[Congressional Record Volume 157, Number 55 (Thursday, April 14, 2011)]
[Senate]
[Page S2510]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY (for himself and Ms. Snowe):
  S. 818. A bill to amend title XVIII of the Social Security Act to 
count a period of receipt of outpatient observation services in a 
hospital toward satisfying the 3-day inpatient hospital requirement for 
coverage of skilled nursing facility services under Medicare; to the 
Committee on Finance.
  Mr. KERRY. Mr. President, today too many Medicare beneficiaries are 
being saddled with thousands of dollars of unnecessary out-of-pocket 
costs for stays at skilled nursing facilities, SNF, solely because of 
the technical classification of their hospital stay.
  Hospitals are increasingly serving Medicare beneficiaries using an 
``outpatient observation status'' rather than admitting them as an 
inpatient--a billing technicality. Because of this, patients are 
enduring longer hospital stays in observation status and may 
unknowingly be treated under outpatient observation status for the 
entirety of their hospital visit.
  While the classification of a hospital stay does not affect either 
the type or level of care a beneficiary receives, it has significant 
repercussions on Medicare coverage of SNF care. Under current law, 
Medicare covers SNF care only if beneficiaries have 3 consecutive days 
of hospitalization as an inpatient, not counting the day of discharge.
  Although the Medicare Program manuals limit observation status to 24 
to 48 hours, many beneficiaries nationwide are experiencing extended 
stays in acute care hospitals under observation status. According to 
the Medicare Payment Advisory Committee, MedPAC, the number of 
beneficiaries receiving outpatient observation services for longer than 
48 hours rapidly increased, by more than 70 percent, from 2006 to 2008.
  The growth in observation care has not only generated considerable 
beneficiary confusion as to why Medicare does not cover their SNF care 
after a hospitalization, but also it has also become a substantial 
financial barrier to medically necessary post-acute care. Beneficiaries 
are left facing thousands of dollars in unreimbursed out-of-pocket 
charges for their care. Those who cannot afford to pay privately for 
their stay in a SNF may decide to forgo care altogether.
  I have heard countless stories of hardship from Medicare 
beneficiaries in Massachusetts because of this unfair policy. I would 
like to share the inexcusable experience of one of my constituents, 
Rosemary Crossin. Rosemary is 81 years old and suffers from Parkinson's 
disease, arthritis, and diabetes. She was treated at a Boston hospital 
following a fall that left her with a broken shoulder and a broken 
hand.
  Upon arrival at the hospital, she was examined in the ER for over 6 
hours, where she waited on a hard stretcher and received a CT scan, an 
x ray, and two doses of morphine. At the end of her examination, 
Rosemary, disoriented and unable to walk on her own due to the 
combination of her chronic conditions, morphine, and broken bones, was 
treated in the hospital under observation status.
  At no time did the hospital inform Rosemary's family what observation 
status meant. Rosemary remained in the hospital for over 4 days while 
she recovered, after which time a physician determined that Rosemary be 
transferred to an extended stay facility to complete her 
rehabilitation.
  Despite spending over 4 days in the hospital, after the hospital 
itself determined she was not fit to return home, Rosemary was never 
admitted as an inpatient. Because she was never classified as an 
inpatient for billing purposes, she was told that her costs would not 
be covered by Medicare. Rosemary was told that she would have to prepay 
$7998 to the skilled nursing facility or remain at the hospital at a 
cost of $1200 per day. This is wrong, and it needs to be changed.
  Currently, Rosemary continues to rehabilitate her injuries at the 
skilled nursing facility. Unfortunately, because she was in observation 
status for her entire hospital stay, all subsequent costs will need to 
be paid for out-of-pocket.
  Rosemary could have to spend up to $18,000 out-of-pocket following 
her fall, all because the hospital kept her under observation status 
for more than 96 hours after it determined she was not fit to go home.
  Unfortunately, Rosemary's experience is not unique. That is why 
Senator Snowe and I are working together to prevent billing 
technicalities from hampering access to skilled nursing care. Today, we 
are introducing the Improving Access to Medicare Coverage Act of 2011, 
which would eliminate financial barriers to skilled nursing care in 
Medicare by allowing observation stays to be counted toward the 3-day 
mandatory inpatient stay for Medicare coverage of SNF services.
  This legislation is supported by a number of national organizations 
from both the provider and beneficiary communities. I would like to 
thank a number of organizations that have been integral to the 
development of the Improving Access to Medicare Coverage Act of 2011 
and that have endorsed our legislation today, including the AARP, the 
American Health Care Association, the American Medical Association, the 
American Medical Directors Association, the Center for Medicare 
Advocacy, LeadingAge, and the National Committee to Preserve Social 
Security and Medicare.
  The Improving Access to Medicare Coverage Act will ensure that 
vulnerable patients like Rosemary will no longer have to suffer or 
worry about affording medically needed care because of a hospital 
billing classification issue.
  I urge my colleagues to support our legislation to eliminate 
unnecessary barriers to skilled nursing care and to bring peace of mind 
to patients and their families.
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