WASHINGTON, D.C. – Today, U.S. Sens. Sherrod Brown (D-OH), Susan Collins (R-ME), Bill Nelson (D-FL), and Shelley Moore Capito (R-WV) reintroduced their bipartisan legislation to update a current loophole in Medicare policy that would help protect seniors from high medical costs for the skilled nursing care they require after hospitalization. The Improving Access to Medicare Coverage Act, would allow for the time patients spend in the hospital under “observation status” to count toward the requisite three-day hospital stay for coverage of skilled nursing care.

Under the current Medicare policy, a beneficiary must have an “inpatient” hospital stay of at least three days in order for Medicare to cover post-hospitalization skilled nursing care. Patients that receive hospital care under “observation status” do not qualify for this benefit, even if their hospital stay lasts longer than three days.

“Seniors should be able to focus on their recovery instead of billing technicalities and sky high medical bills, or worse yet – trying to recover without the medical care they need because they can’t afford it,” said Senator Brown. “This legislation would improve access to the medical care seniors need, and saves money on hospital readmission costs.   It's a simple fix and the least we can do to protect our seniors from outrageous medical costs that they have no control over.”

“When seniors require hospitalization, their focus should be on their health and getting well, not on how they were admitted,” said Senator Collins, the Chairman of the Senate Aging Committee.  “The financial consequences of this distinction between an observation stay and inpatient admittance can be severe for seniors.  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.”

“Seniors have enough to worry about when they are taken to a hospital; they shouldn’t also have to worry about how that hospital is billing Medicare. This bill will help our seniors avoid the stress of potential unforeseen medical costs and focus on what’s most important: getting better,” said Senator Nelson.

“I’m glad to join with my colleagues to reintroduce the Improving Access to Medicare Coverage Act,” said Senator Capito. “This commonsense, bipartisan legislation will help ease the financial worry for seniors in need of skilled nursing care, and provide more certainty to patients and their families.”

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, 2017.

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. In a December 2016 report, the Office of the Inspector General of the Department of Health and Human Services found that an increased number of Medicare beneficiaries classified as outpatients are paying more for care that is substantively similar, and have limited access to skilled nursing facility care due to their patient status. 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 has been endorsed by more than 30 organizations, including: AARP, Alliance for Retired Americans, American Case Management Association, American Health Care Association, AMDA – The Society for Post-Acute and Long-Term Care Medicine, Center for Medicare Advocacy, LeadingAge, National Association of Elder Law Attorneys, 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, and the Society of Hospital Medicine.