Observation stay bill hits CA governor's desk

A bill to inform California Medicare beneficiaries of their hospital observation stay status is awaiting Gov. Jerry Brown (D)'s signature.

The bill, which lawmakers approved last week and mirrors the federal NOTICE Act, would require hospitals to tell patients if they are under an observation stay, beginning Jan. 1. The observation notices also would warn patients that their status could impact what their insurance will cover, such as a nursing home stay.

State Sen. Ed Hernandez (D) said the bill will benefit average patients who may not know enough to know the difference between observation and inpatient care.

The bill is expected to be signed by the governor, and could end up being combined with the NOTICE Act's observation stay notices when hospitals begin using them next year, according to Kaiser Health News.

The legislation also would require specific nurse-to-patient staffing ratios — the first in the country — for hospitals that have separate units for observation stay patients.

While the bill and its minimum staffing provision earned praise from state healthcare associations, some consumer advocates worry the observation notices don't do enough to ensure beneficiaries won't get hit with any surprise bills for hospital or nursing home stays.

“It is a baby step that at least tells them there is a problem,” Bonnie Burns, a training and policy specialist at California Health Advocates, told KHN. “The issue for many beneficiaries is that the time spent in observation doesn't let them access the Medicare nursing home benefit. The better fix would be to allow people to use their Medicare benefit if they have been under observation.”