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Legislation to educate consumers about their admission status during hospital treatment

By Staff | Jan 21, 2014

HARRISBURG — The Pennsylvania Health Care Association and Center for Assisted Living Management (PHCA/CALM) applauded Rep. Stan Saylor (R-York) for his introduction of legislation that would require hospitals to educate consumers about their admission status when being treated in a non-emergency room setting. The legislation’s goal is to reduce the growing problem of seniors receiving care in hospitals on “observation status” and later finding they are not eligible for post-acute care covered by Medicare.

House Bill 1907, known as the “Hospital Observation Status Consumer Notification Act,” would require a hospital to provide oral and written notice to a patient if he or she is receiving care as an “outpatient” under “observation status” rather than being admitted as an “inpatient,” and to explain the ramifications of this admission status upon the patient’s insurance coverage.

“No older person who needs rehabilitation after a hospital stay should face an enormous medical bill simply because the hospital chose to hold them in observation status rather than inpatient status. Many seniors don’t even realize they weren’t admitted to the hospital until it’s time for rehabilitation and they are told their insurance doesn’t cover their nursing home bills,” said Stuart H. Shapiro, M.D., PHCA/CALM President and CEO. “Representative Saylor and the many legislators who co-signed this bill should be commended for introducing this important measure of protection.”

The legislation was crafted to address the growing trend of hospitals caring for patients for days, even weeks, without formally admitting them as patients. The hospitals classify these individuals as “outpatient” even though they are receiving care in a hospital room. This classification system has serious and costly financial implications for patients whose insurance will not cover outpatient care — and especially for seniors, who often need post-acute care in a skilled nursing facility following a hospital stay.

Medicare pays for up to 100 days of post-acute rehabilitation care in a skilled nursing facility following a three-day, inpatient hospital stay. However, if the Medicare beneficiary is an outpatient under observation status, Medicare will not cover the cost.

The legislation directs a hospital to provide oral and written notification to a patient of his or her outpatient status if the individual has not been formally admitted as an inpatient and is being treated outside of the emergency room, including being provided with a hospital bed and meals, for more than 23 consecutive hours. The bill also stipulates that a hospital train staff members who would communicate with patients about outpatient status and potential financial implications.

The measure builds upon federal legislation introduced earlier in 2013 that would count a patient’s time in the hospital as an outpatient in observation status toward the three-day mandatory inpatient stay threshold for Medicare to cover post-acute skilled nursing care.

An Office of Inspector General analysis of 2012 Medicare claims showed that more than 600,000 hospital stays of at least three nights were labeled observation stays.

As a result, thousands of otherwise eligible individuals did not qualify for Medicare nursing home coverage, which mandates 72 hours as an inpatient as a prerequisite.

PHCA/CALM is a statewide advocacy organization for Pennsylvania’s most vulnerable older residents and their providers of care. Members comprise for-profit, nonprofit and government providers. Together, they represent more than 425 long-term care and senior service providers that care for nearly 45,000 elderly and disabled individuals. For more information call 717-221-1800 or visit www.phca.org/ or www.calmpa.org.