This year, there has been a lot of attention given to an issue that is impacting hospital patients and their families called “observation stays.” To many people, this is an obscure, “in-the-weeds” problem. To the individuals that it affects, it’s the difference between receiving the care that a person needs or cutting recovery and rehabilitation short, which can have long-term negative effects on a person’s functional abilities and independence. The problem is growing, and thousands of Medicare beneficiaries from across the country are losing access to their Medicare Part A skilled nursing care facility benefits – all because of a hospital classification called “outpatient observation.”
Acute care hospitals are increasingly classifying their patients as receiving care referred to as observation services, which keeps them in an “outpatient” status, rather than admitting them as inpatients. Patients under observation are considered outpatients despite the fact that they may stay in a hospital bed for many days and nights receiving the same medical care that is provided to inpatients. However, there is one huge difference: outpatient stays at a hospital – even when identical to an inpatient stay – leave the patient out in the cold when it comes to post-hospital care in a skilled nursing facility. Before Medicare will pay for skilled nursing care, a patient must first spend three days in an inpatient hospital stay. Time spent under “observation” in a hospital will not count toward that three-day minimum.
Hospitals’ use of observation stays and the amount of time patients spend in observation status are both increasing. In July 2013, the Office of the Inspector General report found that in 2012, Medicare beneficiaries had more than 1.5 million observation stays, and beneficiaries had an additional 1.4 million long outpatient stays, some of which may have been observation stays.
In early 2013, Reps. Joseph Courtney (D-Conn.) and Tom Latham (R-Iowa) introduced the Improving Access to Medicare Coverage Act of 2013 (H.R. 1179) and Sen. Sherrod Brown (D-Ohio) introduced a companion bill, S. 569, cosponsored by Sen. Susan Collins (R-Maine). These bills would require that time spent in observation be counted towards meeting the three-day prior inpatient stay that is necessary to qualify for Medicare coverage in a skilled nursing facility.
As the legislation continues to gain support, many groups are leaning on Congress and the Centers for Medicare & Medicaid Services (CMS) to resolve this issue once and for all. In September, the Commission on Long-Term Care, created as part of the 2012 fiscal cliff deal to advise Congress on how to reform long-term services and supports, recommended that CMS count time spent in observation status toward meeting the prior three-day stay requirement, in line with the Improving Access to Medicare Coverage Act.
Protecting beneficiaries is the primary concern of a broad-based coalition of consumer advocates, providers, and professional associations that are working together to educate the public about this issue and affect change on Capitol Hill. The issue is gaining ground in Washington, and we are here to ensure that it does not fade away – that Congress continues to listen to Medicare patients and their advocates.
We must continue this momentum. More can be done – and more must be done. Patient advocates and provider groups alike are calling on policymakers to fix this problem once and for all, and enact into law the Improving Access to Medicare Coverage Act. Now is the time. Our aging population simply cannot afford to wait any longer for this issue to be addressed.
Parkinson is president and CEO of the American Health Care Association, and wrote this on behalf of the Observation Stays Coalition, whose members include: AARP; AMDA; Alliance for Retired Americans; American Case Management Association; American Health Care Association; American Medical Association; Center for Medicare Advocacy, Inc.; The Jewish Federation of North America; LeadingAge; Medicare Rights Center; National Academy of Elder Law Attorneys; National Association of Professional Geriatric Care Managers; National Association of State Long-Term Care Ombudsman Programs; National Center for Assisted Living; National Committee to Preserve Social Security and Medicare; National Consumer Voice for Quality Long-Term Care; National Senior Citizens Law Center; Society of Hospital Medicine.