Courtney hopeful Congress will address Medicare “observation status”

After years of trying, U.S. Rep. Joe Courtney, D-2^nd District, said Tuesday he’s optimistic that Congress will take action to address a technicality that has left thousands of Medicare patients without coverage for nursing home care after leaving the hospital.

At issue is how Medicare treats patients designated by hospitals as being on “observation status.” Medicare’s hospitalization benefit covers nursing home care for patients recovering from a hospital stay, if they have spent at least three consecutive days as inpatients in a hospital.

But increasingly, hospitals have been designating patients as being on observation status, even if they receive inpatient care and spend several nights in the hospital. That makes them ineligible for Medicare coverage of nursing home stays.

Advocates say many patients and their families are left to choose between paying thousands of dollars of their own money for nursing home care or going home before they’ve fully recovered.

Courtney and Iowa Republican Rep. Tom Latham have introduced a bill that would count the days patients are hospitalized on observation status as inpatient days, allowing them to receive Medicare coverage for nursing facility care.

Although previous versions drew a handful of supporters, the bill now has 137 co-sponsors in the House, Courtney told reporters during a conference call with Sen. Sherrod Brown, D-Ohio.

“This is not happening in a vacuum,” Courtney said. “It’s happening because there is an intensifying effect here in terms of the numbers of patients who are being affected.”

In 2012, Medicare beneficiaries had more than 600,000 hospital stays that lasted for three or more nights but did not qualify them for coverage of nursing home care, according to the Inspector General for the U.S. Department of Health and Human Services.

Dr. Ann Sheehy, a hospitalist and professor at the University of Wisconsin School of Medicine and Public Health, said the use of observation status and the way Medicare treats it leaves patients’ families to create discharge plans that are not optimal. In some cases, patients return to the hospital dehydrated or after having fallen at home because they didn’t go to a nursing home to recover.

“I am left as a physician explaining to my patients why I feel the safest discharge is to a skilled nursing facility but also telling them that they don’t qualify because they are observation [status],” Sheehy said.

“Some people are turning in life insurance policies to pay for nursing home care they can’t afford,” said Toby Edelman, a senior policy attorney at the Center for Medicare Advocacy.

Courtney said supporters of the changes have also been meeting with officials at the Centers for Medicare and Medicaid Services to try to resolve the issue administratively.