Hospitals Required To Tell Patients Of Observation Care Status

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Starting Wednesday, a new state law requires Connecticut hospitals to tell all patients when they are being kept in the hospital for observation instead of being admitted and to warn them about the financial consequences.

Anyone who goes to the hospital can be placed on observation status, so that doctors can determine what’s wrong, and decide whether the patient is sick enough to be admitted or well enough to go home. Observation patients may receive diagnostic tests, medications, some treatment, and other outpatient services. Depending on their insurance, they can be charged a share of the cost.

“They are in a regular hospital bed in a hospital room, getting a hospital level of care, and they have no way of knowing they were not admitted,” said Rep. Susan Johnson, a sponsor of the legislation and co-chair of the General Assembly’s Public Health Committee.

In addition to hospital bills, Medicare observation patients whose doctors order follow-up nursing home care will have to pay the nursing home themselves. Medicare covers nursing homes only after seniors are admitted to the hospital and stay through three consecutive midnights. A month in a Connecticut nursing home can cost as much as $15,000.

Medicare does not require hospitals to tell patients when they are getting observation care and what it means. And the number of Medicare observation patients is growing rapidly — 88 percent in the past six years, to 1.8 million nationally in 2012, according to the Medicare Payment Advisory Commission, an independent government agency.

The Center for Medicare Advocacy in Mansfield filed a class action lawsuit against Medicare in 2011, on behalf of 14 seniors or their families, half of whom live in Connecticut, who were denied nursing home benefits and spent tens of thousands of dollars out-of-pocket for nursing home care. A federal judge in Hartford dismissed the case last year, and the center is now appealing.

Medicare officials declined to answer questions for this story “due to pending litigation concerning observation care,” said Alper Ozinal, a Medicare spokesman.

Some Connecticut hospitals already notify their Medicare observation patients, but the new law compels all hospitals to notify patients, orally and in writing, within 24 hours of placing any patient on observation status. The law also specifies what information to include, and requires a signed confirmation from patients or their representatives who receive it.

The notice must say “that observation status may affect the patient’s Medicare, Medicaid or private insurance coverage for (A) hospital services, including medications and pharmaceutical supplies, or (B) home or community-based care or care at a skilled nursing facility upon the patient’s discharge.” It must also recommend, “that the patient contact his or her health insurance provider or the Office of the Healthcare Advocate to better understand the implications of placement in observation status.”

Although Terry Berthelot, a senior attorney at the Center for Medicare Advocacy in Mansfield, welcomes the new notice, she said it could be misleading. For example, observation care definitely does limit a patient’s Medicare nursing home benefits but the notice says it “may affect” coverage.

And while the notice recommends patients contact the state healthcare advocate’s office, Medicare or other sources for more information, it’s up to the patient to find the phone numbers.

Victoria Veltri, who heads the Office of Healthcare Advocate, will be reviewing the content of actual notices and says hospitals should include phone numbers, even though that’s not required.

“I think the intent of the legislation is not to leave people stranded by saying ‘you can call OHA’ without providing info on how to call us. I think we need to make sure our information is on there,” she said. OHA can be reached at 1-866-466-4446.

At Waterbury Hospital, observation patients will be getting two notices – one that’s been used for several years,  plus a new one, starting Wednesday, that offers phone numbers and more description that the state law mandates, said Sandra Iadarola, chief nursing officer and vice president for patient care services.

“We have always felt we had an obligation to inform the people we are treating,” she said. “Medicare certainly does not go out and educate beneficiaries, and that’s a huge gap…so we end up — at the point when someone is ill — of having to explain it all to them.”

Yale-New Haven Hospital and Bridgeport and Greenwich hospitals, part of Yale New Haven Health, have also been recently providing observation patients a written notice that includes the OHA phone number, said spokeswoman Dana Marnane.

Bethelot said calling Medicare may not do much good. When her clients have asked Medicare to intervene, they are usually told that observation status is the doctor’s decision. Patients should first talk to their doctor if they feel they should be admitted, she said, and then follow additional steps outlined in the Center’s “self-help” packet.

The state Department of Public Health, which oversees hospital certification, is reviewing the law “to determine if we have a regulatory role,” said spokesman William Gerrish.

Although the notice rule gives observation patients an opportunity to challenge their status, U. S. Rep. Joe Courtney said it’s not a solution to the problem.

“It does not eliminate the unfairness of people who have been in the hospital three days [for observation] and can’t get Medicare to cover medically prescribed care after discharge,” he said.

Courtney has sponsored legislation that would count the time receiving observation care in the hospital toward the three-day minimum for Medicare nursing home coverage. Although the bill and its Senate companion continue to gain support in and out of Congress, there’s been no action since a House health committee received it last year.

Meanwhile, more states are trying to address the situation. Connecticut becomes at least the third state in the nation, after New York and Maryland to require notification for observation status. Massachusetts, New Jersey and Pennsylvania are considering similar laws.

Contact Susan Jaffe at

To view the observation care documents from Yale New Haven Health click here.

To view the observation care documents from Waterbury Hospital click here.



One thought on “Hospitals Required To Tell Patients Of Observation Care Status

  1. Sorry to be the bearer of bad news.Medicare does not pay for long term care; the most they will pay for is 100 days and then only if there is a chcane she’ll get better within that time. This is why they’re reviewing the case after three weeks. This is also why everyone needs Long Term Care Insurance.Medicaid will pay. However, she’ll have to spend down her assets before they’ll pay. What this means will depend upon the state in which they live, but your mom will have to sell almost all of her assets, including stocks, bonds, and investments. If the assests are also in your dads name he may keep 50%. They can keep the house if your dad is living there but Medicaid may place a lein on the house. She’ll have to spend almost all income she receives to pay for her care. Also, if Medicaid pays they may not authorize her to be in the same home. Not all nursing homes are approved by Medicaid; they will put her in one the cheapest places around that can give her care.The only good news I can give is your dad won’t be liable for the charges once Medicaid takes over.