Congressman Joe Courtney (D-CT) leads a bipartisan group of Members of Congress to introduce legislation to count time spent by a patient in a hospital under outpatient “observation status” towards satisfying the three-day inpatient hospital stay prerequisite for Medicare Part A coverage of a skilled nursing facility (SNF) stay. The Improving Access to Medicare Coverage Act of 2021, H.R. 3650, seeks to end the federal policy that excludes time spent in observation status from the three-day calculation. The policy makes little sense when care received in observation status may be indistinguishable from the care received by inpatients. How hospitals bill the Medicare program for the services they provide to patients should not affect patients’ entitlement to Medicare coverage of their post-hospital care. A companion bipartisan bill will be introduced soon in the Senate.
During the coronavirus pandemic, the federal government has waived the three-day inpatient requirement for post-hospital care in a skilled nursing facility. That waiver is expected to expire with the end of the public health emergency.
An ad hoc coalition of more than 30 national groups, representing nurses, emergency room physicians, hospitalists, nursing homes, advocates for residents, and the American Medical Association, support the legislation.
The need for the legislation continues. A recent article in the Daily News-Record reports that Phoebe Orebaugh, a former longtime member of the Virginia House of Delegates and a retired educator, was hospitalized for six days in observation status, making her ineligible for Medicare Part A coverage of her subsequent SNF stay. Observation status is an increasing problem for Medicare beneficiaries as the Centers for Medicare & Medicaid Services removes additional surgical procedures and services from its “inpatient only” list and authorizes these services to be classified as “outpatient”.
To read the Center’s extensive materials on observation status, please go to https://medicareadvocacy.org/medicare-info/observation-status/
June 10, 2021 – T. Edelman
 Ian Munro, “Medicare Changes Impacting Valley Residents,” Daily News-Record (Jun. 8, 2021), https://www.dnronline.com/news/local/medicare-changes-impacting-valley-residents/article_bac35137-f849-5a3f-accd-97d32da0ae12.html
 Susan Jaffe, “New cost-cutting Medicare rule may add costs to patients,” The Washington Post (Mar. 21, 2021), https://www.washingtonpost.com/health/new-cost-cutting-medicare-rule-may-add-costs-to-patients/2021/03/19/1197a3de-8747-11eb-8a8b-5cf82c3dffe4_story.html