Observation Status Issue Makes Evening News

Observation Status Issue Makes Evening News

The problem of beneficiaries being held in “under observation” while receiving hospital care is growing. It often leaves affected beneficiaries with unexpected, large and sometimes financially devastating bills. This is because when someone is in classified as “under observation,” the hospital bills Medicare for outpatient services instead of inpatient care, even though the care received is the same. Yet, the biggest difference with this labeling technicality is that Medicare will only cover skilled nursing care after at least 3 days of inpatient hospital care. Patients who receive 3 days of hospital care under the “observation status” label do NOT meet this criteria. This seemingly small technicality can have dire financial consequences on beneficiaries.

This scenario happened to Ms. Bricout, and is highlighted in the NBC Nightly News segment on observation status (see below). She was unknowingly classified under observation status for her 3 days of inpatient care before being transferred to a skilled nursing facility for rehab services. It wasn’t until after her 9 weeks of care that she found out of this technical label when she received a bill of $28,350 for her care.

Ms. Bricout’s case is one of over 600,000 such cases in just the last year, and the number of cases is rising. Since 2006, the number of beneficiaries being placed observation status has risen 63%.

Advocates nationwide are asking for a fix to this situation. And currently, there is a potential solution through Congressman Joe Courtney’s pending bill pending in Congress that would fix the observation status problem for good. It is the Improving Access to Medicare Coverage Act of 2013 (H.R. 1179 and S. 569).

The Center for Medicare Advocacy has put together a campaign for people to take action. Click here to tell your legislators to support this bill. You can also watch the short NBC Nightly News clip on observation status. Act today; Medicare beneficiaries can’t keep waiting for this necessary financial relief.

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.