NAHU Washington Update - 06/25/2021  (Plain Text Version)

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In this issue:
•  Fast Facts
•  Senators Agree on Bipartisan Infrastructure Package; No Healthcare Provisions Included
•  NAHU Submits Letter Supporting Legislation to Expand Telehealth
•  Ask Your Legislators to Put an End to the Observation-Status Loophole
•  State Spotlight: Colorado and Nevada Pass Watered-Down Public-Option Laws
•  Healthcare Happy Hour: Legislators Introduce Bills to Put an End to Medicare Observation-Status Loophole
•  HUPAC Roundup: HUPAC Announces Exciting Annual Convention Events
•  What We're Reading

 

Ask Your Legislators to Put an End to the Observation-Status Loophole

While this observation-status loophole has been temporarily waived during the pandemic, as of now it will be enforced again once the public health emergency comes to an end unless Congress passes this fix beforehand. That is why it is more important than ever to contact your legislators and ask them to finally put an end to this practice...

NAHU is calling on all members to contact their federal legislators and urge them to co-sponsor H.R. 3650 and S. 2048 through our recently released Operation Shout campaigns.

Currently, Medicare beneficiaries who are not officially admitted to a hospital may be classified under “observation status,” which is treated as an outpatient procedure for billing purposes. Unfortunately, the common practice of placing a beneficiary on observation status can have significant financial consequences for Medicare beneficiaries since Medicare Part A and its related coverage rules only apply to actual inpatient care admissions. This may lead patients, many who are extremely sick and may need skilled nursing care, to spend many days in the hospital and be charged for services that Medicare would have otherwise paid had they been admitted. Furthermore, hospitals have up to one year to retroactively change admission status to observation, leading unsuspecting beneficiaries with thousands of dollars in bills for SNF care they believed would be covered by Medicare.

The issue stems from policies designed to prevent unnecessary hospital readmissions, where Medicare would penalize hospitals when patients would be re-hospitalized within a month of being discharged. Hospitals with readmission rates above the national average would receive lower Medicare reimbursements, thereby in theory incenting hospitals to adequately treat patients the first time and avoid re-admissions. However, in response to the policy, some hospitals increasingly placed patients under observation status, allowing them to provide care for patients whose conditions were not poor enough to be admitted without the hospital being penalized for a re-admission. Regardless if care was performed in the inpatient unit, these visits would be classified as outpatient procedures and billed under Medicare Part B, which could result in higher cost-sharing for the patient.

While this observation-status loophole has been temporarily waived during the pandemic, as of now it will be enforced again once the public health emergency comes to an end unless Congress passes this fix beforehand. That is why it is more important than ever to contact your legislators and ask them to finally put an end to this practice. Click here to take action on the House bill and click here to take action on the Senate bill.