If a patient meets the four following conditions, Medicare will help pay for care in a hospital:

• Inpatient hospital care has been prescribed by a physician for treatment of an illness or injury,
• The patient requires the kind of care that can only be provided in a hospital,
• The hospital is participating in Medicare, and
• The stay is not disapproved by the hospital’s utilization review or peer review committee.

Medicare Part A Benefits

Medicare Part A will provide:

Inpatient hospital care for up to 90 days in each benefit period.

• A Medicare beneficiary is entitled to inpatient hospital care for up to 90 days in each “benefit period.”
• A “benefit period” begins the day a patient is admitted to a hospital. It ends when the patient has been in neither a hospital nor a facility primarily furnishing skilled nursing or rehabilitative services for 60 straight days.
• There is no limit on the number of 90-day benefit periods a person can have in his or her lifetime (except in the case of hospitalization for mental illness).
• If the patient is hospitalized for more than 90 days, he or she can use up to 60 lifetime reserve days.
• Once these reserve days are used up, the patient (or the patient’s insurer) must pay for any additional hospital care.
• The patient’s lifetime reserve is not renewable.

A deductible is paid by the patient for the first 60 days, then the patient pays coinsurance of a specific dollar amount per day for any additional days up to 30 days.

• There is no coinsurance for the first 60 days of hospitalization in a spell of illness.
• There is a higher coinsurance for the lifetime reserve days. In 2006, this amount was $476 per day, up from $380 per day in 1997.

Extended post-hospital care in a skilled nursing facility for up to 100 days in each benefit period.

• The patient pays nothing for the first 20 days.
• The patient pays coinsurance of a specific dollar amount per day for any additional days up to a maximum of 80 days.
• The facility cannot be for custodial care only.
• Nursing care must be provided under the supervision of licensed physicians and registered nurses.

Unlimited post-hospital home health services as long as they are made under the orders of a physician. The patient pays 20% of the cost for any durable medical equipment.

Hospice care for terminally ill patients. The only cost to the patient is a 5% copayment for prescriptions and respite care.

Originally, Medicare payments were made to the hospital or nursing home on a “cost-plus” basis.  The facilities were guaranteed a certain profit above their costs of providing the care.  This was an expensive payment system that discouraged thrift because the more that the facilities spent, the more profit they made.

Beginning in 1983, a new payment system was instituted called the

Diagnosis Related Group (DRG).  Hospitals were subsequently paid a flat fee for each Medicare patient based on the initial diagnosis of illness. The DRG system is supposed to encourage thrift since the hospital makes more money if it can cure the patient and discharge him or her faster.  Some critics feel, however, that this new system now provides the hospitals with an incentive to undertreat the patient.

However, this incentive is mitigated by federal laws against “dumping” patients and by a requirement that all Medicare patients are entitled to “discharge planning.” Hospitals must notify patients that they have a right to a written discharge plan that informs them about health resources appropriate for their needs, such as nursing homes and home care.  Moreover, if a patient believes that the discharge was premature, an appeal to Social Security is available.

In addition, the private insurance market has now developed capitation insurance which provides coverage for the additional costs incurred by the hospital for patients needing care above the flat rate provided by Medicare.

Medicare Part A Services

The following inpatient services are covered under Part A:

• Semi-private room and board (two to four beds).
  • Part A will pay for a private room only if it is medically necessary.
  • If the patient requests a private room, Medicare will pay the cost of semi-private accommodations, and the patient will be responsible for the difference between a semiprivate and a private room.
  • All meals, including special diets.
  • Nursing services (other than private duty nurse) provided by or under the supervision of a licensed nursing staff.
  • Services of the hospital’s social workers.
  • Regular hospital equipment and supplies, such as oxygen tents, wheel chairs, crutches, casts, surgical dressings, and splints when routinely furnished by the hospital to all patients.
  • Certain equipment and supplies that are used by the patient while in the hospital continue to be covered after the patient has been discharged (e.g. cardiac pacemakers and artificial limbs).
  • Pharmaceuticals ordinarily provided by the hospital.
  • Therapeutic or diagnostic services ordinarily provided by the hospital or by others under arrangements made with the hospital.
  • Operating and recovery room costs including anesthesia services (hospital costs).
  • Services provided by interns and residents under an approved program.
  • Blood transfusions after the first three pints.
  • Radiology services and X-rays, including radiation therapy, billed by the hospital.
  • Lab tests.
  • Respiratory or inhalation therapy.
  • Independent clinical laboratory services under arrangement with the hospital.
  • Cost of special care units, such as intensive care or coronary care unit.
  • Rehabilitation services such as physical therapy, occupational therapy, speech therapy, etc.
  • Lung and heart-lung transplants for patients with end-stage pulmonary disease or cardiopulmonary disease as long as the transplant facility has been approved by Medicare.

Services Not Covered under Part A

• Services of physicians, surgeons, radiologists, pathologists, or anesthesiologists.
• Services of a private duty nurse unless the patient’s condition requires it.
• Personal convenience items, such as video rental, radio rental, etc.
• Supplies and equipment for use outside of the hospital unless further use is required.
• First three pints of blood.

Home Health Care under Part A

As noted earlier, home health care services can be an important benefit covered by Medicare.  The patient may be able to forestall entry into a nursing home or even entry into a hospital by using this important benefit.  Part A “home health services” are described as:

• Part-time or intermittent nursing care, physical therapy, or medical social services.
• Provided or supervised by a registered nurse, therapist, or other appropriate professional.
  • The care must require professional skills.
  • If the patient can safely perform the functions or if they can be performed by an unskilled person, the services will not be covered under Part A.
  • However, if the patient’s condition requires professional monitoring, other unskilled care may become skilled.
  • Provided to a person who is “homebound.”
    • The homebound patient does not have to be confined to a bed in order to qualify for home care services.
    • The patient can even occasionally leave the house with assistance.
    • But a person who is completely mobile or has only minor mobility problems will not qualify for home care services.
    • Provided to a person who is under the care of a doctor.
      • The doctor must certify that home care is required and must draft a plan of care.
      • This plan of care must specify why skilled care is required, what services are needed, and how long the skilled care services will be needed.
      • Provided by a licensed home health care agency.
      • The patient doesn’t pay anything for the home health visits except for a 20% coinsurance amount for durable medical equipment provided by the home health agencies.
      • Durable medical equipment includes such items as iron lungs, oxygen tents, hospital beds, and wheel chairs.
      • Even this 20% coinsurance amount can be waived for the purchase of certain used items.
      • The home health care covered by Part A must be either “part-time” or “intermittent.”
      • It is not necessary that home health care be both part-time and intermittent.
      • Intermittent means that a nurse comes to the patient’s home occasionally to check on his or her condition and the medication being taken.
      • Up to 28 hours per week of skilled and home care can be provided as long as it is not provided on a daily basis.
      • In addition, the patient’s condition does not have to be improving in order to qualify for home health care. Many chronically ill or even terminally ill patients require long-term home health care in order to keep them at home and semi-independent.
      • Moreover, once a patient qualifies for Part A home health care, Medicare will also cover “home health aide” services on a part time or intermediate basis. Home health aides provide services such as bathing, turning patients in bed, feeding, and colostomy care.