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Skilled nursing care centers serve our most vulnerable citizens – frail elders and those with disabilities who need complex medical, rehabilitative, and restorative care, 24 hours a day, 7 days a week. But under the current Medicare law, thousands are not receiving critical nursing care and getting stuck with high medical bills after leaving the hospital.  

Hospital patients must be classified as an inpatient for at least three consecutive days in order for Medicare to pay for rehabilitation care in a skilled nursing care center. However, hospitals are increasingly holding patients under “observation,” an outpatient designation, rather than admitting them as inpatients. As a result, outpatients who need follow-up care do not qualify for Medicare coverage in a nursing center, leaving those in need of critical care on their own or in debt with thousands in out-of-pocket costs.

The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) continues to keep the observation stays issue one of its top advocacy priorities and supports legislation that will fix this confusing policy.

Learn more about the observation issue here and the impact on Medicare beneficiaries here and here.

25 National Organizations Sign Letter to CMS on the Observation Stays Matter
Dana Halvorson and James Michel

On June 20, 2017, 25 organizations, including AHCA/NCAL, submitted a comment letter to the Centers for Medicare & Medicaid Services outlining a regulatory fix relating to the observation stays matter.  The organizations that signed the letter are members of a broad coalition of beneficiary and provider advocacy groups who are dedicated to preserving Medicare beneficiaries’ access to necessary skilled nursing care following a hospital stay, regardless of whether that stay was classified as inpatient or outpatient observation.  Under current law, a Medicare beneficiary must spend at least three days as a hospital inpatient for Medicare to cover a subsequent stay in a skilled nursing center (known as the “SNF 3-day rule”).

AHCA/NCAL continues to keep the observation stays issue one of its top advocacy and outreach priorities.  Increasingly, patients have no idea what their status is in a hospital, or the importance of it, which can lead to thousands of dollars in out-of-pocket medical expenses should they need skilled nursing center care following their hospital stay.  In addition to placing a financial burden on seniors and their families, this anomaly in Medicare rules can cause unnecessary spend-down, accelerating the time frame in which seniors will have to turn to programs such as Medicaid to pay for their care.  For more information about the observation stays issue, please visit the AHCA/NCAL website.

One in five Medicare patients returns to the hospital after ‘observation stays’
Dana Halvorson

According to a June 20, 2017, YaleNews article, “as many as one in five older Medicare patients returns to the hospital after an observation stay, or short-term outpatient stay,” a Yale-led study found.  The article goes on to note that “this high rate of revisit to the hospital points to a hidden vulnerability among these patients, and suggests changes in care might be needed, the researchers said.” The study was published online June 20 in The BMJ.

New Federal Law, Hospitals Now Must Tell Medicare Patients When Care Is ‘Observation’ Only
Dana Halvorson

According to a March 13, 2017, article from Kaiser Health News, written by Susan Jaffe, “hospitals across the country must now alert Medicare patients when they are getting observation care and why they were not admitted — even if they stay in the hospital a few nights. For years, seniors often found out only when they got surprise bills for the services Medicare doesn’t cover for observation patients, including some drugs and expensive nursing home care. The notice may cushion the shock but probably not settle the issue.” You can read the full article here.

As you may know, the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act) was enacted on August 6, 2015. The NOTICE Act requires all hospitals and critical access hospitals to provide written and oral notification under specified guidelines to beneficiaries that they are an outpatient receiving observation services and are not an inpatient by no later than March 8, 2017. AHCA/NCAL believes the NOTICE Act law is an important step forward. To learn more about the NOTICE Act and the observation stays issue, please visit the AHCA/NCAL website.