[Congressional Record Volume 161, Number 119 (Monday, July 27, 2015)]
[Senate]
[Pages S5920-S5921]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               NOTICE ACT

  Mr. McCONNELL. Mr. President, I ask unanimous consent that the 
Committee on Finance be discharged from further consideration of H.R. 
876 and the Senate proceed to its immediate consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report the bill by title.
  The senior assistant legislative clerk read as follows:

       A bill (H.R. 876) to amend Title XVIII of the Social 
     Security Act to require hospitals to provide certain 
     notifications to individuals classified by such hospitals 
     under observation status rather than admitted as inpatients 
     of such hospitals.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. CARDIN. Mr. President, I applaud the Senate passage of H.R. 876, 
the Notice of Observation Treatment and Implication for Care 
Eligibility, NOTICE, Act. Representative Lloyd Doggett of Texas 
introduced H.R. 876. Senator Enzi and I introduced an identical 
companion bill in the Senate, S. 1349, which the Finance Committee 
reported unanimously by voice vote on June 24, 2015. This important 
legislation requires hospitals to give notice to Medicare beneficiaries 
who are classified as ``outpatient observation'' status

[[Page S5921]]

for more than 24 hours rather than being admitted to the hospital as 
inpatients. Being classified as ``outpatient observation'' status may 
result in higher out-of-pocket costs for Medicare beneficiaries and 
makes those beneficiaries ineligible for Medicare coverage of post-
acute care in a skilled nursing facility after they are discharged from 
the hospital.
  The use of ``outpatient observation'' status has become more 
prevalent in recent years, and the duration of these ``outpatient 
observation'' stays has grown longer--meaning that an increasing number 
of Medicare beneficiaries are spending more and more time in the 
hospital without being admitted as inpatients. According to the 
Department of Health & Human Services's, HHS, inspector general, in 
2012, Medicare beneficiaries had more than 600,000 ``outpatient 
observation'' stays that lasted 3 nights or more.
  These ``outpatient observation'' stays can have serious financial 
consequences for seniors. Medicare beneficiaries classified as 
``outpatient observation'' status are responsible for outpatient co-
payments and prescription drug costs that they would not have had as an 
inpatient--and there is no out-of-pocket cap on these costs. Perhaps 
most importantly, Medicare will only cover post-acute care in a skilled 
nursing facility, SNF, if the beneficiary had 3 consecutive days of 
hospitalization as an inpatient--even though ``outpatient observation'' 
patients may spend multiple nights in the hospital and receive the same 
type and level of care as inpatients. This means Medicare beneficiaries 
classified as ``outpatient observation'' status who require skilled 
nursing care after discharge from the hospital must pay the entire cost 
themselves--an average out-of-pocket cost of more than $10,000 per 
beneficiary.
  Understandably, Medicare beneficiaries spending several nights in the 
hospital often simply assume that they have been admitted as 
inpatients. Many seniors are unaware that they have actually been 
classified as ``outpatient observation'' status and what that means in 
terms of the financial consequences for them and their families. In 
some cases, these seniors only become aware of their ``outpatient 
observation'' status after they receive a bill from the nursing home 
for tens of thousands of dollars.
  Under the NOTICE Act, within 36 hours or, if sooner, upon discharge, 
hospitals are required to provide written notice to the Medicare 
beneficiary explaining, No. 1, that he or she has been classified as an 
outpatient under observation status, instead of being admitted as an 
inpatient; No. 2, the reason for that classification; and, No. 3, the 
implications on cost-sharing and eligibility for Medicare coverage of 
post-acute care in a skilled nursing facility.
  The NOTICE Act is a no-cost, commonsense approach that will help 
ensure our seniors are fully informed about their hospital status and 
the financial implications. I thank my colleagues for joining with me 
and Senator Enzi to support this important legislation.
  Mr. McCONNELL. Mr. President, I further ask unanimous consent that 
the bill be read a third time and passed and the motion to reconsider 
be considered made and laid upon the table with no intervening action 
or debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (H.R. 876) was ordered to a third reading, was read the 
third time, and passed.

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