[Congressional Record (Bound Edition), Volume 161 (2015), Part 3]
[House]
[Pages 3587-3589]
[From the U.S. Government Publishing Office, www.gpo.gov]




 NOTICE OF OBSERVATION TREATMENT AND IMPLICATION FOR CARE ELIGIBILITY 
                                  ACT

  Mr. RYAN of Wisconsin. Mr. Speaker, I move to suspend the rules and 
pass the 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, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 876

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Notice of Observation 
     Treatment and Implication for Care Eligibility Act'' or the 
     ``NOTICE Act''.

     SEC. 2. MEDICARE REQUIREMENT FOR HOSPITAL NOTIFICATIONS OF 
                   OBSERVATION STATUS.

       Section 1866(a)(1) of the Social Security Act (42 U.S.C. 
     1395cc(a)(1)) is amended--
       (1) in subparagraph (V), by striking at the end ``and'';
       (2) in the first subparagraph (W), by striking at the end 
     the period and inserting a comma;
       (3) in the second subparagraph (W)--
       (A) by redesignating such subparagraph as subparagraph (X); 
     and
       (B) by striking at the end the period and inserting ``, 
     and''; and
       (4) by inserting after such subparagraph (X) the following 
     new subparagraph:
       ``(Y) beginning 12 months after the date of the enactment 
     of this subparagraph, in the case of a hospital or critical 
     access hospital, with respect to each individual who receives 
     observation services as an outpatient at such hospital or 
     critical access hospital for more than 24 hours, to provide 
     to such individual not later than 36 hours after the time 
     such individual begins receiving such services (or, if 
     sooner, upon release)--
       ``(i) such oral explanation of the written notification 
     described in clause (ii), and such documentation of the 
     provision of such explanation, as the Secretary determines to 
     be appropriate;
       ``(ii) a written notification (as specified by the 
     Secretary pursuant to rulemaking and containing such language 
     as the Secretary prescribes consistent with this paragraph) 
     which--
       ``(I) explains the status of the individual as an 
     outpatient receiving observation services and not as an 
     inpatient of the hospital or critical access hospital and the 
     reasons for such status of such individual;
       ``(II) explains the implications of such status on services 
     furnished by the hospital or critical access hospital 
     (including services furnished on an inpatient basis), such as 
     implications for cost-sharing requirements under this title 
     and for subsequent eligibility for coverage under this title 
     for services furnished by a skilled nursing facility;
       ``(III) includes such additional information as the 
     Secretary determines appropriate;
       ``(IV) either--

       ``(aa) is signed by such individual or a person acting on 
     such individual's behalf to acknowledge receipt of such 
     notification; or
       ``(bb) if such individual or person refuses to provide the 
     signature described in item (aa), is signed by the staff 
     member of the hospital or critical access hospital who 
     presented the written notification and includes the name and 
     title of such staff member, a certification that the 
     notification was presented, and the date and time the 
     notification was presented; and

       ``(V) is written and formatted using plain language and is 
     made available in appropriate languages as determined by the 
     Secretary.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Wisconsin (Mr. Ryan) and the gentleman from Texas (Mr. Doggett) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Wisconsin.


                             General Leave

  Mr. RYAN of Wisconsin. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous material on H.R. 876, currently 
under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  Mr. RYAN of Wisconsin. Mr. Speaker, this is commonsense legislation 
dealing with the Medicare program that is bipartisan that the Committee 
on Ways and Means marked up a couple of weeks ago.
  I want to just commend my colleagues Congressman Young from Indiana 
and Congressman Doggett from Texas for their work on this.
  This is common sense. This tells patients what the rules are so that 
they know what is going to happen when they are in the hospital, so 
they know what kind of billing they are going to have.
  I yield whatever time he may consume to the gentleman from Indiana 
(Mr. Young), the coauthor of this legislation, for the purpose of 
describing this legislation.
  Mr. YOUNG of Indiana. Mr. Speaker, I thank the chairman for taking up 
this important piece of legislation today. I also want to thank the 
gentleman from Texas (Mr. Doggett) for his leadership on this issue.
  When seniors require a hospital stay, they are rightfully more 
concerned with their recovery than with understanding how the hospital 
classifies their status as a patient; but when that classification can 
impact future coverage of health care services related to their 
recovery, they deserve to be made aware of the potential ramifications.
  This act, the NOTICE Act, would require hospitals to provide 
meaningful written and oral notification to patients who are in the 
hospital under observation for more than 24 hours. This notice would 
alert the beneficiary or person acting on their behalf of the Medicare 
patient's admission status and the financial implications of that 
classification so he or she can advocate on their own behalf while in 
the hospital.
  No one should be caught off guard by a large medical bill just 
because they weren't aware of the status codes or the billing 
procedures. In a time of sickness and stress, families should focus on 
the recovery of their loved ones instead of dealing with the hidden 
costs due to lack of notice.
  Mr. DOGGETT. Mr. Speaker, I rise in support of the bill and yield 
myself such time as I might consume.
  The NOTICE Act, as the name suggests, is about giving notice. In this 
case, it gives notice to patients when they are about to be billed 
personally, perhaps for many thousands of dollars, because they were 
characterized as under observation rather than regular inpatient status 
without them even knowing.
  I am pleased to have worked on this legislation since last summer 
with Mr. Young when we originally filed the bill, and I am appreciative 
of Chairman Ryan's prompt consideration of it in our committee.
  This is a consumer protection bill designed to provide at least 
limited protection to health care consumers. Currently, a hospital may 
either admit a patient as an inpatient or keep them under observation. 
This categorization might apply to heart murmur, irregular heartbeat, 
indigestion, or other symptoms that would cause a senior or an 
individual with a disability who is covered by Medicare to go into the 
hospital.
  It probably makes little or no difference in the way the hospital 
treats the physical condition, but it can make a very big difference in 
terms of how the patient's pocketbook is cared for. Indeed, the effect 
of being under observation is that the patient gets stuck with the bill 
for any skilled nursing home care that is required for rehabilitative 
services after the stay at the hospital.
  Medicare will pay for that needed care if a Medicare recipient 
patient is hospitalized for more than 3 days as an inpatient, but 
Medicare will not pay for skilled nursing home care if someone is 
simply under observation. Since Medicare has paid nothing, there is 
also no gap to be covered by Medigap; and instead of being in a gap, 
folks like this are really left in just a giant black hole. A Medicare 
patient that is sucked into this hole will be billed for the entire 
cost of rehabilitation at the nursing home, which can run into tens of 
thousands of dollars.
  This practice is happening more and more across America, though it is 
largely unknown to most people until they get caught up in it. In 2012, 
Medicare patients had more than 600,000 observation stays that lasted 3 
days or more. According to one study, over a 6-year span, the number of 
stays under observation has increased by 88 percent. Many Medicare 
patients are being put under observation for a length of

[[Page 3588]]

time that exceeds the guidelines that have been set by Medicare.
  Last year on the NBC Nightly News, Kate Snow profiled Ms. Kelley-
Nelum, who discovered that this costly classification had a big impact 
on her hospitalized husband. After repeated questioning and demanding 
to know why her husband was under observation, she got the hospital to 
reclassify him. She later learned that had that not occurred, had she 
not been persistent in standing up for her ill husband, that they would 
have faced about $22,000 in out-of-pocket rehabilitation bills.
  Last year, with so many patients facing insurmountable out-of-pocket 
costs for skilled nursing care after unknowingly being placed under 
observation, The New York Times actually ran a piece that was designed 
to provide guidance to health care consumers about how to get out of 
this observation category. The first step is knowing you are in it, and 
this bill provides for that meaningful disclosure.
  This legislation is endorsed by AARP, by the Alliance for Retired 
Americans, the Center for Medicare Advocacy, the National Association 
of Professional Geriatric Care Managers, LeadingAge, American Health 
Care Association, and the National Committee to Preserve Social 
Security and Medicare.
  I include in the Record letters from two of those groups in support 
of the legislation.

                                                         AARP,

                                                February 24, 2015.
     Hon. Lloyd Doggett,
     Rayburn Office Building,
     House of Representatives, Washington, DC.
     Hon. Todd Young,
     Longworth Office Building,
     House of Representatives, Washington, DC.
       Dear Representative Doggett and Representative Young: On 
     behalf of the nearly 38 million AARP members and the millions 
     more Americans with Medicare, we are pleased to endorse the 
     Notice of Observation Treatment and Implication for Care 
     Eligibility (NOTICE) Act of 2015 (H.R. 876). Thank you for 
     working together to address the growing problem of Medicare 
     beneficiaries paying high out-of-pocket costs due to hospital 
     stays in which they were classified as an outpatient, rather 
     than being formally admitted as an inpatient.
       As you know, the use of ``observation status'' has become 
     more prevalent in recent years, and the duration of 
     observation stays has grown longer. While there may be 
     several reasons for these trends, it is clear that Medicare 
     beneficiaries are spending more and more time in the hospital 
     without being formally admitted. Admission as an inpatient 
     activates Medicare Part A cost-sharing and a three-day stay 
     requirement for skilled nursing facility (SNF) coverage; in 
     contrast, observation status is billed under Part B, and can 
     expose beneficiaries to unexpectedly high out-of-pocket costs 
     amounting to thousands of dollars.
       Beneficiaries must be informed and made aware of how any 
     changes to their status will affect them. This legislation 
     would require hospitals to provide meaningful written and 
     oral notification to patients who are in the hospital ``under 
     observation'' for more than 24 hours. While this does not 
     solve all the problems regarding cost-sharing and access to 
     SNF coverage, it is an important step to ensuring Medicare 
     beneficiaries have access to information about their care. 
     Clearly understanding their admission status will help 
     patients, and their caregivers, better plan treatment options 
     with their health care providers.
       Again, thank you for your continued work to protect 
     Medicare beneficiaries. If you have any questions, please 
     contact me, or have your staff contact Ariel Gonzalez, 
     Director of Federal Health and Family.
           Sincerely,

                                              Joyce A. Rogers,

                                            Senior Vice President,
     Government Affairs.
                                  ____



                             American Health Care Association,

                                Washington, DC, February 11, 2015.
     Hon. Lloyd Doggett,
     Rayburn House Office Building,
     Washington, DC.
       Congressman Doggett: I serve as the president and chief 
     executive officer of AHCA/NCAL, the nation's largest 
     association of long term and post-acute care providers. The 
     association advocates for quality care and services for the 
     frail, elderly, and individuals with disabilities. Our 
     members provide essential care to millions of individuals in 
     more than 12,000 not for profit and for profit member 
     facilities.
       AHCA/NCAL, its affiliates, and member providers advocate 
     for the continuing vitality of the long term care provider 
     community. We are committed to developing and advocating for 
     public policies that support quality care and quality of life 
     for our nation's most vulnerable. Therefore, we are in 
     support of the legislation, Notice of Observation Treatment 
     and Implication for Care Eligibility (NOTICE) Act, that you 
     and Congressman Todd Young (R-IN-9) have introduced again 
     this Congress.
       The NOTICE Act requires hospitals to give formal notice to 
     patients within a period of time after classifying them as an 
     inpatient or as an outpatient under observation. More 
     specifically, the legislation works to ensure that hospitals 
     notify patients entitled to Medicare part A coverage of their 
     outpatient status within 36 hours after the time of their 
     classification or, if sooner, upon discharge.
       Often times, patients have no idea what their status is in 
     a hospital or the importance of it. This can lead to 
     thousands of dollars in out-of-pocket medical expenses should 
     they need skilled nursing center care following their 
     hospital stay. The observation stays issue is a financial 
     burden on seniors and their families. It can cause 
     unnecessary spend-down, accelerating the time frame in which 
     seniors will have to turn to programs such as Medicaid to pay 
     for their care.
       This legislation is a positive step forward, and raises 
     attention to a complex and critical issue hurting the 
     nation's seniors. AHCA/NCAL applauds Congressmen Doggett and 
     Young for serving as champions for seniors and those 
     individuals who need our services the most.
           Sincerely,
                                                   Mark Parkinson,
                                        AHCA/NCAL President & CEO.

  Mr. DOGGETT. Mr. Speaker, I also appreciate the help we have received 
from the Center for Medicare Advocacy. They have had reports, again, 
from people all over the country being placed in this situation.
  The hospitals may act in the best interests of a patient's health but 
not always in the best interest of the patient's pocketbook. The NOTICE 
Act will equip patients and their loved ones with the knowledge that 
they need to be effective advocates and avoid crippling financial 
repercussions.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RYAN of Wisconsin. Mr. Speaker, may I inquire of the gentleman 
from Texas if they have any other speakers? We are prepared to close.
  Mr. DOGGETT. I have one speaker on the way. If you are prepared to 
close and he is not arriving, then we will close.
  Do you have any other speakers?
  Mr. RYAN of Wisconsin. I will just say a few things. I yield myself 
such time as I may consume, Mr. Speaker.
  This is basically common sense. What is happening is people on 
Medicare are going to the hospital. They don't know what their status 
is, whether they are considered inpatient or outpatient. As far as they 
are concerned, it is the same thing. The problem is they are being 
declared one or the other, unbeknownst to them, and that has a huge 
difference in the billing that they receive.
  So what this bill simply says is you will know your status so that 
you can make an informed decision as a patient in a hospital, because 
there are huge financial implications to that status. This is very 
simple. It is good government.
  I reserve the balance of my time.
  Mr. DOGGETT. Mr. Speaker, I yield myself 15 seconds and will welcome 
my colleague, Joe Courtney, who has long sought to respond 
legislatively to protect health care consumers from the financial pain 
of this observation status.
  While the passage of the NOTICE Act is an important step, 
Representative Courtney has an Improving Access to Medicare Coverage 
Act that would treat observation stays the same as inpatient stays. I 
support his legislation as he has supported, from the beginning, this 
initiative, and I appreciate his leadership.
  Mr. Speaker, I yield 3 minutes to the gentleman from Connecticut (Mr. 
Courtney).
  Mr. COURTNEY. Mr. Speaker, I want to, first of all, salute 
Congressman Doggett for his effort in terms of bringing this 
legislation forward. As the chairman of the committee said, this is 
really about giving patients a fighting chance to challenge this 
coding, a change that happens while people are in the hospital and have 
absolutely no idea that they are not being treated as full part A 
inpatient patients at hospital facilities.
  The impact of being coded as observation versus inpatient may sound 
extremely arcane, but what that means is that at time of discharge, if 
a patient

[[Page 3589]]

is medically prescribed to go to a nursing home for rehab care for a 
broken bone or for home health services for a heart condition, they are 
not covered by Medicare if they are in the observation bucket as 
opposed to the inpatient bucket.
  The inspector general's office for Medicare issued a report in 2012 
that 600,000 patients across the country with long-stay hospital visits 
over 3 days fell into this black hole, this no man's land where, again, 
their doctors are telling them that they need to have rehab services so 
that people can walk again and deal with activities of daily living; 
but the price for doing that, because you are in observation status, 
can be tens of thousands of dollars, which is where long-term care 
facilities, nursing home coverage for private-pay patients, out-of-
pocket patients, exist today.
  This bill at least gives patients the opportunity to challenge that 
decision. But the fact of the matter is, what we need to do is to 
restore the 3-day rule, which is in statute. It has been there since 
1965. Observation status is something new within the last 10 years, and 
what we need to do as a Congress is to restore that 3-day rule, which 
says to a patient: If you are coded observation or if you are coded 
inpatient, it should not interfere with your medically prescribed 
course of treatment at the time that you are discharged from the 
hospital.
  That, unfortunately, is not going to be fixed as a result of this 
legislation. We should build on this legislation and again restore 
Medicare's promise, which, again, from day one, has said that medically 
prescribed care will be covered by the system at time of discharge from 
a hospital for longer than 3 days.
  The horror stories of people who in some instances were in hospital 
for 9 days with broken bones, broken hips, who, again, are staring at a 
10 to $15,000 fee to be admitted to a nursing home--again, 600,000 
cases in 2012.
  So again, we need to build on this legislation, but fundamentally, we 
need to restore the 3-day rule which has been in statute since 1965. We 
will be introducing that legislation later this week. It will be a 
bipartisan bill. We think we can withstand the test of any pay-fors to 
make sure that it allows the Medicare system's finances to stay in a 
stable condition. In the meantime, we should pass this legislation 
today.
  Again, I want to salute the Member from Texas for his leadership on 
this issue.

                              {time}  1645

  Mr. DOGGETT. Mr. Speaker, I concur with the gentleman from 
Connecticut.
  I yield back the balance of my time.
  Mr. RYAN of Wisconsin. I agree, Mr. Speaker.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Wisconsin (Mr. Ryan) that the House suspend the rules 
and pass the bill, H.R. 876, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. RYAN of Wisconsin. Mr. Speaker, on that I demand the yeas and 
nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

                          ____________________