,i  #aaeth ,,congress  #ast ,session    
,h4 ,r4 #adba  ,,in ,,the ,,house ,,of  
,,representatives  ,march #h1 #bjag,mr4 
,courtney 7for himself1 ,mr4 ,thompson  
of ,pennsylvania1 ,mr4 ,de,fazio1 ,ms4  
,de,lauro1 ,ms4 ,tsongas1 ,ms4          
,mc,collum1 ,mr4 ,langevin1 ,ms4        
,del,bene1 ,mr4 ,heck1 ,mr4 ,walz1 ,mr4 
,ellison1 ,mr4 ,kilmer1 ,mr4 ,sean      
,patrick ,maloney of ,new ,york1 ,ms4   
,kuster of ,new ,hampshire1 and ,mr4    
,sensenbrenner7 introduced the following
 bill2 which was referred to the        
,committee on ,ways and ,means1 and in  
addition to the ,committee on ,energy   
and ,commerce1 for a period to be       
subsequently determined by the ,speaker1
 in each case for consideration of such 
provisions as fall within the           
jurisdiction of the committee concerned 
,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 #c-;day inpatient 

hospital stay requirement for coverage  
of skilled nursing facility services    
under ,medicare1 and for other purposes4
  #a4 ,short title ,this ,act may be    
cited as the ,improving ,access to      
,medicare ,coverage ,act of #bjag4  #b4 
,findings ,congress finds the following3
  7#a7 ,medicare requires beneficiaries 
to be hospitalized for medically        
necessary inpatient hospital care for at
 least three consecutive days before    
covering post-hospital care in a skilled
 nursing facility under section         
#ahfa7;i7 of the ,social ,security ,act 
7#db ,u4,s4,c4 #aciex7i774  7#b7 ,often 
patients remain under observation status
 in the hospital for several days and   
these observation days are not counted  
toward the #c-;day stay requirement     
because they are considered outpatient  
days4  7#c7 ,hospitals' use of          
observation stays has increased sharply 
since #bjjf4 ,according to the ,march   
#bjad report of the ,medicare ,payment  
,advisory ,commission1 outpatient       

visits1 many of which are observation   
stays1 increased #bh4e percent between  
#bjjf and #bjab1 with a simultaneous    
#ab4f percent decrease in inpatient     
stays over this same six-year time      
period4 ,a study published in ,health   
,affairs found a #cd-percent increase in
 the ratio of observation stays to      
inpatient admissions between #bjjg and  
#bjji1 leading the researchers to       
conclude that outpatient observation    
status was becoming a substitute for    
inpatient admission4 ,the same study    
also documented increases in long-stay  
outpatient status1 including an         
#hh-percent increase in observation     
stays exceeding #gb hours4  7#d7 ,to    
health care providers1 care provided    
during observation is indistinguishable 
from the care provided to inpatients and
 all medically necessary care is        
provided1 regardless of patient status4 
,beneficiaries are generally not        
informed of their inpatient or          
outpatient status and assume that they  

are inpatients when they are placed in a
 hospital bed1 only to find out that    
such care was not counted for purposes  
of satisfying eligibility requirements  
for medically prescribed ,medicare      
coverage of post-hospital care in a     
skilled nursing facility4  7#e7 ,older  
,americans and people with disabilities 
who are hospitalized but do not meet the
 #c-;day inpatient hospital stay        
requirement simply because they were    
placed in outpatient observation status 
for some or all of their hospital stay  
7even when their total actual stay      
exceeds three days in the hospital7 can 
face a significant and unexpected       
financial burden1 which can amount to   
thousands of dollars1 for skilled       
nursing facility care4 ,among           
beneficiaries who received care in a    
skilled nursing facility that ,medicare 
did not cover1 the average out-of-pocket
 charges were more than #aj1jjj1        
according to the ,office of ,inspector  
,general of the ,department of ,health  

and ,human ,services4  7#f7 ,the        
,centers for ,medicare  ,medicaid       
,services 7,,cms7 attempted to provide  
hospitals with clarity on which patients
 should be categorized as inpatients in 
the inpatient hospital payment rule for 
fiscal year #bjad4 ,however1 this rule  
fails ,medicare beneficiaries because it
 does not address the problem and       
explicitly states that days spent in    
observation status do not count for     
purposes of satisfying the #c-;day      
inpatient stay requirement4  7#g7       
,because of ,,cms' policy which         
indicates days under observation do not 
count towards the #c-;day inpatient stay
 requirement1 some patients under       
observation and their families will     
continue to face a significant1 often   
insurmountable financial burden if they 
need skilled nursing care after their   
hospital stay4  7#h7 ,this ,act updates 
,medicare policy by deeming patients    
under observation as inpatients for the 
purposes of satisfying the ,medicare    

#c-;day inpatient stay requirement4     
,this ,act does not repeal the #c-;day  
inpatient stay requirement2 rather it   
simply expands the ,secretary's         
administrative definition of inpatient  
for purposes of the #c-;day stay        
requirement to include time spent under 
observation4 ,as such1 it is not a      
reprise of the ,medicare ,catastrophic  
,coverage ,act of #aihh1 which repealed 
the #c-;day requirement4 ,this ,act     
simply restores the original objective  
of the #c-;day rule1 which was to ensure
 ,medicare coverage of skilled nursing  
facility stays following hospital care  
for patients who stayed in the hospital 
for #c days4  7#i7 ,it is the intent of 
this ,congress1 through this ,act1 to   
allow access to skilled nursing care for
 the population of beneficiaries who    
meet medical necessity requirements for 
such care1 but who do not satisfy the   
#c-;day inpatient stay requirement      
simply because some or all of their time
 in the acute care hospital is          

characterized as outpatient observation 
status for billing purposes4  7#aj7 ,it 
is the understanding of ,congress that  
the ,secretary of ,health and ,human    
,services will monitor patterns of      
behavior to ensure that providers       
deliver appropriate and needed levels of
 care4  7#aa7 ,the ,office of the       
,inspector ,general of the ,department  
of ,health and ,human ,services is      
supportive of counting hospital         
observation days towards the #c-;day    
inpatient stay requirement4 ,in         
addition1 in ,september #bjac1 the      
,congressionally established ,commission
 on ,long-,term ,care recommended that  
,,cms' count time spent in observation  
status toward meeting ,medicare's       
#c-;day stay requirement4 ,in addition1 
in a ,december #bjaf report1 the ,office
 of the ,inspector ,general of the      
,department of ,health and ,human       
,services found that an increased number
 of ,medicare beneficiaries classified  
as outpatients are paying more for care 

that is substantively similar1 and have 
limited access to skilled nursing       
facility care due to their patient      
status4  #c4 ,counting a period of      
receipt of outpatient observation       
services in a hospital toward the       
#c-;day inpatient hospital stay         
requirement for coverage of skilled     
nursing facility services under medicare
  7a7 ,in general ,section #ahfa7;i7 of 
the ,social ,security ,act 7#db         
,u4,s4,c4 #aciex7i77 is amended by      
adding at the end the following3 ,for   
purposes of this subsection1 an         
individual receiving outpatient         
observation services shall be deemed to 
be an inpatient during such period1 and 
the date such individual ceases         
receiving such services shall be deemed 
the hospital discharge date 7unless such
 individual is admitted as a hospital   
inpatient at the end of such period744  
7b7 ,effective date ,the amendment made 
by subsection 7a7 shall apply to receipt
 of outpatient observation services     

beginning on or after ,january #a1      
#bjag1 but applies to a period of       
post-hospital extended care services    
that was completed before the date of   
the enactment of this ,act only if an   
administrative appeal is or has been    
made with respect to such services not  
later than #ij days after the date of   
the enactment of this ,act4             
,notwithstanding any other provision of 
law1 the ,secretary of ,health and      
,human ,services may implement such     
amendment through an interim final      
regulation1 program instruction1 or     
otherwise4