Bill would credit observation stays toward 'three-night rule'

A bill introduced in Congress on Monday would count all time that Medicare beneficiaries spend under hospital “observation” status toward the three-day inpatient requirement necessary to receive Medicare coverage for nursing home care.

In introducing the “Improving Access to Medicare Coverage Act of 2015,” U.S. Rep. Joe Courtney (D-CT) said he hopes the bill will quell the long-standing practice of denying Medicare coverage to discharged patients even after the “increasingly common Observation Status classification is used” and a three-day observation period lapses.

“The gap in coverage for prescribed nursing care leaves hundreds of thousands of Medicare beneficiaries and their families facing catastrophic medical bills each year,” Courtney said. “This simple fix would help patients receive coverage for prescribed care after leaving the hospital, helping them to achieve a successful recovery, without ending up back in the hospital with avoidable complications.”

Courtney acknowledged that funding would be a major obstacle of the bill. Criticism could be deflected if proponents are able to show the Medicare savings that could be achieved through things like better outreach about the high readmission rates caused by Medicare policies governing coverage for skilled nursing facilities.

It's unclear whether the hospital industry will get behind Courtney's third legislative attempt after opposing previous efforts, the most recent being the ill-fated Improving Access to Medicare Coverage Act of 2013, according to Bloomberg News reports.

The American Health Care Association lent support to a related bill that unanimously passed a House vote March 17. So it was no surprise to hear its clear endorsement of Courtney's bill Monday.

“This bipartisan measure will help fix a confusing policy that continues to leave our nation's seniors hanging in uncertainty regarding their access to the Medicare coverage they deserve,” said Mark Parkinson, AHCA/NCAL's president and CEO.