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 Advocates Encouraged By Political Momentum Behind Observation Stay Reforms

Post-acute care advocates are increasingly “optimistic” that Medicare’s troubling observation stay loophole will be closed—perhaps as early as next year, a top lobbyist tells Provider.

“The amount of attention and momentum this issue is receiving is amazing,” says Clif Porter, who heads up the government affairs department at the American Health Care Association/National Center for Assisted Living. “All of the attention is organic and coming in large part from real people and the advocacy groups that represent them.”

It has been a long road for advocates to draw attention to the observation stay problem. Under Medicare rules, hospitals can put patients under “observation” and thus duck the special requirements of admitting the patients formally. The problem is, it also denies elderly patients access to Medicare-supported rehabilitation after they’re released from the hospital.

Countless elderly patients have been confronting sticker shock when they learn that the rehab services they need aren’t going to be covered by Medicare. Dozens of congressmen and –women have already signed on to co-sponsor a bill drafted by U.S. Reps. Joe Courtney (D-Conn.) and Tom Latham (R-Iowa), as well as Ohio Democratic Sen. Sherrod Brown, that would count observation nights toward a patient’s Medicare rehabilitation benefits.

Other bills have also been introduced, hoping to tackle what many see as a mounting crisis. Rep. Lloyd Doggett, a Texas Democrat, is drafting legislation that would require hospitals to give formal notice to patients before classifying them as admitted or on observation status.

All of it has care advocates hoping that help, at long last, is on the way.

“I am optimistic that an effective resolution to this issue will be found,” Porter says. “However, with only about 28 days left on the congressional calendar after summer recess, real action on the issue may not occur until 2015.”

Meanwhile, activity can be seen on other fronts. The Centers for Medicare & Medicaid Services is already running test projects on whether it will work to waive the observation loophole altogether. Last month, Connecticut Gov. Dannel P. Malloy signed a bill that requires hospitals to notify patients in writing and verbally when they’re being placed into observation status. Maryland and New York have already enacted similar bills.

“However, even with state-mandated notice, observation status will continue to be a vexing problem,” the Center for Medicare Advocacy says. “A simple change is needed.”

Bill Myers is Provider’s senior editor. Email him at wmyers@providermagazine.com. Follow him on Twitter, @ProviderMyers.
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