The U.S. Senate unanimously approved legislation August 3 requiring hospitals across the nation to tell Medicare patients when they receive observation care, but have not been admitted to the hospital for “in-patient” care.  It’s a distinction that’s easy to miss until patients are hit with big medical bills after a short stay.  The vote follows overwhelming approval in the U. S. House of Representatives in March.  The legislation is expected to be signed into law by President Barack Obama, said its House sponsor, Texas Democratic Rep. Lloyd Doggett.  It’s called the NOTICE Act, short for “Notice of Observation Treatment and Implication for Care Eligibility.”  The law would require hospitals to provide written notification to patients 24 hours after receiving observation care, explaining that they have not been admitted to the hospital, the reasons why, and the potential financial implications.
As noted in our June article, a Medicare beneficiary who is admitted on an inpatient basis to a hospital for at least three nights is normally entitled to Medicare benefits post-discharge for skilled care in a rehabilitation center or nursing home.  Part A can cover nursing home rehab or skilled care 100% of the first 20 days and all but $157.50 per day for up to an additional 80 days of treatment, but this benefit is only available after an “inpatient” hospital stay for the required three nights.
Unknown to many Medicare beneficiaries, Medicare for many years has differentiated between Medicare beneficiaries admitted as inpatients whose hospital stays are covered by Medicare Part A and Medicare beneficiaries admitted as outpatients for observation (outpatient care) to determine whether it is necessary to admit the beneficiary as an “inpatient.”
Meanwhile, the number of claims hospitals submitted for observation care continues to skyrocket.  According to the most recently available data from CMS, total claims increased 91 percent since 2006, to 1.9 million in 2013.  Long observation stays, lasting 48 hours or more, rose by 450 percent to 170,219 during the same period, according to a Kaiser Health News analysis.  In 2013, Medicare officials attempted to control the use of observation care by issuing the so-called “two-midnight rule,” which would require hospitals to admit patients who doctors expect to stay at least two midnights.  But Congress delayed its enforcement after hospitals said the rule was confusing and arbitrary.
For assistance or advocacy in the event of a Medicare claim denied, contact us or call us at 601-987-3000.