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While Observation Status continues, recent weeks have seen a great increase in awareness of the problem.  In addition, support for legislation to end Observation Status has grown rapidly.

  • What is Observation Status?

Observation Status refers to the classification of hospital patients as "outpatients," even though, like inpatients, observation patients may stay for many days and nights in a hospital bed, receive medical and nursing care, diagnostic tests, treatments, supplies, medications, and food.  The classification of a hospitalized patient as an "outpatient" can cause many problems for the patient.  Most significantly, Medicare will not pay for a subsequent stay in a skilled nursing facility (nursing home).  In other words, patients placed on Observation must pay out-of-pocket for their nursing home care, with bills often totaling many thousands of dollars.  Read more

  • Observation in the News

Observation Status is making national headlines, and as more people become aware of the problem, discussions to solve it take on greater weight. Recent coverage includes:

  • NPR's Morning Edition, 09/04/13 – "For Hospital Patients, Observation Status Can Prove Costly"

"Toby Edelman, a senior attorney with the Center for Medicare Advocacy, has talked to hundreds of people with similar stories. She says, 'to deny people coverage in the nursing home because the hospital called them outpatients makes absolutely no sense.'"  Read or listen to more

  • Kaiser Health News, 09/04/13 – "FAQ: Hospital Observation Care Can Be Poorly Understood And Costly For Medicare Beneficiaries"

"More Medicare beneficiaries are entering hospitals as observation patients every year. The number rose 69 percent in five years…"  Read more

  • The Boston Globe, 08/30/13 – "Ex-Medicare Chief Urges Fix to Rule for Rehab Coverage"

"Former Medicare chief Donald Berwick said Obama administration officials should abandon a rule that is leaving many older Americans without coverage for expensive rehabilitation care after they leave the hospital. … 'The patient ends up holding the bag, and that’s not fair or appropriate,’ Berwick, a physician and a Democratic candidate for governor of Massachusetts, said in an interview this week."  Read more

  • Legislation to End Observation Status

As awareness of Observation Status has become more widespread, support has grown for HR 1179, the Improving Access to Medicare Coverage Act of 2013, legislation sponsored by Joe Courtney (D. Conn) to "Amend title XVIII (Medicare) of the Social Security Act to deem an individual receiving outpatient observation services in a hospital to be an inpatient with respect to satisfying the three-day inpatient hospital requirement in order to entitle the individual to Medicare coverage of any post-hospital extended care services in a skilled nursing facility (SNF)."  The bill currently has 93 bipartisan cosponsors, as well as the support of advocacy groups and industry groups.  See all 93 cosponsors and read more

  • Bagnall v. Sebelius

In addition to the pending legislation, the Center for Medicare Advocacy and co-counsel National Senior Citizens Law Center filed suit to end the problem of Observation Status.  Bagnall v. Sebelius (No. 3:11-cv-01703, D. Conn) states that the use of Observation Status violates the Medicare Act, the Freedom of Information Act, the Administrative Procedure Act, and the Due Process Clause of the Fifth Amendment to the Constitution.  The suit seeks declaratory and injunctive relief to end and correct the deprivation of Part A coverage by the use of observation status, and to provide notice and appeal rights for those placed in observation status.  Read more

The Center for Medicare Advocacy and other advocacy groups are hopeful that increased awareness of the Observation status problem will lead to a solution.

If your legislators do not already support HR 1179contact them and tell them how important it is!

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