New state law affects health care coverage for all “observation” patients at all hospitals in Va.

Overview
• New state law effective July 1 requires outpatients under observation orders to be informed verbally and in writing of their status.
• Outpatient care is covered differently than inpatient care by Medicare, Medicaid and private insurances.

Outpatients in Virginia hospitals under observation orders from their doctors will be notified of their status, verbally and in writing, under a new state law that took effect July 1, 2015. Patients will also be asked to sign a form letter acknowledging that they understand they are outpatients, even though they may spend the night in a hospital bed and receive a meal.

“Outpatient care and observation services are covered differently than inpatient care by Medicare, Medicaid and private insurance plans,” said Teresa Gonzalvo, vice president of Care Coordination for Sentara Healthcare, in a press release. “The state legislature wants outpatients under observation to be aware of their status so there are no surprises when their bills arrive.”

There are a number of reasons outpatients could have an extended stay or spend the night. For instance, a patient experiencing chest pain may present to the emergency department and need to be observed on a medical unit in the hospital for continuing symptoms without being admitted.

In this case, the patient would be an outpatient even though he or she stayed overnight and underwent testing. After having a patient under observation for 24 to 48 hours, physicians can usually complete a diagnosis and decide on admission as an inpatient or discharge.

The letter patients will be asked to sign will advise them that their outpatient status may affect their insurance coverage for medications and other supplies, or skilled nursing care upon hospital discharge.

“All hospitals in Virginia are now required to notify outpatients under observation orders of their status and, in the absence of a formal regulation, we are all doing our best to comply,” Gonzalvo said. “The Virginia Department of Health will produce a formal regulation at a later time and we understand the intent of the legislation is to keep patients fully informed.”

Patient Resources:
Medicare patients with questions about their status can contact the Virginia Quality Improvement Organization, KEPRO at 1-844-455-8708.

Patients with private insurance can call their plans’ customer service departments.

Patients with questions about the hospital bills they receive can contact their local hospitals’ financial services departments at the numbers displayed on their bills.

Legislation:  Patient Notification of Observation or Outpatient Status 32.1-137.03
http://leg1.state.va.us/cgi-bin/legp504.exe?151+ful+CHAP0365+hil