House lawmakers call on CMS to delay rule limiting observation stays

Share this content:

More than 100 members of the House of Representatives have called on the Centers for Medicare & Medicaid Services to delay implementation of a new rule intended to limit the number of hospital patients under “observation” status.

Hospitals are increasingly keeping patients for extended observation stays, which do not count toward Medicare's three-day inpatient requirement to cover subsequent skilled nursing care. Long-term care advocates and providers, seniors, public policy leaders and lawmakers have all called for a solution to the observation stay problem, which saddles Medicare beneficiaries with significant costs for post-acute care, and in some cases deprives them of needed services.

CMS recently finalized a rule guiding hospitals to grant inpatient status once a patient's stay has spanned two midnights. The rule has received a mixed response. Although some have praised CMS for taking action, the rule would not completely fix the observation stay problem due to certain loopholes. And prominent groups such as the American Hospital Association have said implementation needs to be delayed so that providers can learn about the rule and CMS can iron out certain questions and issues, such as how electronic health records need to be updated.

In a Sept. 24 letter, more than 100 House members joined the chorus calling for delay. In particular, the lawmakers registered concerns that the rule could increase costs for beneficiaries who don't meet the two-midnight threshold. If their hospital stay is covered by Part B rather than Part A benefits, they would face potentially higher copayments. The bipartisan group of House members said CMS should reexamine the rule and delay implementation for six months. The rule is currently set to take effect Oct. 1.

Click here to access the letter.