An administrator at St. Mary’s Health System in Lewiston testified Wednesday before a U.S. Senate committee in support of a bill that would force Medicare to pay for skilled nursing care and rehabilitation services for patients who had been kept for observation at hospitals but were never admitted.

Bob Armstrong, vice president of elder care services, was invited to appear before the U.S. Senate Special Committee on Aging, along with several other panelists.

Maine’s U.S. Sen. Susan Collins, ranking member on the committee, led the discussion at a hearing on a bill she co-sponsored and is aimed at easing the burden on Medicare recipients who require post-hospitalization care, but who hadn’t met the guidelines for hospital admission for a minimum of three nights.

The bill, sponsored by U.S. Sen. Sherrod Brown, D-Ohio, would allow patients who spend three or more nights in observation at a hospital but are not admitted as inpatients to be covered for subsequent skilled care at a nursing home or rehab facility the same as if they had been admitted at a hospital.

Current Medicare regulations require a minimum of three nights as an admitted patient in a hospital to trigger Medicare benefits for post-hospital care such as skilled nursing or rehabilitation.

St. Mary’s d’Youville Pavilion is one of the largest nursing homes north of Boston and serves as the flagship of elder care services offered through St. Mary’s Health System, Armstrong said. The home provides a rehab center, a specialized dementia care unit and skilled and long-term care. The home offers 42 beds for Alzheimer’s and dementia patients, an additional 42 beds for patients, largely Medicare recipients who are in rehab from surgery, illness or injury, as well as 126 beds in the nursing facility, he said.

Maine’s roughly 200 nursing homes and assisted living facilities care for 6,300 residents at any given time, Armstrong said. Of those, 65 percent were paid through Medicaid, 23 percent through private pay and 12 percent through Medicare, he said.

Armstrong cited an example of Medicare refusing to pay St. Mary’s for a Medicare beneficiary who spent six days in its hospital where he was treated for a fracture of his femur. Skilled rehab care followed.

Medicare paid nothing for the rehab even though the hospital had documented the stay as an inpatient hospitalization, he said. St. Mary’s absorbed the loss of thousands of dollars rather than going after the patient and his family.

“This is just one of the countless heart-wrenching stories from across the country,” Armstrong told the committee.

Experts testified that often the patients themselves were unable to distinguish inpatient status from hospitalized outpatient in observation.

“We must do more to ensure our nation’s most vulnerable have access to the Medicare benefit they have earned and so rightly deserve,” Armstrong said. “It is simply not right to limit access to quality care for those most in need. Now is the time for Congress to pass legislation that solves the problem.”

Collins gave an example of a Portland woman, whose mother-in-law went to the emergency room with chest pains. That woman was placed in observation status for five days at the hospital where she developed further health problems. She was discharged to a nursing facility where she stayed for nearly a month. She was billed for nearly $9,000 for that follow-up care because Medicare refused to pay, citing her observation status at the hospital, Collins said.

“The increase in hospital observation stays has caused severe financial consequences for many seniors,” Collins said. “These patients are held responsible for outpatient co-payments and prescription drug costs that they would not have had as an inpatient. There is also no out-of-pocket cap on these costs. More important, if a Medicare patient is not formally admitted as an inpatient, Medicare will not pay for any subsequent skilled nursing or rehabilitation care.”

She pointed out that more patients are being kept at hospitals for observation than ever as Medicare administration has scrutinized short-term hospital visits and readmissions.

Brown’s bill is pending in the Senate Finance Committee.

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