Panel exploring surprise medical bills should tackle observation status: AHCA

One of the biggest surprises for many would-be nursing home residents is being hospitalized under “observation” status. It doesn’t trigger the three-day span required for subsequent Medicare-covered skilled nursing stays.

The American Health Care Association/National Center for Assisted Living is urging the House Ways and Means health subcommittee to address the issue during its efforts to tackle surprise medical bills.

“Counting observation status toward the three-day inpatient requirement in the Medicare program is a common-sense policy that does not affect hospital care, but does protect the ability of beneficiaries to receive needed post-acute nursing home care,” AHCA and other provider organizations wrote in a letter submitted to the congressional panel on May 21.

The coalition noted that Congress already has before it bipartisan, bicameral legislation to update a loophole in Medicare policy that would help protect seniors from observation-stay scenarios. It would allow observation status stays to count toward the required three-day hospital stay needed to trigger skilled care coverage.

“Our nation’s most vulnerable seniors could be surprised with high out-of-pocket costs due to being admitted to the hospital under observation status,” the AHCA-led group write. “Often, these individuals didn’t even know they were on observation status or know to ask.

Even those who do understand observation status rules do not have the right to appeal their category of care and ask for in-patient status.

Congress is considering multiple proposals aimed at limiting surprise medical costs — including for emergency care and out-of-network charges — and President Trump has signaled his support.

Panel exploring surprise medical bills should tackle observation status, AHCA says