Medicare rules can leave seniors with unexpected costs

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Hospitals are increasingly placing elderly patients on "observation status," which means that even if they spend several days in a hospital they're still considered an outpatient.

Medicare beneficiaries may not know what their patient status is, or what ramifications that status has on the services the program will cover, advocates say.

Medicare rules requiring seniors to receive three days of inpatient treatment prior to paying for follow-up care in a nursing home has left many on the hook for thousands in medical bills.

Lois Whitmore, 71, of Essex Junction, a Medicare beneficiary, said she learned about the problem from a friend whose husband uses a pacemaker.

The friend's husband went to the hospital for complications related to his heart condition, and Whitmore's friend told her, "I hope they don't put him in observation status, because then his rehab stay won't be covered."