Congress should include protections for Medicare patients assigned "observation status" in the hospital as part of effort to combat surprise medical bills

As part of a bipartisan movement on Capitol Hill to confront “surprise medical bills,” Senators Patty Murray (D-WA) and Lamar Alexander (R-TN) are crafting legislation that would protect patients against unexpected health care expenses.  But the Senators’ bill currently does not address one of the rudest surprises of all:  when Medicare patients discover that they are on the hook for thousands of dollars in skilled nursing care costs because of the way they were classified during a hospital stay.

Hospitals often deem seniors who are – for all intents and purposes – inpatients as being on “observation status” – even if they remain in the hospital for several days.  Those patients are then ineligible for Medicare coverage of skilled nursing care once they are discharged. 

“The classification as observation patient is significant… because the Medicare statute covers a post-hospital stay in a skilled nursing facility only if the patient was hospitalized for three consecutive days as an inpatient.” – National Observation Stays Coalition, 6/5/19

Many hospital patients do not realize they were placed on “observation status” – or even know to ask.  They often don’t learn that they’re liable for the full cost of skilled nursing care until a bill arrives weeks or months later.  Those bills can total $10,000 per month – and in some cases, more.  That’s an untenable burden for seniors on fixed incomes.

The National Observation Stays Coalition (of which the National Committee to Preserve Social Security and Medicare is a member) is pushing Congress to protect Medicare patients from these surprise bills as it moves forward with bipartisan legislation.  The Coalition supports the provisions of the Improving Access to Medicare Coverage Act, sponsored by Senators Sherrod Brown (D-OH), Susan Collins (R-ME), Sheldon Whitehouse (D-RI) and Shelley Moore Capito (R-WV).

“The Improving Access to Medicare Coverage Act would allow for the time patients spend in the hospital under ‘observation status’ to count toward the requisite three-day hospital stay for coverage of skilled nursing care.  [This] is a common sense policy that does not affect hospital care – but does protect the ability of beneficiaries to receive needed post-acute nursing home care.” – National Observation Stays Coalition, 6/5/19

The Coalition sent a letter today to Senators Murray and Alexander, urging them to incorporate these protections into their ‘surprise medical billing’ legislation.  “It is simply not right to limit access to quality care for those most in need,” says the Coalition’s letter, which was signed by the National Committee. “Now is the time for Congress to pass legislation that addresses this issue once and for all.”