By Susan Jaffe | September 7, 2010 | Kaiser Health News produced in collaboration with 
After Ann Callan, 85, fell and broke four ribs, she spent six days at Holy Cross Hospital in Silver Spring. Doctors and nurses examined her daily and gave her medications and oxygen to help her breathe. But when she was discharged in early January, her family got a surprise: Medicare would not pay for her follow-up nursing home care, because she did not have the prerequisite three days of inpatient care.
“Where was she?” asks her husband, Paul Callan, 85, a retired U.S. Army colonel. “I was with her all the time. I knew she was a patient there.”
Yet some hospitals keep patients under observation for days, and that decision can have severe consequences. Medicare considers observation services outpatient care, which requires beneficiaries to cover a bigger share of drug costs and other expenses than they would when receiving inpatient care.And unless patients spend at least three consecutive days as an inpatient, Medicare will not cover follow-up nursing home expenses after discharge…. more