Notice of Observation Treatment and Implication for Care Eligibility Act

Floor Speech

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Mr. DOGGETT. Mr. Speaker, I rise in support of the bill and yield myself such time as I might consume.

The NOTICE Act, as the name suggests, is about giving notice. In this case, it gives notice to patients when they are about to be billed personally, perhaps for many thousands of dollars, because they were characterized as under observation rather than regular inpatient status without them even knowing.

I am pleased to have worked on this legislation since last summer with Mr. Young when we originally filed the bill, and I am appreciative of Chairman Ryan's prompt consideration of it in our committee.

This is a consumer protection bill designed to provide at least limited protection to health care consumers. Currently, a hospital may either admit a patient as an inpatient or keep them under observation. This categorization might apply to heart murmur, irregular heartbeat, indigestion, or other symptoms that would cause a senior or an
individual with a disability who is covered by Medicare to go into the hospital.

It probably makes little or no difference in the way the hospital treats the physical condition, but it can make a very big difference in terms of how the patient's pocketbook is cared for. Indeed, the effect of being under observation is that the patient gets stuck with the bill for any skilled nursing home care that is required for rehabilitative services after the stay at the hospital.

Medicare will pay for that needed care if a Medicare recipient patient is hospitalized for more than 3 days as an inpatient, but Medicare will not pay for skilled nursing home care if someone is simply under observation. Since Medicare has paid nothing, there is
also no gap to be covered by Medigap; and instead of being in a gap, folks like this are really left in just a giant black hole. A Medicare patient that is sucked into this hole will be billed for the entire cost of rehabilitation at the nursing home, which can run into tens of thousands of dollars.

This practice is happening more and more across America, though it is largely unknown to most people until they get caught up in it. In 2012, Medicare patients had more than 600,000 observation stays that lasted 3 days or more. According to one study, over a 6-year span, the number of stays under observation has increased by 88 percent. Many Medicare patients are being put under observation for a length of time that exceeds the guidelines that have been set by Medicare.

Last year on the NBC Nightly News, Kate Snow profiled Ms. Kelley-Nelum, who discovered that this costly classification had a big impact on her hospitalized husband. After repeated questioning and demanding to know why her husband was under observation, she got the hospital to reclassify him. She later learned that had that not occurred, had she not been persistent in standing up for her ill husband, that they would have faced about $22,000 in out-of-pocket rehabilitation bills.

Last year, with so many patients facing insurmountable out-of-pocket costs for skilled nursing care after unknowingly being placed under observation, The New York Times actually ran a piece that was designed to provide guidance to health care consumers about how to get out of this observation category. The first step is knowing you are in it, and this bill provides for that meaningful disclosure.

This legislation is endorsed by AARP, by the Alliance for Retired Americans, the Center for Medicare Advocacy, the National Association of Professional Geriatric Care Managers, LeadingAge, American Health Care Association, and the National Committee to Preserve Social Security and Medicare.

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