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AARP Releases New Report, Recommends Passage of Courtney Legislation

November 15, 2013
Press Release

WASHINGTON--Today, Congressman Joe Courtney released the following statement on a new study from the AARP Public Policy Institute that shows a dramatic increase in the number of observation status hospital stays between 2001 and 2009. Use of the “observation” classification for Medicare beneficiaries more than doubled during that time period as the average length of those hospital stays increased. 

As more Medicare beneficiaries are classified under outpatient observation status, access to medically-necessary skilled nursing care is jeopardized.  Under current law, a Medicare beneficiary must have a three-day inpatient hospital stay in order to receive skilled nursing care benefits. 

“AARP’s findings highlight the urgent need to fix an outdated law to protect seniors and their families from unfair and unanticipated out-of-pocket costs they might face when they leave the hospital,”said Congressman Courtney.

“The bill I introduced would allow time spent on observation status to count toward the three-day requisite hospital stay to qualify for Medicare coverage of medically prescribed follow-on care, ensuring that patients, families, and providers have a simple benchmark and know what to expect. I am encouraged by growing support for the bill, which has 107 bipartisan co-sponsors, and I am hopeful that this strong and expanding coalition can pass a solution for Medicare beneficiaries and their families,” said Courtney.

The report found that from 2001 to 2009, the number of observation status hospital stays lasting 48 hours or more grew nearly 250%, and leaves seniors vulnerable to costly bills for necessary care:

“The magnitude of these changes raises concern that observation is becoming a substitute for inpatient admission and, in the process, may be of questionable clinical benefit… As a result, some beneficiaries may incur out-of-pocket expenses for [skilled nursing facility] care that can amount to thousands of dollars.”

To address this problem, the AARP report recommends that Medicare “credit time spent in [observation status] toward the 3-day prior stay requirement, as proposed by bipartisan legislation pending in Congress, to reduce the impact of more frequent and longer [observation status] use.” This recommendation refers to H.R. 1179, the Improving Access to Medicare Coverage Act, introduced by Courtney and Rep. Tom Latham(R-Iowa). The bill has also earned support from dozens of patient, provider, and advocacy groups, including the American Health Care Association (AHCA), American Medical Association (AMA), and the Center for Medicare Advocacy.