March 2013 Issue
February 27, 2013

Advocates seek fix to Medicare to aid patients stuck with rehab costs

Author: Liza Frenette
Source: NYSUT United
Caption: Isadore "Ike" Cassuto and his wife, Thalia, a UFT retiree, received a $6,000 bill for Ike Cassuto's rehabilitation because Medicare would not cover the expense. Photo by Lori Van Buren/Times Union.

Ike Cassuto arrived at the skilled nursing facility flat on his back in an ambulance. He could not move on his own; his pelvis was fractured. Although the 88-year-old was transported directly from the hospital, he was told his rehabilitation costs would not be covered by Medicare. His wife, Thalia, a United Federation of Teachers retiree, was stunned.

"I think I had to ask the Medicare administrator and her supervisor and the social worker who arranged discharge to tell me again and again. It did not sink in," Thalia Cassuto said. "Imagine. Here is this man who has been paying for Medicare since its inception being denied coverage for care he requires in order to walk again."

Ike Cassuto had been in the hospital for four days, which, on its face, more than meets the three-day minimum Medicare requires before it will pay for rehabilitation.

But the hospital had labeled Ike Cassuto as an outpatient, or on "observation status." Medicare would not pay for his rehab and the Cassutos ended up with a $6,000 bill from the skilled nursing facility where Ike Cassuto stayed for three weeks.

"Our concern for our members is that we want the days spent in observation status to count for the number of days needed to qualify for skilled nursing rehabilitation," said Kathleen Donahue, NYSUT vice president who oversees health care issues for the union.
The controversial practice to define hospital care as "observation status" is "skyrocketing" as Medicare pressures hospitals to reduce costs, according to U.S. Senator Chuck Schumer, D-New York.

Medicare reimburses hospitals less for a patient on "observation status" even though the patient believes he or she is receiving the same care as someone who is admitted. And often patients have no idea what status they are until they have to choose between paying thousands of dollars on their own for rehabilitation, or going home.

"There have been cases of individuals going home after discharge from the hospital because they could not afford to pay for the after-care needed, resulting in emotional stress and threatened health," said Judy Schultz, a Schenectady Federation of Teachers retiree active with the Capital District Alliance for Retired Americans and Schenectady Area Labor Council. She is galvanizing area labor federations and retiree councils to protest the Medicare practice.

Thalia Cassuto is making phone calls, writing letters and making noise to get the observation status policy changed. The Spencertown couple vows to be the voice for those who cannot afford the care they need.

"I was out striking when Albert Shanker was [union] president," the former New York City teacher said. "It's been a long life of picketing and protesting, and I'll continue to do so!"

Schumer is leading efforts for a bipartisan plan to reintroduce the Improving Access to Medicare Coverage Act, which would allow observation stays to be counted toward the three-day mandatory inpatient stay.

"Medicare was designed to prop up our elderly ... not deceive them," Schumer said in February at a press conference at St. Peter's Hospital in Albany to emphasize his support of the bill. The Cassutos were by his side.

"Frankly, it's unconscionable," said Ike Cassuto. "Our society should be held accountable."

Schumer said Medicare can pay for rehabilitation costs by generating savings in other areas, specifically by using its buying power to save money on prescriptions.

According to Kaiser Health News, the number of observation claims submitted to Medicare rose 46 percent to 1.4 million from 2006-10. The number of observation cases lasting longer than 48 hours also tripled.

Susan Klug, NYSUT's health benefits specialist, said hospitals may face penalties if they admit patients that Medicare later deems should have been outpatients.

Many of Medicare's policies are based on how medical care was delivered decades ago when the federal program was created, Klug said.

With newer medical technology, patients are treated and discharged much more quickly, she said.

And Medicare is striving to keep costs down by preventing hospitals from admitting patients and charging the health program more when it may not be medically necessary. Hospitals are being monitored more and more on this issue.

The American Federation of Teachers, with NYSUT support, is urging passage of the Improving Access to Medicare Coverage Act.

AFT is asking in-service and retired members to contact congressional representatives and urge them to pass the act. AFT also recommends that state affiliates and local unions examine their health insurance offerings and educate members on how to protect themselves.

"If you have to go to a hospital you must ask in admission: 'Am I an inpatient or under observation?' Bring someone with you as an advocate," said Jay Broad, a retired member of the Lynbrook Teachers Association and activist who has been trained by the Medicare Rights Center, with sponsorship by NYSUT.

Broad, who makes presentations about understanding Medicare at sites throughout Nassau County, is also a state-certified ombudsman for hospitals and assisted living facilities. "We try to be proactive," he said. "We don't take care of our elderly in this country very well."

New York's Senior Action Council has a patients' rights toolkit available by calling 800-333-4374.