Medicare Observation Days: Support Needed to Fix the Problem

Members | August 09, 2012

Increasing numbers of Medicare beneficiaries transitioning from hospital to skilled nursing care are finding that Medicare will not cover their skilled nursing stay because their hospitalization was classified as an "observation" rather than an in-patient stay. Legislation to correct this situation has been introduced in both the U.S. House of Representatives (H.R. 1179) and the U.S. Senate (S. 569). The bills would specify that any hospital stay under observation would count toward the 3-day hospitalization requirement for Medicare coverage of post-acute care. Please  and urge your legislators to cosponsor this important legislation. 

On March 14, Sen. Sherrod Brown (D-OH) introduced Improving Access to Medicare Coverage Act (S. 569), a bill that would specify that hospital stays under observation would count toward the 3-day hospitalization requirement for Medicare coverage of post-acute care. Patients that receive hospital care on "observation status" do not qualify for this benefit, even if their hospital stay lasts longer than 3 days. 

The observation days problem affects residents and clients of all LeadingAge members, including residents of senior housing or home-based services clients who are hospitalized and released to nursing homes. They are all at risk of substantial out-of-pocket costs for post-acute care without this corrective legislation.

Please help us persuade Congress to solve this problem that affects so many Medicare beneficiaries and skilled nursing facilities. Contact your legislators and urge them to cosponsor the corrective legislation.

The legislation would:

  • Amend Medicare law to count a beneficiary’s time spent in the hospital on “observation status” towards the 3-day hospital stay requirement for skilled nursing care.
  • Establish a 90-day appeal period following passage for those that have a qualifying hospital stay and have been denied skilled nursing care after January 1, 2013. 

“When seniors are transferred from a hospital to a nursing home for further care they should be able to focus on their recovery instead of technicalities that could lead to sky high medical bills,” Sen. Brown said in a press relase. “This bill would help ensure that seniors receive the care they need without incurring unexpected and unfair costs.”

The bipartisan bill, which was introduced in the U.S. House of Representatives as H.R. 1179 by Rep. Joe Courtney (D-CT) and Rep. Tom Latham (R-IA), is endorsed by the following groups:

  • AARP
  • American Medical Association (AMA).
  • American Health Care Association (AHCA).
  • The Center for Medicare Advocacy.
  • American Case Managers Association.
  • American Medical Directors Association (AMDA).
  • American Nurses Association (ANA).
  • LeadingAge.
  • National Association of Professional Geriatric Care Managers.
  • National Committee to Preserve Social Security and Medicare.
  • Society of Hospital Medicine.