Schumer: Medicare law 'flawed'

By Kelly McCarthy

July 1, 2013 Updated Jul 1, 2013 at 11:26 PM EDT

Binghamton, NY (WBNG Binghamton) Seniors are being unfairly charged for what's known as observation stays, Sen. Charles Schumer (D-NY) said today.

It's something he says should be covered under Medicare, but it's not.

Schumer announced Monday proposed legislation to close the funding gap for observation stays.

Schumer said a technicality in the Medicare law is costing seniors thousands of dollars out-of-pocket.

Schumer made the appearance at Binghamton General Hospital to announce the proposed legislation called Improving Access to Medicare Coverage Act.

Schumer said the problem lies within Medicare's "observation status." A patient could stay up to four days in a hospital and not be qualified for medicare's full benefits.

The proposed legislation would allow time spent under observation status to count toward medicare coverage. Any patient that is hospitalized for 24 hours or more could qualify for full benefits.

"How many seniors, when faced with observation status, don't do the rehab they need, buy half the pills they're supposed to, because they know they can't afford it," Schumer said.

Binghamton resident Mary Opie's 86-year old mother was admitted to the hospital in May after a bad fall. Opie's mother did not need a medical procedure, so she was placed under observation status.

That forced the family to pay out-of-pocket for three weeks of rehabilitation and other medications.

"When you get a bill for $7,348.34 you step back a bit," Opie said. "It's hard. When you're an elderly person on a fixed incom,e that's a lot of money."

UHS doctors said a patient is fully covered by Medicare when they are under an acute care stay. Otherwise they're put under observation status, which gets less funding from Medicare.

"And when we meet with families, they don't understand this," said Michael Keenan, president of Good Shepard Communities. "Because we tell them you didn't have three days of acute care stay and they say you're wrong, my mom was at the hospital for a total of four days"

According to Schumer's office, the Southern Tier has more than 150,000 Medicare beneficiaries who could be on the hook for more than $350 per day in nursing care and drug costs.

"I can tell you in the last three months," Keenan said. "We've had to bill families and residents in one case $10,800, and in another case just under $18,000 in the last three months simply because they had observation stays instead of acute care stays."

Schumer wants to see this legislation passed as part of the Health Care Update Bill that will be voted on in September.