We work, we contribute, and when we turn 65, major medical expenses are covered by Medicare, right? Not always. Medicare beneficiaries can actually get stuck with huge hospital bills.

Maybe you heard about it on NPR or read about it in the New York Times. Current Medicare laws impose a financial burden on Medicare beneficiaries kept in a hospital under observation status.

Currently, hospitalized Medicare beneficiaries must have at least three consecutive days of “inpatient status” to qualify for recovery time in a skilled nursing facility (SNF). Some patients are unknowingly kept in the hospital with “observation status,” which may prevent Medicare from paying for SNF care. Under observation, some medications, procedures, and tests may also be excluded from Medicare coverage.

What’s more, you may not know the difference. You could spend several nights in the same ward as a patient with “inpatient status.” Without asking whether you have been officially admitted, you won’t know whether medical and nursing services, tests, medications and food are covered or not.

You’ve probably heard that SNF beds are not always available. In addition to a shortage, an SNF may refuse to admit a patient in need of treatment who fails to meet the three-day inpatient requirement if they can’t pay with other, non-Medicare funds.

As hospitals experience closer scrutiny on Medicare readmissions and the potential for reduced reimbursements from the

Centers for Medicare and Medicaid Services (CMS), they have increased the number of patients who are not admitted but kept for observation. Last summer, one good thing happened: CMS now allows doctors to admit a patient—with inpatient status—if there is a “reasonable expectation” of a longer stay.

But some problems persist:. Hospitals are able to reclassify a patient from inpatient to outpatient, after the fact—which works against the patient. And if a patient is switched from observation to inpatient status, the initial hospitalization does not count towards the three-day SNF requirement.

The Seattle-King County Advisory Council on Aging and Disability Services supports legislation that would change the law to count the entire time spent in the hospital—whether inpatient or outpatient observation status—toward the three-day inpatient status necessary for SNF coverage (dubbed the

Improving Access to Medicare Coverage Act of 2013). This bill is supported by the Bellevue Network on Aging and Kirkland Senior Council, as well as national advocacy organizations.

Even CMS says you should ask:

Are you a hospital inpatient or outpatient?. If you have Medicare, ask.

Tony Provine, who wrote this article, is chairman of the Seattle-King County Advisory Council on Aging and Disability Services, a 27-member body that advises the Area Agency on Aging. He wrote this article for the agency’s Agewise King County web site.