or not. These fines amount to over $1 million for many hospitals.

The Congressional Budget Office estimated that the government spent between $1 and $10 billion a year on hospitalizations that could have been prevented.

The way the rule is implemented, however, does not take into account whether a patient is admitted twice in 30 days for the same condition or not. Somone who is treated for cancer and then develops an infection, for example, accumulates a penalty for the hospital on all of its Medicare cases. A woman who has a baby and then breaks her ankle likewise earns a penalty for the hospital if she is admitted twice.

Certain kinds of hospitals are extremely likely to get penalized by Medicare, and are especially likely to retroactively change patient status:

• Teaching hospitals. In these kinds of hospitals, patients are seen by teams of doctors, residents, and medical students. Almost any doctor can find a reason that you should come back to hospital for further observation.

• Heart hospitals. If you have ever had a heart attack, coming into the ER with any kind of chest pain is likely to earn you at least an overnight stay.

• Charity hospitals. Hospitals that serve the poor have more readmissions for the simple reason that their patients are less likely to be able to buy their medications, live under greater stress, and have to go back to work sooner than patients who do not go to charity hospitals.

Also, some hospitals run "intermediate care units" that don't count as hospital admissions, either for purposes of fines applied against the hospital or for eligibility for Medicare benefits.

If you can plan your hospital stay, try to stay in a hospital that caters to higher-income patients. You will probably find it to be a much more pleasant experience, and you are far less likely to be readmitted, especially if you do not have Medicare Part B.

If you stay in the hospital and you are not admitted to the hospital, you can wind up paying the full cost of your follow-up care. Howard's bill was much lower than many. 

Read More: Six Special Situations In Signing Up For Medicare Part B

That's why Medicare has published a brochure entitled "Are You a Hospital Inpatient or Outpatient? If You Have Medicare--Ask!" This brochure outlines the questions Medicare recipients and their families need to ask to make sure they can avoid catastrophic bills later. Every year, over 1 million Medicare patients are held for observation in hospitals without admission, or have their admission status revised later. Don't be one of the 1 million per year who may get handed a crippling bill for services Medicare will not cover.