Bill Seeks Limits for Observation Stays at Calif. Acute Care Hospitals

The California Legislature is considering a bill (SB 483) that aims to protect patients from unexpected costs by adding restrictions to observation stays at acute care hospitals, the Sacramento Business Journal reports.

Background

According to the Business Journal, hospitals often place patients on observation as they decide whether the patient needs to be admitted.

The short observation stays ultimately are considered as outpatient care by Medicare, which requires a patient to be admitted for at least three days before the program will cover long-term care. As such, beneficiaries often are left with unforeseen and higher medical costs.

Further, hospitals are not penalized by Medicare if a patient returns for care within 30 days unless the patient was actually admitted the first time around.

Details of Bill

SB 483, by Sen. Jim Beall (D-San Jose), seeks new restrictions and notification requirements for such observation stays. Specifically, the bill would:

• Limit the amount of time a patient can be placed on observation to 24 hours;
• Require observation services and units to meet the same staffing requirements as emergency departments;
• Require hospitals to notify patients that observation stays are considered outpatient services, which could affect prices; and
• Require hospitals to report observation services to the state Office of Statewide Health Planning and Development.

A similar bill was defeated in committee last year, according to the Business Journal.

SB 483 is supported by the California Nurses Association.

Comments

In a statement, CNA Co-President Zenei Cortez said, "Many [patients on observation stay] have serious symptoms ... and when discharged will likely return with the same symptoms or medical problem. Yet the hospital is not fined by Medicare because the patient was never formally admitted."

Meanwhile, David Perrot, CMO of the California Hospital Association, said he was "surprised" another observation stay bill had "come back again after last year's discussion." He added, "Under this bill, hospital observation units would not have higher levels of care" (Robertson, Sacramento Business Journal, 3/4).