Sen. Chuck Schumer (D-NY)

A new U.S. Senate bill would change a Medicare provision preventing many seniors from getting coverage for skilled nursing therapy after hospital “observation stays.”

Sen. Charles Schumer (D-NY) announced the Improving Access to Medicare Coverage Act of 2013 at an event in Albany, NY, on Wednesday. Schumer will co-sponsor the bill with Sen. Sherrod Brown (D-OH).

Under existing law, Medicare only covers skilled nursing home rehabilitation services for seniors who first spend three days in the hospital as an inpatient. Hundreds of thousands of seniors are being denied Medicare coverage for therapy each year because they are admitted to the hospital under “observation status,” which does not count toward the three-day inpatient minimum, Schumer said. Correcting the “observation stay loophole” has been a major item on list of SNF advocates.

Schumer said his bill would save seniors substantial sums of money, and will lessen the burden on providers by reducing the time they spend determining how a hospital stay should be coded.

Lawmakers in both houses of Congress introduced a similar measure in 2011, which did not pass.