Observation Status Reform

     As an elder law attorney and advocate, I often come in contact with elderly clients who are hospitalized and then need skilled nursing facility (SNF) care, which, under current law, must be preceded by a three-day inpatient hospitalization for Medicare to cover the cost of care. All hospital stays are not equal in this regard and sometimes even patients that stay in the hospital overnight may be considered "outpatient".  Observation status and services are a type of outpatient care that may be provided in any part of the hospital.  Thus the designated hospital status affects how much the client will pay for hospital services and whether Medicare will cover care in a skilled nursing facility. 
     There are increasing accounts across the country of individuals who spend their entire stay in a hospital classified under observation (outpatient) status. As a result, Medicare will not pay for some of their hospital costs nor their SNF care. Medicare beneficiaries are then faced with unexpected and expensive hospital services and nursing home care. 
     The Improving Access to Medicare Coverage Act of 2013 would alleviate this situation by allowing time spent in the hospital under observation status to count toward the requisite three-day hospital stay for coverage of skilled nursing care. This will allow older Americans to receive important health care and prevent the very real and difficult decision of choosing to pay significant out-of-pocket costs or forgo care in a skilled nursing facility.   
     You can check the Centers for Medicare and Medicaid Services website or your plan manual for additional information related to plan coverage criteria.
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