The use of “Observation Status” – treating certain hospitalized Medicare patients as outpatients when their care is indistinguishable from that of formally admitted inpatients – continues to garner considerable public and Congressional attention. It remains an unresolved problem that has serious financial consequences for Medicare patients and their families.[1]   On July 30, 2014, the Senate … Read more

Introduction How to Use This Packet Observation Status Self-Help Federal Regulations – Requirements for Medicare Coverage for Skilled Nursing Facility Care Pertinent Federal Regulations for Medicare Appeals INTRODUCTION Dear Medicare Patient: The Center for Medicare Advocacy has produced this Self-Help Packet to help you understand Observation Status and options for beneficiaries who are placed on … Read more

Connecticut Passes Observation Notice Law On June 12, 2014, Connecticut Governor Dannel P. Malloy signed into law a requirement that, starting October 1, 2014, Connecticut hospitals give oral and written notice to patients placed on observation status for 24 hours or more.  Similar laws already exist in New York and Maryland.  Specifically, Connecticut's law requires: … Read more

May 21, 2014 The May 20, 2014 hearing on "Current Hospital Issues in the Medicare Program," held by the Health Subcommittee of the House Committee on Ways and Means, was the first Congressional hearing to consider the impact of observation status on hospitalized Medicare patients.[1]  At the hearing, the Center for Medicare Advocacy's Senior Policy … Read more

Center for Medicare Advocacy Senior Policy Attorney Toby S. Edelman will testify before the House Ways and Means Health Subcommittee on Tuesday, May 20, 2014 at 9:30 AM regarding current hospital issues in the Medicare program, specifically the ongoing problem of observation status. The hearing, announced on May 13th, is the first Congressional hearing to … Read more

The use of Medicare observation status in hospitals has increased dramatically over the past several years.[1] The most notable adverse consequence of Observation Status on beneficiaries is financial liability for any post-hospitalization care at a Skilled Nursing Facility.[2] However, many of the beneficiaries the Center assists also find themselves facing large hospital bills for drugs … Read more

Final rules published in August 2013 by the Centers for Medicare & Medicaid Services (CMS) created time-based rules for determining inpatient status in an acute-care hospital.[1]  Under the rules' two-midnight presumption, a physician should order an inpatient admission if the physician expects that the patient's stay in the acute care hospital will be at least … Read more

As our client, Ms. Bricout states in this video, Observation Status is simply "illogical."  But there is a sound, viable solution! Congressman Joe Courtney has a bill pending in Congress that would fix the observation status problem for good: the Improving Access to Medicare Coverage Act of 2015 (H.R. 1571 and S. 843).

>Hospitals' increasing use of observation status harms more Medicare beneficiaries daily as patients hospitalized for multiple days are denied coverage of subsequent care in a skilled nursing facility because their time in the hospital was labeled "outpatient," not "inpatient."[1]  Since the enactment of the Medicare program nearly 50 years ago, Medicare has limited payment for … Read more

On September 23, a federal judge in Connecticut dismissed a lawsuit filed by the Center for Medicare Advocacy and the National Senior Citizens Law Center on behalf of Medicare beneficiaries who have been placed on "observation status."[1]  When hospital patients are placed on observation status they are labeled "outpatients," even though they are often on … Read more

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 … Read more

Effective October 1, 2013, new rules for inpatient hospital reimbursement under the Medicare program[1] make final two sets of proposed rules that the Centers for Medicare & Medicaid Services (CMS) published in the Spring 2013 – the definition of an inpatient hospital stay based on time[2] and a hospital rebilling option.[3]  Neither set resolves the … Read more

1.  PRESENTATION:  UPDATE ON HOSPITAL OBSERVATION STATUS  Observation status is getting a lot of attention from Congress, the media, and researchers.  The bipartisan federal legislation, the Improving Access to Medicare Coverage Act of 2013, has gotten more cosponsors daily.  As of August 6, the House bill, H.R. 1179, introduced by Congressman Joseph Courtney (D, CT), … Read more

Joining the discussion about hospitals' extended use of observation status, the Department of Health and Human Services' Office of Inspector General (OIG) has issued a memorandum report that describes the nationwide use of observation and outpatient stays in calendar year 2012.  OIG reports that more than 600,000 Medicare beneficiaries had hospital stays lasting at least … Read more

NATIONAL MEDICARE ADVOCATES ALLIANCE CALL Monday, August 12, 2013 – 2:00 P.M., Eastern Time Call-in Number: 1 (888) 206-2266 Pass Code: 9874704  Note: We ask people calling from the same location to gather around one telephone. This frees up lines and holds down costs. Please ensure your line is on MUTE for the duration of the call … Read more

Although a large and increasing number of Senators and Representatives now support bipartisan legislation to solve the problem of Observation Status, many beneficiaries and their families continue to face this outpatient status as a barrier to Medicare coverage of care in a skilled nursing facility.  This Alert describes the continuing problem, Congressional legislation, a survey … Read more

Medicare beneficiaries are being denied access to Medicare’s skilled nursing facility (SNF) benefit because acute care hospitals are increasingly classifying their patients as “outpatients” receiving observation services, rather than admitting them as inpatients.  Patients are called outpatients despite the fact that they may stay for many days and nights in hospital beds and receive medical … Read more

Thank you for contacting your legislators.  Every call or letter makes a difference. If you made a call, and haven't already let us know, please click here to tell us your story was heard. And now that you've made a difference, why not spread the word?  Tell your friends why Observation Status hurts Medicare beneficiaries … Read more

As part of the annual update to inpatient hospital reimbursement under the Medicare program, the Centers for Medicare & Medicaid Services (CMS) is again considering observation status.  This time CMS is proposing "a time-based presumption of medical necessity for hospital inpatient services based on the beneficiary's length of stay."  78 Fed. Reg. 27486, 47644 (May … Read more

$30,000 – that’s Mrs. Kauffman’s nursing home bill for care she received following a three-day hospitalization. Although she was in the hospital for three full days, Mrs. Kauffman was never admitted as an inpatient. Instead, she was classified as an outpatient on "observation status."  Because Medicare coverage for nursing home care is only available after … Read more

The Center for Medicare & Medicaid Services (CMS) recently issued proposed rules and an interim CMS Ruling to allow  hospitals to bill Medicare Part B after a Part A claim is denied. 78 Fed. Reg. 16,632 (March 18, 2013).[1]  These actions address some financial concerns of hospitals about “observation status;” but they do not help … Read more

Increasingly, hospital patients throughout the country are learning they are considered outpatients, on "observation status," not inpatients, although they have stayed many days and nights and been treated IN a hospital. The Center has written extensively about this practice and is pursuing litigation to challenge it in federal court.  Among the harmful consequences of observation … Read more

On July 30, 2012, as part of proposed rulemaking on the outpatient prospective payment system, the Centers for Medicare & Medicaid Services (CMS) asked for public comment on potential policy options related to "observation status."[1] What is Observation Status? Observation status refers to the classification of a patient in an acute care hospital as an … Read more

August 9, 2012 Note to Alert readers: This Posted version contains additional information beyond that in the emailed version. As part of a notice of proposed rulemaking published in the Federal Register on July 30, 2012, the Centers for Medicare & Medicaid Services (CMS) is asking for public comments on potential policy changes related to … Read more

Hospital case managers and the hospital industry have joined the chorus of those opposed to observation status – a designation that renders a beneficiary ineligible for Medicare-covered skilled nursing facility (SNF) care.  This Alert discusses a recent survey by the American Case Management Association and an amicus brief filed by the American Hospital Association in … Read more

Since 2008, the Center for Medicare Advocacy (the Center) has been reporting that an increasing number of Medicare beneficiaries are being placed in acute care hospital beds for multiple days – receiving medical and nursing care, diagnostic tests, treatments, medications, and food – but are being called “outpatients” in observation status, rather than admitted “inpatients.”[1]  … Read more

The Center for Medicare Advocacy has heard increasingly about beneficiaries throughout the country whose entire stays in a hospital, including stays as long as 14 days, are classified by the hospital as outpatient observation.  In some instances, the beneficiaries' physicians order their admission, but the hospital retroactively reverses the decision.  As a consequence of the classification of … Read more

A lawsuit was filed on November 3, 2011 by the Center for Medicare Advocacy, and co-counsel National Senior Citizens Law Center, seeking to end the use of hospital "Observation Status" (Bagnall v. Sebelius (No. 3:11-cv-01703, D. Conn)).  The suit was filed on behalf of seven individual plaintiffs from three states who represent a nationwide class of people … Read more

Coalition Urges Congress to Pass Legislation Safeguarding Medicare Beneficiaries' Skilled Nursing Care For Immediate Release October 21, 2012   Terry Berthelot 860-456-7790 Toby Edelman 202-293-5760 Washington, DC. – A Congressional briefing on "observation status," sponsored by Congressman Joe Courtney (D. CT), was held yesterday afternoon to examine Medicare beneficiaries' being denied Medicare coverage for care … Read more

Max Richtman, Chair May 20, 2011 The Honorable John Kerry The Honorable Olympia Snowe United States Senate Washington, DC 20510 The Honorable Joe Courtney The Honorable Tom Latham United States House of Representatives Washington, DC 20515 Dear Senators Kerry and Snowe and Representatives Courtney and Latham: The Leadership Council of Aging Organizations (LCAO) – a … Read more

The Center is part of a coalition of organizations fighting the continued harm caused by Observation Status through advocacy and education, efforts which will be greatly enhanced by our work with the John A. Hartford foundation. In addition, The Center for Medicare Advocacy, along with co-counsel Justice in Aging and Wilson Sonsini Goodrich & Rosati, … Read more

Is It a Hospital Stay? Not When It’s “Observation”

The Center for Medicare Advocacy repeatedly hears about Medicare beneficiaries throughout the country whose entire stay in a hospital, including stays as long as 14 days, is classified by the hospital as outpatient observation. As a consequence of the classification of a hospital stay as outpatient observation, beneficiaries are charged for various services they received … Read more

“Observation” is the term used to describe the outpatient status of a patient who is in a hospital, but not as an inpatient. Although the Medicare Manuals limit observation to 24-48 hours, many beneficiaries nationwide are experiencing extended stays in acute care hospitals under observation. A major consequence for beneficiaries of not being classified as … Read more

What are Observation Services? CMS Brochure Favorable Decisions What Should Beneficiaries and their Advocates Do? Continuing Work Being in a hospital bed in a Medicare-participating hospital is no guarantee that a Medicare beneficiary is an inpatient.  In our December 11, 2008 Alert, the Center for Medicare Advocacy described the increasingly common practice of placing Medicare … Read more

Advocates at the Center for Medicare Advocacy are working on a case involving an individual who was in a hospital bed for four days but was never "formally admitted". Instead, the hospital accorded her "observation status". Although Medicare Part B covered her, she has not only not been unable to obtain a determination of Part … Read more

The Medicare statute and regulations authorize payment for skilled nursing facility (SNF) care for a beneficiary who, among other requirements, was a hospital inpatient for at least three days before the admission to the SNF.  The Center for Medicare Advocacy has written before about difficulties in calculating hospital time for purposes of using Medicare's post-acute … Read more

Advocates at the Center for Medicare Advocacy recently settled a case involving an individual who was in a hospital bed for four days but was never "formally admitted ". Instead, the hospital accorded her "observation status ". Although Medicare Part B covered her, she was not only not unable to obtain a determination of Part … Read more

No. 3:00CV563(AVC), filed March 24, 2000 Updated: April 19, 2001 Issue: (1) Whether a four-day stay in a hospital can be considered “outpatient observation” status and thus preclude meeting the 3-day qualifying condition for post-hospital skilled nursing facility care; (2) whether a hospital’s refusal to submit a Part A claim, and thus to keep the … Read more

COVID-19 Updates – 3/26/2020 Federal Court Orders Appeal Rights on “Observation Status” Issue for Certain Medicare Hospital Patients CMS Temporarily Waives Medicare Access Barriers for Skilled Nursing Facility Care New Guidance On Nursing Home Health Inspections Severely Limits Oversight and Enforcement for a Three-Week Period Free Webinar: Medicare & Health Care Updates Register for the … Read more

On March 13, 2020, President Trump proclaimed the COVID-19 pandemic a national emergency. As a result, the U.S. Department of Health and Human Services (HHS) now has the authority under Section 1135 of the Social Security Act to waive or modify certain requirements of public health programs, including Medicare. The Centers for Medicare & Medicaid … Read more

Medicare Coverage of Home Health Care Has Not Changed Under the New Payment System (PDGM) Massachusetts Task Force Calls for Closure of Low-Performing, Low Occupancy Nursing Facilities Register Now – Upcoming CMA Events 7th Annual National Voices of Medicare Summit and Senator Jay Rockefeller Lecture  Free Webinar: Medicare Home Health Updates in Light of the … Read more

Background.  On January 1, 2020, the Centers for Medicare & Medicaid Services (CMS) began implementing a new Medicare payment system—“Patient Driven Groupings Model” (PDGM)—for home health services. Under PDGM, home health agencies have a new set of financial incentives to consider when admitting and continuing care for Medicare beneficiaries. Unfortunately, those financial incentives are harmful … Read more

Supreme Court Allows Harmful “Public Charge” Immigration Rule to Continue – For Now Accountable Care Organizations and Observation Status Medicare SNF Payment Model Creates Changes in Care and Admissions – What about Facility Assessments? Study Finds Nursing Home Compare Data about Patient Falls with Major Injuries Underreported and “Highly Inaccurate”  Support Medically Necessary Oral Health Care … Read more

The new Medicare reimbursement system for skilled nursing facilities (SNFs) – the Patient-Driven Payment Model (PDPM) – fundamentally changes the financial incentives for facilities. With PDPM, Medicare now pays lower rates for residents needing therapy and higher rates for residents needing complex nursing care. Responding to these financial incentives, SNFs laid off therapists across the … Read more

Nursing Facilities and Medicare Advantage: If You Can’t Beat ’Em, Join ’Em . . . But What About the Medicare Beneficiaries? Free Webinar – Medicare Patient Driven Payment Model: What Does It Mean for Skilled Nursing Facility Residents? Elder Justice Newsletter – Our Latest Edition Reminder – Joint Statement on Nursing Home Aide Training  Nursing … Read more

Skilled nursing facilities (SNFs) do not like the prior authorization requirements, limited lengths of stay for residents, and lower Medicare reimbursement rates that are associated with Medicare Advantage (MA) plans. Some SNFs are responding to these concerns by starting their own special type of MA plan called an Institutional Special Needs Plan (I-SNP). I-SNPs are … Read more

Most Read <i>CMA Alerts</i> (Plus, Webinars) of 2019

As 2019 winds down, we took a look back at the CMA Alerts you were most interested in over the last twelve months. News about skilled nursing facilities featured highly, as did Medicare payment changes. Interest in Medicare coverage of oral health remains high, and of course, you continued to follow the ongoing issues of … Read more

 WAYS & MEANS COMMITTEE HEARING “CARING FOR AGING AMERICANS” November 14, 2019 STATEMENT FOR THE RECORD Statement of Toby S. Edelman Senior Policy Attorney Center for Medicare Advocacy 1025 Connecticut Avenue, N.W., Suite 709 Washington, DC  20036 (202) 293-5760 The Center for Medicare Advocacy (Center) is a national, private, non-profit law organization, founded in 1986, … Read more

What does Medicare cover? When does Medicare cover skilled nursing facility care? Can a patient who is receiving non-skilled “custodial” services receive Medicare coverage in a SNF? What are examples of skilled services in a SNF? Are there any tools for comparing nursing facilities? For further information, follow one of the links below or scroll … Read more

(The views expressed in this Issue Brief and during the Alliance call are solely those of the Center for Medicare Advocacy.) I. ENROLLMENT PERIOD UPDATES Overview The Annual Coordinated Election Period (ACEP) – the period during which individuals with Medicare can make coverage elections for the following year – ends on December 7th.  As discussed … Read more