A Maine hospital administrator will testify Wednesday in Washington, D.C., on the increasing use and financial impacts of “observation stays” for Medicare patients.

Bob Armstrong, vice president of elder care services at St. Mary’s Health System in Lewiston, is scheduled to testify before the Senate Special Committee on Aging, which is led by Chairman Bill Nelson, a Florida Democrat, and the ranking Republican member, Susan Collins of Maine.

Hospitals increasingly admit Medicare patients under “observation” status rather than formal “inpatient” status to avoid Medicare scrutiny or penalties that can be incurred for too-short inpatient stays or high inpatient readmission rates. The hearing comes amid growing criticism from Medicare patients who say observation stays have cost them thousands of dollars out of pocket for subsequent rehabilitation or skilled-nursing care, outpatient co-payments and prescription drugs.

“The increase in hospital observation stays has caused severe financial consequences for many seniors,” Collins said in a prepared statement.

One of those seniors is 87-year-old Thelma Sensecqua of Portland. Last year, she went to Maine Medical Center complaining of severe chest pain and was held under observation for five days, said Dot Sensecqua, her daughter-in-law. Then she spent a month in a skilled-nursing facility, which cost her about $9,100 because Medicare wouldn’t cover the bill.

“Coming up with that money was a real hardship for her,” Dot Sensecqua said. “She had to dip into what little savings she has.”

When a Medicare beneficiary enters a hospital, a physician must decide whether to admit the person under inpatient or observation status. Traditionally, hospitals provide observation care for patients who are not well enough to go home but not sick enough to be formally admitted. However, Medicare won’t cover follow-up care unless a patient spends at least three full days in a hospital under inpatient status.

Hospitals altered admissions practices after the federal Centers for Medicare and Medicaid Services raised concerns about short inpatient stays for treatment that could have been provided in an outpatient setting.

More recently, CMS began focusing on inpatient readmission rates as a way to improve care and reduce costs. Medicare imposes penalties when a hospital has too many inpatients who return within 30 days of discharge, so some doctors admit patients for observation.

Collins co-sponsored legislation last year that would count any time spent in a hospital toward the three-day requirement for follow-up care coverage. The bill is pending in the Senate Finance Committee.