Senate Co-Sponsorship Memoranda

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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted:	January 27, 2014 09:48 AM
From:	Senator Bob Mensch
To:	All Senate members
Subject:	Observation Stay

In the near future, I will be introducing consumer friendly legislation to help hospital patients and their families better understand their health insurance options while receiving diagnosis and treatment in the hospital. This will help bring transparency to the hospital/patient relationship.

There is a growing trend in the hospital industry to use what is called “observation status”. “Observation status” applies to patients who receive care and treatment in the hospital after undergoing an evaluation in the Emergency room.

A patient under “observation status” receives care and assistance that is often indistinguishable from that received by others in the hospital, leading to their presumption that they have been ‘admitted’ to the hospital. Hospital stays classified as observation are considered outpatient regardless of the duration of stay or the number of services provided. These individuals would not qualify for their Medicare post-acute care benefit since they were never formally ‘admitted’ to the hospital.

Hospitals use “observation status” in order to avoid admission and re-admission penalties and audit scrutiny by CMS. This can result in negative consequences for the patient and their families in two ways:

First, because Medicare requires an inpatient hospital stay of three or more consecutive days, not counting the day of discharge, in order to meet Medicare criteria for coverage of skilled care in a nursing home. If that requirement is not met, the patient will not be able to access their Medicare benefit for post-acute care in a skilled nursing facility or other setting and would have to pay for this care out of pocket.
Additionally, if the patient was cared for under observation status in a hospital, they may be responsible for considerable payments under Medicare Part B for x-rays, labs, EKGs, etc. If they are formally admitted to the hospital, their stay would be covered by Medicare Part A.

My legislation would benefit Pennsylvania’s Medicare beneficiaries by requiring the hospital to provide oral and written notice to patients of their outpatient status after spending a full day in the hospital. This information will bring transparency to the process and allow an open dialogue between the patient, their families and the hospital in order to best fulfill their medical needs.

Please join me in helping our seniors and their families in co-sponsoring this important legislation.

Contact Matt Azeles in my office at 717-787-3110 if you have any questions.

Introduced as SB1298

Senate Co-Sponsorship Memoranda

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Senate of Pennsylvania Session of 2013 - 2014 Regular Session

MEMORANDUM

Senate of Pennsylvania
Session of 2013 - 2014 Regular Session