NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7257A
SPONSOR: Peoples-Stokes (MS) TITLE OF BILL: An act to amend the public health law, in relation to
patient notice of the provision of observation services
PURPOSE:
To require hospitals to provide notice to patients placed in observation
services and explain the implications thereof
SUMMARY OF PROVISIONS:
Section one amends the Public Health Law by adding a new section,
2805-w. Subdivision one requires every general hospital to provide
patients placed into observation services with oral and written notice
within 24 hours of such placement explaining that the patient is under
observation status and has not been admitted to the hospital. The signa-
ture of the patient or their legal representative must be obtained to
acknowledge receipt. The notice must include: that observation status
may affect the patient's Medicare, Medicaid, and/or private insurance
coverage for the current hospital services, and advise the patient to
contact his or her insurance plan to better understand the implications
of being placed on observation status. Subdivision two provides that the
commissioner shall make available guidance on the notice.
Section two provides that the act shall take effect immediately, except
that the provision requiring the notice will take effect 90 days after
enactment.
JUSTIFICATION:
A little known change at the federal level is having a large impact on
hospitals and, in turn, their patients. Patients who think they have
been "admitted" to the hospital, are finding out after the fact that
they were being "observed" instead. This difference in status comes
despite the fact that they have likely been moved from the emergency
room to a bed in the hospital just like an admitted patient. Unfortu-
nately, the consequences for Medicare patients are particularly severe
as Medicare reimburses differently for outpatient (i.e. hospital obser-
vation services). Additionally, the time a patient spends in. a hospital
under observation status does not qualify them for skilled nursing
facility care they may require to rehabilitate. This bill requires that
patients be notified verbally and in writing if they are placed in
observation status and requires the Department of Health to establish a
standard notification form.
The federal Centers for Medicare and Medicaid Services (CMS) has begun
requiring hospitals to make a distinction between admitting a patient
and observing a patient to further evaluate the patient's condition and
need for an. admission Hospitals are being audited to enforce these
provisions and where CMS decides that someone should have been in
"observation" status they are disallowing any Medicare payment to the
hospitals Since these audits have begun, reports have shown a national
increase in the number of patients that hospitals are placing under
observation care However, when a physician orders that a patient receive
observation care, the patient's status is that of an outpatient and they
lose important Medicare benefits.
As an outpatient, Medicare coverage comes under Part B (doctors'
services and outpatient care) rather than under Part A (hospital insur-
ance) as it would for an admitted patient This results in some patients
paying more out of pocket due to higher co-payments for in-hospital
services, especially if they need prescriptions drugs that, in this
situation would be covered under Part A and not under Part B Addi-
tionally, under Medicare rules, patients qualify for full coverage of
the first 20 days of post-hospital rehab care in an approved skilled
nursing facility only after having spent three full days in the hospital
as an admitted patient. Thus, a patient who has been under observation
services (for all or part of that time) would be responsible for the
cost of the nursing facility care subsequent to the patient's time in
observation.
Patients are often not notified of their status and do not realize the
difference in out of pocket expense until it comes time to pay for the
services. This bill will ensure that patients are notified when they are
placed in observation status. of the differences that accompany their
status as a patient receiving observation services as opposed to an
admitted patient.
LEGISLATIVE HISTORY:
New Bill.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This bill shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
7257--A
2013-2014 Regular Sessions
IN ASSEMBLY
May 8, 2013
___________
Introduced by M. of A. PEOPLES-STOKES, GOTTFRIED, JAFFEE -- read once
and referred to the Committee on Health -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the public health law, in relation to patient notice of
the provision of observation services
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The public health law is amended by adding a new section
2 2805-w to read as follows:
3 § 2805-w. Patient notice of observation services. 1. Every general
4 hospital shall provide patients who are placed into observation services
5 by such general hospital with an oral and written notice within twenty-
6 four hours of such placement that the patient is not admitted to the
7 hospital and is under observation status. Such written notice shall be
8 signed by the patient or the patient's legal representative to acknowl-
9 edge receipt and shall include, but not be limited to, the following
10 information:
11 (a) a statement that observation status may affect the patient's Medi-
12 care, Medicaid and/or private insurance coverage for the current hospi-
13 tal services, including medications and other pharmaceutical supplies,
14 as well as coverage for any subsequent discharge to a skilled nursing
15 facility or home and community based care; and
16 (b) that the patient should contact his or her insurance plan to
17 better understand the implications of being placed in observation
18 status.
19 2. The commissioner shall develop and make available guidance on the
20 notice as described in this section.
21 § 2. This act shall take effect immediately, except that subdivision 1
22 of section 2805-w of the public health law, as added by section one of
23 this act, shall take effect on the ninetieth day after this act shall
24 have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05275-07-3
