Brown, Collins, Nelson, Capito Introduce Bill to End Arbitrary Medicare Policy that Leaves Seniors with Unfair Costs After Receiving Necessary Care

Bipartisan Bill Would Fix Current Policy That Doesn’t Provide Medicare Coverage to Seniors Hospitalized on “Observation Status”

WASHINGTON, D.C. – Today, U.S. Sens. Sherrod Brown (D-OH), Susan Collins (R-ME), Bill Nelson (D-FL), and Shelley Moore Capito (R-W.Va.) introduced legislation to end a Medicare policy that causes seniors to be charged unknowingly with high, unfair costs after receiving needed post-acute medical care. Currently, a Medicare beneficiary must have an “inpatient” hospital stay of at least three days in order for Medicare to pay for post-hospitalization skilled nursing care. Patients that receive hospital care on “observation status” are left to pay for skilled nursing care, even if their hospitalization lasts longer than three days.

“The last thing seniors should worry about after being hospitalized is their Medicare coverage. But far too many seniors don’t know if their hospitalizations are under observation status, only to find out after that Medicare won’t cover their nursing home stays,” said Brown. “This bipartisan bill would make sure seniors receive the care they need after hospitalization without additional costs so they can focus on their health and recovery instead of how they’ll afford their care.”

“As Chairman of the Senate Special Committee on Aging, encouraging action on issues important to seniors remains one of my top priorities,” said Collins. “I’m proud to support legislation that helps protect seniors from the severe financial consequences many older Americans are currently incurring from the increased usage of observation stays. This bipartisan bill would deem time spent in observation status as inpatient care for the purpose of the Medicare three-day prior hospital stay requirement for skilled nursing care, which will help insulate older Americans from undue out-of-pocket costs and ensure that they get the care that they need.”

“When seniors are taken to the hospital they shouldn’t have to worry about which code the hospital uses to bill Medicare,” said Nelson. “This legislation seeks to eliminate that concern by simplifying the billing process hospitals use when caring for our seniors.”

“This important legislation will provide certainty to seniors who are in need of skilled nursing care and take away a source of significant financial worry for patients and their families,” said Capito.  “I am proud to join my colleagues to introduce this bipartisan legislation that will end confusion and help seniors access the care they need.”

The Improving Access to Medicare Coverage Act (S. 843) would allow patients’ time under “observation status” to count toward the requisite three-day hospital stay for coverage of skilled nursing care. Specifically, the bill would:

  • Amend Medicare law to count a beneficiary’s time spent in the hospital on “observation status” towards the three-day hospital stay requirement for skilled nursing care; and
  • Establish a 90-day appeal period following passage for those that have a qualifying hospital stay and have been denied skilled nursing care after January 1, 2015.

According to the Centers for Medicare and Medicaid Services (CMS), outpatient classification is intended for providers to run tests and evaluate patients in order to arrive at appropriate diagnoses and treatment plans, or to provide brief episodes of treatment. Typical services that are not considered “inpatient” involve emergency department services, outpatient surgery, lab testing, or x-rays. For the purposes of counting inpatient days, CMS considers a person an “inpatient” on the first day that the patient is formally admitted to the hospital because of a doctor’s order the last is the day before discharge.

The Improving Access to Medicare Coverage Act is endorsed by the following organizations: American Association of Retired Persons (AARP), American Health Care Association (AHCA), Association of Jewish Aging Services (AJAS), Alliance for Retired Americans, American College of Emergency Physicians, Society for Post-Acute and Long-Term Care Medicine (AMDA), Center for Medicare Advocacy, Coalition for Geriatric Nursing Organizations, Jewish Federations of North America, Justice in Aging, Leadership Council of Aging Organizations, LeadingAge, Lutheran Services in America, Medicare Rights Center, National Association of Area Agencies on Aging (n4a), National Academy of Elder Law Attorneys (NAELA), National Association of Professional Geriatric Care Managers, National Association for the Support of Long Term Care, National Association of State Long-Term Care Ombudsman Program, National Center for Assisted Living, National Committee to Preserve Social Security and Medicare, Society of Hospital Medication, and Special Needs Alliance.