Medicare Compliance & Reimbursement

Question: We saw a patient for 24 hours in the emergency department (ED) and two days in observation. The patient, who was covered by Medicare Part A, was upset when she got a bill and called to ask why her hospital stay wasn’t covered by Medicare. What can we say to patients about situations like this in the future?

Arizona Subscriber

Answer: This question comes up often in situations when patients have Medicare Part A but not Part B. The patients believe that Part A covers visits throughout the entire hospital, including the emergency department (ED) and the observation unit. Issues arise when they get a bill indicating that they weren’t seen under a Part A stay, and confusion ensues.

Breakdown: The ED and the observation unit are considered outpatient status, and are therefore covered under Part B rather than Part A. You must alert patients of this fact under the Medicare Outpatient Observation Notice (MOON) rule, which requires you to notify the patient both in writing and verbally that they are in observation care under a Part B stay — and not Part A.

The MOON notice will alert the patient that their copayments and deductibles might be different than what they’d pay under a Part A stay. However, even if your patient signs the notice and verbally tells you that they understand the situation, that may change when they receive the bill.

Here’s how to respond: “I understand your confusion, and unfortunately the emergency department is covered under Part B Medicare, not Part A,” you can tell the patient. You should then ask, “Do you have an insurance plan that covers your doctor visits in doctor’s offices? If so, that’s the plan that will cover your ED stay, rather than your Part A insurance. It’s definitely a source of confusion for a lot of patients, since the hospital probably sent you a bill also, indicating that some of your testing or supplies were covered under Part A. However, the physician’s work diagnosing and treating you is not subject to Part A Medicare.”

If the patient questions you further, you can say, “We shared a form with you when you came to the ED that explained this in greater detail. I’m happy to send that over if you’d like. If you don’t have insurance that will cover the ED visit, we can talk to you about setting up a payment plan.”

Then send the patient the MOON notice that they signed. This sometimes takes care of the issue, once they realize that they signed this at the time of the visit.

“Keep in mind that even if the patient was admitted as a formal inpatient, they could have some costs, including their Part A deductible (particularly in the beginning of the calendar year), which for 2021 is $1,484,” states Michael Granovsky MD, CPC, FACEP, president of LogixHealth.