Press Release

Bill would close loophole in Medicare policy that leaves seniors with high costs after leaving the hospital WASHINGTON, D.C. – U.S. Senator Peter Welch (D-Vt.) , a member of the Senate Committee on Finance, joined U.S. Senator Susan Collins (R- Maine) , a member of the Senate Committee on Health , Education , Labor and Pensions , in introducing the bipartisan, bicameral Improving Access to Medicare Coverage Act, legislation to allow the time patients spend in the hospital under “observation status” to count toward the required three-day hospital stay for Medicare coverage of skilled nursing care. U.S. Representatives Joe Courtney (D-CT-02), Glenn ‘GT’ Thompson (R-PA-15), Suzan DelBene (D-WA-01), and Ron Estes (R-KS-04) introduced companion legislation in the House. “When you’re sick and need to stay in the hospital, the last thing you should have to worry about is medical bills. But Medicare’s three-day hospital inpatient stay requirement means that seniors often later face sky-high costs for skilled nursing care that’s vital to their recovery,” said Senator Welch . “I’m proud to partner with Senator Collins in this effort that will reduce health care costs for our seniors to ensure they can get the care they need to get back on their feet.” “When seniors require hospitalization, their focus should be on their health and getting well, not on how they were admitted. Yet many older Americans face severe financial consequences because of the distinction between an observation stay and inpatient admission,” said Senator Collins . “This bipartisan bill would count time spent in observation status as inpatient care for the purpose of meeting Medicare’s three-day prior hospital stay requirement for coverage of skilled nursing care. This will help protect older Americans from undue out-of-pocket costs while ensuring they receive the care they need.” “People deserve better. Whether a patient is in the hospital for three days as an inpatient, or for three days under ‘observation status’—three days is three days. Quibbling over semantics shouldn’t keep people from accessing the care their doctors have prescribed or trap them beneath a mountain of unexpected medical debt. Our bill offers a simple, commonsense fix to Medicare’s arbitrary ‘observation status’ loophole that will help ensure seniors aren’t getting billed thousands of extra dollars in medical bills due to illogical federal policy,” said Rep. Courtney . “When facing health challenges, seniors and their families shouldn’t be burdened by unexpected medical expenses,” said Rep. Thompson . “Medicare beneficiaries deserve the reassurance and confidence that their care will be fully covered and they won’t have any out-of-pocket costs.” “Kansas seniors on Medicare deserve access to the full range of treatment and care they need, unimpeded by outdated policies that result in costly bills,” said Rep. Estes . “This common sense legislation updates Medicare’s policy on skilled nursing care to make it more efficient and lead to better outcomes for patients.” “With health care already a significant expense for seniors, the last thing they need is an expensive and unexpected medical bill. When a Medicare patient is in the hospital for three days, that should meet the three-day requirement. Plain and simple,” said Rep. DelBene . “Differentiating between ‘inpatient’ and ‘observation’ is what frustrates people about the health care system. This legislation would make clear that three days means three days, allowing seniors to access rehabilitation services they need to get better and not incur a massive unexpected medical bill.” During the COVID-19 Public Health Emergency, the three-day requirement was waived, allowing patients to receive skilled nursing  care regardless of their hospital status. However, the policy is now being reimposed on beneficiaries, causing confusion, unexpected bills, and delays in care. Under current Medicare policy, a beneficiary must have an inpatient hospital stay of at least three days before Medicare will cover post-hospitalization skilled nursing care. Patients who receive hospital care under “observation status” do not qualify for this benefit, even if their hospital stay lasts longer than three days. The Improving Access to Medicare Coverage Act would change this policy by: Amending Medicare law to count a beneficiary’s time spent in the hospital under “observation status” toward the three-day hospital stay requirement for skilled nursing care; and Establishing a 90-day appeal period for individuals who had a qualifying hospital stay and were denied Medicare coverage for skilled nursing care before enactment but after January 1, 2026. The legislation is supported by the Society of Hospital Medicine, the American Health Care Association, and more than 30 other organizations representing seniors and their health care needs. “The Society of Hospital Medicine is proud to support the Improving Access to Medicare Coverage Act ,” said Dr. Eric E. Howell, CEO of SHM. “As the front-line physicians who oversee the vast majority of observation care in America’s hospitals, hospitalists see every day how the three-day inpatient stay requirement creates an arbitrary barrier to skilled nursing facility coverage, leaving Medicare beneficiaries with unexpected, exorbitant bills or forcing them to forgo necessary post-acute care altogether. By counting observation days toward the three-day stay requirement, this legislation takes an important step toward eliminating bureaucratic obstacles to medical care and addressing the healthcare access inequities that disproportionately affect our most disadvantaged communities.” Senator Welch has led efforts to protect seniors’ access to health care and improve and expand Medicare in Vermont. This Congress, Senator Welch has led the introduction of several bills to make health care more accessible and affordable for Vermonters, including the 340B Pharmaceutical Access To Invest in Essential, Needed Treatments & Support (PATIENTS) Act , Eliminating Thickets to Improve Competition (ETHIC) Act , Maximizing Opioid Recovery Emergency (MORE) Savings Act, Strengthening Medicare and Reducing Taxpayer (SMART) Prices Act , Fair Prescription Drug Prices for Americans Act , End Price Gouging for Medications Act , Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act , Fair Funding for Rural Hospitals Act , and the Rural Hospital Support Act . ###