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Public Statements

Statements on Introduced Bills and Joint Resolutions

Floor Speech

Location: Washington, DC

By Mr. KERRY (for himself and Ms. Snowe):

S. 818. A bill to amend title XVIII of the Social Security Act to count a period of receipt of outpatient observation services in a hospital toward satisfying the 3-day inpatient hospital requirement for coverage of skilled nursing facility services under Medicare; to the Committee on Finance.

Mr. KERRY. Mr. President, today too many Medicare beneficiaries are being saddled with thousands of dollars of unnecessary out-of-pocket costs for stays at skilled nursing facilities, SNF, solely because of the technical classification of their hospital stay.

Hospitals are increasingly serving Medicare beneficiaries using an ``outpatient observation status'' rather than admitting them as an inpatient--a billing technicality. Because of this, patients are enduring longer hospital stays in observation status and may unknowingly be treated under outpatient observation status for the entirety of their hospital visit.

While the classification of a hospital stay does not affect either the type or level of care a beneficiary receives, it has significant repercussions on Medicare coverage of SNF care. Under current law, Medicare covers SNF care only if beneficiaries have 3 consecutive days of hospitalization as an inpatient, not counting the day of discharge.

Although the Medicare Program manuals limit observation status to 24 to 48 hours, many beneficiaries nationwide are experiencing extended stays in acute care hospitals under observation status. According to the Medicare Payment Advisory Committee, MedPAC, the number of beneficiaries receiving outpatient observation services for longer than 48 hours rapidly increased, by more than 70 percent, from 2006 to 2008.

The growth in observation care has not only generated considerable beneficiary confusion as to why Medicare does not cover their SNF care after a hospitalization, but also it has also become a substantial financial barrier to medically necessary post-acute care. Beneficiaries are left facing thousands of dollars in unreimbursed out-of-pocket charges for their care. Those who cannot afford to pay privately for their stay in a SNF may decide to forgo care altogether.

I have heard countless stories of hardship from Medicare beneficiaries in Massachusetts because of this unfair policy. I would like to share the inexcusable experience of one of my constituents, Rosemary Crossin. Rosemary is 81 years old and suffers from Parkinson's disease, arthritis, and diabetes. She was treated at a Boston hospital following a fall that left her with a broken shoulder and a broken hand.

Upon arrival at the hospital, she was examined in the ER for over 6 hours, where she waited on a hard stretcher and received a CT scan, an x ray, and two doses of morphine. At the end of her examination, Rosemary, disoriented and unable to walk on her own due to the combination of her chronic conditions, morphine, and broken bones, was treated in the hospital under observation status.

At no time did the hospital inform Rosemary's family what observation status meant. Rosemary remained in the hospital for over 4 days while she recovered, after which time a physician determined that Rosemary be transferred to an extended stay facility to complete her rehabilitation.

Despite spending over 4 days in the hospital, after the hospital itself determined she was not fit to return home, Rosemary was never admitted as an inpatient. Because she was never classified as an inpatient for billing purposes, she was told that her costs would not be covered by Medicare. Rosemary was told that she would have to prepay $7998 to the skilled nursing facility or remain at the hospital at a cost of $1200 per day. This is wrong, and it needs to be changed.

Currently, Rosemary continues to rehabilitate her injuries at the skilled nursing facility. Unfortunately, because she was in observation status for her entire hospital stay, all subsequent costs will need to be paid for out-of-pocket.

Rosemary could have to spend up to $18,000 out-of-pocket following her fall, all because the hospital kept her under observation status for more than 96 hours after it determined she was not fit to go home.

Unfortunately, Rosemary's experience is not unique. That is why Senator Snowe and I are working together to prevent billing technicalities from hampering access to skilled nursing care. Today, we are introducing the Improving Access to Medicare Coverage Act of 2011, which would eliminate financial barriers to skilled nursing care in Medicare by allowing observation stays to be counted toward the 3-day mandatory inpatient stay for Medicare coverage of SNF services.

This legislation is supported by a number of national organizations from both the provider and beneficiary communities. I would like to thank a number of organizations that have been integral to the development of the Improving Access to Medicare Coverage Act of 2011 and that have endorsed our legislation today, including the AARP, the American Health Care Association, the American Medical Association, the American Medical Directors Association, the Center for Medicare Advocacy, LeadingAge, and the National Committee to Preserve Social Security and Medicare.

The Improving Access to Medicare Coverage Act will ensure that vulnerable patients like Rosemary will no longer have to suffer or worry about affording medically needed care because of a hospital billing classification issue.

I urge my colleagues to support our legislation to eliminate unnecessary barriers to skilled nursing care and to bring peace of mind to patients and their families.


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