Obama signs Medicare observation stays bill

CAL/AAEM News Service calaaem.news.service1 at gmail.com
Mon Aug 17 20:42:45 PDT 2015



 

August 7, 2015

 

Obama signs Medicare observation stays bill 

 

 

 
<http://www.modernhealthcare.com/article/20150807/NEWS/150809895?utm_source=
modernhealthcare&utm_medium=email&utm_content=20150807-NEWS-150809895&utm_ca
mpaign=financedaily> Modern Healthcare

 

 

By Virgil Dickson

 

President Barack Obama has signed a bill that requires hospitals to notify
Medicare patients when they are receiving observation care but have not been
admitted.

 

The bill is meant to help address a recurring problem for beneficiaries who
face sticker shock when they go to a skilled-nursing or rehab facility after
leaving the hospital and find that Medicare won't cover the tab. That's
because to qualify for skilled-nursing facility coverage, beneficiaries must
first spend three consecutive midnights as an admitted patient in a
hospital; observation days don't count. 

 

Another common issue is beneficiaries facing unexpected Medicare Part B
copays for drugs received during hospital care, since they were never
actually admitted into the hospital and the drugs therefore are not covered
under Part A.

 

The Notice of Observation Treatment and Implication for Care Eligibility Act
would require hospitals to notify beneficiaries receiving observation
services for more than 24 hours of their status as an outpatient under
observation. The written notification would have to explain that because the
beneficiary is receiving outpatient rather than inpatient services, they
will be subject to cost-sharing requirements that apply to outpatient
services. The notice also must say that the beneficiary's outpatient stay
will not count toward the three-day inpatient stay required for a
beneficiary to be eligible for Medicare coverage of subsequent
skilled-nursing facility services.

 

Legal experts remain incredulous the bill will actually help address these
scenarios, as it gives beneficiaries no formal recourse to change their
status once they find out they're at a hospital on an observational basis.

 

"The new law will not cure these problems, but will at least give patients a
warning before they spend thousands of dollars on care that will not be
covered by Medicare," Jeff Marshall, an elder law attorney in Pennsylvania,
said in an analysis. "Some beneficiaries will likely decide to receive a
different set of medical services after being notified of their observation
status."

 

Still, advocates are pleased despite the bill lacking a formal recourse
path. "Medicare beneficiaries need to know what their hospital admission
status is and how it affects their out-of-pocket expenses," said Andrew
Scholnick, a senior legislative representative at AARP.

 

"While this does not address all the issues associated with observation
care, such as counting time in observation toward the three-day rule for
receiving skilled-nursing care, it helps educate consumers and protects
individuals from surprise hospital bills," Scholnick added.

 

Provider groups such as the American Hospital Association and the American
Academy of Family Physicians have also expressed support for the law.

 

The next step is that the CMS must begin the rule-making cycle and release
the rule for public comment. The agency has released no timeline for when
this process will occur.

 

 

 

Jeff Wells
Deputy Editor, CAL/AAEM News Service

 

Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service

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