John Kerry: “today too many Medicare beneficiaries are being saddled with thousands of dollars of unnecessary out-of-pocket costs for…”

“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.…”