Medicare: Avoid big rehab bills

Getting a stay in rehab covered by Medicare after a long observation stay in a hospital isn't easy.

(MONEY Magazine) -- When you need to go to rehab after a fall, illness or other medical problem, Medicare will fully cover the cost of your stay for up to 20 days as long as you've spent at least three days in the hospital as an inpatient (among other criteria).

As discussed in our companion article, The painful new trend in Medicare, an increasing number of seniors are spending days in the hospital under observation only. The result: your subsequent care at a skilled nursing facility doesn't qualify for Medicare coverage. You could be stuck with the full tab.

Following these steps during and after an observation stay, however, can help you avoid a devastating bill.

Your best shot at getting Medicare to cover a skilled nursing stay is to have your status switched to inpatient while you're in the hospital, says Terry Berthelot, an attorney at the Center for Medicare Advocacy.

Don't assume anything. Ask your doctor and case manager what your (or your parent's) designation is. If the answer is observation, press the doctor to review your status and take your case to the utilization review committee.

Make sure your full medical history, including past illnesses, is noted in your records. A more complete picture of your health could help you meet inpatient guidelines.

Bring in help. Ask your primary physician to call the hospitalist and explain what risk factors or conditions warrant a higher level of care.

Arrange home care. If all else fails and you can't afford to go to a nursing facility, talk to the discharge planner. Medicare covers a limited amount of home help, even if you weren't an inpatient.

Once you've been discharged, the hospital can't switch your status. Your best hope is to appeal your case to Medicare -- a tough process.

Lay the groundwork. Ask the nursing home to bill Medicare -- that's not automatic if you're not admitted directly from an inpatient stay. Medicare will then formally deny the stay.

Be patient. You can't start the appeals process until you receive your quarterly Medicare Summary Notice. Make a copy, circle the skilled nursing facility charge, and write that you are appealing the denial on the grounds that your hospital stay should have been considered inpatient, not observation. Mail it to the address provided on the statement.

Expect to lose. Once Medicare has denied your appeal twice -- that's common, says Berthelot -- your case moves to an administrative law judge.

The hearing may be by phone, but you can request a video conference, and Medicare must cover those costs. This is where advocates report some success, though expect to work for it.

Ask a doctor to testify on your behalf or write a letter, and have the nursing home testify that your care met Medicare guidelines.

Find help. For guidance, contact the nonprofit Center for Medicare Advocacy at medicareadvocacy.org.

More on this story: The painful new trend in Medicare