,i  #aae? ,,congress  #a/ ,session  ,h4 
,r4 #adba  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,m>* #h1 #bjag,mr4    
,c\rtney 7= himself1 ,mr4 ,?ompson (    
,p5nsylvania1 ,mr4 ,de,fazio1 ,ms4      
,de,lauro1 ,ms4 ,tsongas1 ,ms4          
,mc,collum1 ,mr4 ,langev91 ,ms4         
,del,bene1 ,mr4 ,heck1 ,mr4 ,walz1 ,mr4 
,ellison1 ,mr4 ,kilm]1 ,mr4 ,sean       
,patrick ,maloney ( ,new ,york1 ,ms4    
,ku/] ( ,new ,hamp%ire1 & ,mr4          
,s5s5br5n]7 introduc$ ! foll[+ bill2 :i*
 0 ref]r$ to ! ,committee on ,ways &    
,means1 & 9 addition to ! ,committee on 
,en]gy & ,comm]ce1 = a p]iod to be      
subsequ5tly det]m9$ by ! ,speak]1 9 ea* 
case = consid]ation ( su* provisions z  
fall )9 ! jurisdiction ( ! committee    
conc]n$  ,a ,,bill  ,to am5d title      
,,xviii ( ! ,social ,security ,act to   
c\nt a p]iod ( receipt ( outpati5t      
obs]vation s]vices 9 a hospital t[>d    
satisfy+ ! #c-;day inpati5t hospital /ay
 requirem5t = cov]age ( skill$ nurs+    
facility s]vices "u ,m$ic>e1 & = o!r    

purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,improv+ ,access to ,m$ic>e
 ,cov]age ,act ( #bjag4  #b4 ,f9d+s     
,congress f9ds ! foll[+3  7#a7 ,m$ic>e  
requires b5efici>ies to be hospitaliz$ =
 m$ically necess>y inpati5t hospital c>e
 = at lea/ ?ree consecutive days be=e   
cov]+ po/-hospital c>e 9 a skill$ nurs+ 
facility "u section #ahfa7;i7 ( !       
,social ,security ,act 7#db ,u4,s4,c4   
#aciex7i774  7#b7 ,(t5 pati5ts rema9 "u 
obs]vation /atus 9 ! hospital = sev]al  
days & ^! obs]vation days are n c\nt$   
t[>d ! #c-;day /ay requirem5t because !y
 are consid]$ outpati5t days4  7#c7     
,hospitals' use ( obs]vation /ays has   
increas$ %>ply s9ce #bjjf4 ,accord+ to !
 ,m>* #bjad report ( ! ,m$ic>e ,paym5t  
,advisory ,commission1 outpati5t visits1
 _m ( :i* are obs]vation /ays1 increas$ 
#bh4e p]c5t betwe5 #bjjf & #bjab1 ) a   
simultane\s #ab4f p]c5t decrease 9      
inpati5t /ays ov] ?is same six-ye> "t   
p]iod4 ,a /udy publi%$ 9 ,heal? ,affairs
 f\nd a #cd-p]c5t increase 9 ! ratio (  

obs]vation /ays to inpati5t admissions  
betwe5 #bjjg & #bjji1 lead+ ! rese>*]s  
to conclude t outpati5t obs]vation /atus
 0 becom+ a sub/itute = inpati5t        
admission4 ,! same /udy also docum5t$   
increases 9 long-/ay outpati5t /atus1   
includ+ an #hh-p]c5t increase 9         
obs]vation /ays exce$+ #gb h\rs4  7#d7  
,to heal? c>e provid]s1 c>e provid$ dur+
 obs]vation is indi/+ui%able f ! c>e    
provid$ to inpati5ts & all m$ically     
necess>y c>e is provid$1 reg>dless (    
pati5t /atus4 ,b5efici>ies are g5]ally n
 in=m$ ( _! inpati5t or outpati5t /atus 
& assume t !y are inpati5ts :5 !y are   
plac$ 9 a hospital b$1 only to f9d out t
 su* c>e 0 n c\nt$ = purposes ( satisfy+
 eligibility requirem5ts = m$ically     
prescrib$ ,m$ic>e cov]age ( po/-hospital
 c>e 9 a skill$ nurs+ facility4  7#e7   
,old] ,am]icans & p ) disabilities :o   
are hospitaliz$ b d n meet ! #c-;day    
inpati5t hospital /ay requirem5t simply 
because !y 7 plac$ 9 outpati5t          
obs]vation /atus = "s or all ( _!       

hospital /ay 7ev5 :5 _! total actual /ay
 exce$s ?ree days 9 ! hospital7 c face a
 significant & unexpect$ f9ancial burd51
 :i* c am\nt to ?\s&s ( doll>s1 = skill$
 nurs+ facility c>e4 ,among b5efici>ies 
:o receiv$ c>e 9 a skill$ nurs+ facility
 t ,m$ic>e did n cov]1 ! av]age         
out-(-pocket *>ges 7 m ?an #aj1jjj1     
accord+ to ! ,(fice ( ,inspector ,g5]al 
( ! ,dep>tm5t ( ,heal? & ,human         
,s]vices4  7#f7 ,! ,c5t]s = ,m$ic>e     
,m$icaid ,s]vices 7,,cms7 attempt$ to   
provide hospitals ) cl>ity on :i*       
pati5ts %\ld be categoriz$ z inpati5ts 9
 ! inpati5t hospital paym5t rule =      
fiscal ye> #bjad4 ,h[ev]1 ?is rule fails
 ,m$ic>e b5efici>ies because x does n   
address ! problem & explicitly /ates t  
days sp5t 9 obs]vation /atus d n c\nt = 
purposes ( satisfy+ ! #c-;day inpati5t  
/ay requirem5t4  7#g7 ,because ( ,,cms' 
policy :i* indicates days "u obs]vation 
d n c\nt t[>ds ! #c-;day inpati5t /ay   
requirem5t1 "s pati5ts "u obs]vation &  
_! families w cont9ue to face a         

significant1 (t5 insurm\ntable f9ancial 
burd5 if !y ne$ skill$ nurs+ c>e aft] _!
 hospital /ay4  7#h7 ,?is ,act updates  
,m$ic>e policy by deem+ pati5ts "u      
obs]vation z inpati5ts = ! purposes (   
satisfy+ ! ,m$ic>e #c-;day inpati5t /ay 
requirem5t4 ,?is ,act does n repeal !   
#c-;day inpati5t /ay requirem5t2 r x    
simply exp&s ! ,secret>y's adm9i/rative 
def9ition ( inpati5t = purposes ( !     
#c-;day /ay requirem5t to include "t    
sp5t "u obs]vation4 ,z su*1 x is n a    
reprise ( ! ,m$ic>e ,cata/rophic        
,cov]age ,act ( #aihh1 :i* repeal$ !    
#c-;day requirem5t4 ,?is ,act simply    
re/ores ! orig9al objective ( ! #c-;day 
rule1 :i* 0 to ensure ,m$ic>e cov]age ( 
skill$ nurs+ facility /ays foll[+       
hospital c>e = pati5ts :o /ay$ 9 !      
hospital = #c days4  7#i7 ,x is ! int5t 
( ?is ,congress1 ?r\gh ?is ,act1 to all[
 access to skill$ nurs+ c>e = !         
population ( b5efici>ies :o meet m$ical 
necessity requirem5ts = su* c>e1 b :o d 
n satisfy ! #c-;day inpati5t /ay        

requirem5t simply because "s or all ( _!
 "t 9 ! acute c>e hospital is *>act]iz$ 
z outpati5t obs]vation /atus = bill+    
purposes4  7#aj7 ,x is ! und]/&+ (      
,congress t ! ,secret>y ( ,heal? &      
,human ,s]vices w monitor patt]ns (     
behavior to ensure t provid]s deliv]    
appropriate & ne$$ levels ( c>e4  7#aa7 
,! ,(fice ( ! ,inspector ,g5]al ( !     
,dep>tm5t ( ,heal? & ,human ,s]vices is 
supportive ( c\nt+ hospital obs]vation  
days t[>ds ! #c-;day inpati5t /ay       
requirem5t4 ,9 addition1 9 ,septemb]    
#bjac1 ! ,congressionally e/abli%$      
,commission on ,long-,t]m ,c>e recomm5d$
 t ,,cms' c\nt "t sp5t 9 obs]vation     
/atus t[>d meet+ ,m$ic>e's #c-;day /ay  
requirem5t4 ,9 addition1 9 a ,decemb]   
#bjaf report1 ! ,(fice ( ! ,inspector   
,g5]al ( ! ,dep>tm5t ( ,heal? & ,human  
,s]vices f\nd t an increas$ numb] (     
,m$ic>e b5efici>ies classifi$ z         
outpati5ts are pay+ m = c>e t is        
sub/antively simil>1 & h limit$ access  
to skill$ nurs+ facility c>e due to _!  

pati5t /atus4  #c4 ,c\nt+ a p]iod (     
receipt ( outpati5t obs]vation s]vices 9
 a hospital t[>d ! #c-;day inpati5t     
hospital /ay requirem5t = cov]age (     
skill$ nurs+ facility s]vices "u m$ic>e 
7a7 ,9 g5]al ,section #ahfa7;i7 ( !     
,social ,security ,act 7#db ,u4,s4,c4   
#aciex7i77 is am5d$ by add+ at ! end !  
foll[+3 ,= purposes ( ?is subsection1 an
 individual receiv+ outpati5t obs]vation
 s]vices %all be deem$ to be an inpati5t
 dur+ su* p]iod1 & ! date su* individual
 ceases receiv+ su* s]vices %all be     
deem$ ! hospital dis*>ge date 7unless   
su* individual is admitt$ z a hospital  
inpati5t at ! end ( su* p]iod744  7b7   
,effective date ,! am5dm5t made by      
subsection 7a7 %all apply to receipt (  
outpati5t obs]vation s]vices beg9n+ on  
or aft] ,janu>y #a1 #bjag1 b applies to 
a p]iod ( po/-hospital ext5d$ c>e       
s]vices t 0 complet$ be=e ! date ( !    
enactm5t ( ?is ,act only if an          
adm9i/rative appeal is or has be5 made )
 respect to su* s]vices n lat] ?an #ij  

days aft] ! date ( ! enactm5t ( ?is     
,act4 ,not)/&+ any o!r provision ( law1 
! ,secret>y ( ,heal? & ,human ,s]vices  
may implem5t su* am5dm5t ?r\gh an int]im
 f9al regulation1 program in/ruction1 or
 o!rwise4