Healthcare providers are expressing support for legislation overwhelmingly approved by Congress that would require hospitals to notify Medicare patients when they are under observation care in a hospital but have not been admitted. Some observers, however, say the measure doesn't address the underlying regulatory problems.
The bill is a partial response to the sticker shock beneficiaries face when they go to a skilled-nursing or rehabilitation facility following a hospital discharge and discover that Medicare won't cover the tab.
That's because to qualify for SNF coverage Medicare beneficiaries must first spend three consecutive midnights as an admitted patient in a hospital, and observation days don't count. Beneficiaries also find themselves facing unexpected Medicare Part B co-pays for drugs received during observation care at a hospital, since they were never admitted and the drugs are therefore not covered under Part A.
The Notice of Observation Treatment and Implication for Care Eligibility Act, or Notice Act, would require hospitals to inform beneficiaries receiving observation services for more than 24 hours about their outpatient status.
The written notification also would have to explain that Part B cost-sharing requirements apply to those beneficiaries. The notice would further have to state that the observation stay would not count toward the three-day inpatient stay required for Medicare coverage of subsequent SNF services.
There is some uncertainty about whether President Barack Obama will sign the bill in time for it to become law. He has to affirmatively sign it, rather than let it become law without his signature, because Congress will be in recess.