In recent years,
many seniors in the United States have seen an increase in hospital and nursing
home bills not covered by their insurance, primarily Medicare. The lack of coverage stems from their
classification as being under “observation care” while in a hospital. Any patient that arrives at a hospital due to
an unknown illness or injury is placed under observation care. Medicare classifies observation care as an outpatient service,
resulting in higher
costs to the patient. Both the Federal
Government and State of California have brought forth initiatives to help bring
awareness to patients regarding observation care and the financial
repercussions.
In July 2015,
Congress passed the Notice of Observation Treatment and Implication for Care
Eligibility Act (NOTICE Act), which required all hospitals to notify Medicare
patients of their observation care status within 24 hours. In addition to notification, the hospital is
required to explain why the patient had not been admitted along with explaining
the financial implications of their status. First, Medicare views observation care as an
outpatient service limiting the coverage of any and all services provided by
the hospital. Importantly, follow-up
nursing care cannot be covered by Medicare unless a patient has spent three
consecutive days in the hospital as an admitted patient. Due to complaints raised by patients and their
families regarding the above issues, the Centers for Medicare & Medicaid
Services urged Congress to pass the legislation.
California
recently introduced legislation that would take the Federal requirement one
step further requiring hospitals to notify all patients, not just those who are
Medicare eligible, of their status as soon as possible. The State has undertaken the initiative in
response to the growing number of reported observation care statuses in
California hospitals. Since 2005,
California has seen a doubling in the number of patients in observation
care, while the increase in admitted patients did not occur at the same
rate. In addition to notifying all
patients that appear in observation care, the California legislation would
create nurse-to-patient ratio requirements for all areas of hospitals
including observation care. California’s
legislation would reinforce and broaden the Federal NOTICE Act, while also providing more attention to
patients in observation care with the mandated ratios. The legislation was passed with broad support
from the California legislature, and it is expected to be signed by Governor
Brown.
Both the Federal Government and the State of
California recognized the growing financial problem of medical expenses,
especially in cases of seniors with Medicare.
The NOTICE Act accomplishes the primary goal of alerting Medicare
recipients of their status and potential financial consequences. The California legislation takes the
notification a step further by alerting all observation care patients, and
mandates nurse-to-patient ratios. These
two factors in conjunction create a much more patient-centric approach to
medicine. While the state hospital
association has not outwardly endorsed the legislation in California, some
members have voiced their approval as a general step in the correct direction.
Alex Martell
is a first year student at DePaul University College of Law. He received a
B.A. from Tufts University, where he majored in political science. Alex has an
interest in regulatory and policy issues and will complete his law degree and
certificate in health law in 2019.