- California lawmakers overwhelmingly approved legislation last week that would protect seniors in the state with Medicare coverage from surprise medical bills for observation services, California Healthline reports.
- The legislation would require hospitals in the state to notify patients when they are receiving observation care beginning Jan. 1, 2017 so that they know if they will be covered or charged an out-of-network rate.
- Gov. Jerry Brown (D) must now decide whether to sign the legislation into law. Sen. Ed Hernandez (D) told California Healthline that it could be combined with a federal observation care notice.
California's ploy is timely as it addresses a growing concern in the healthcare community that the country's aging population will outpace growth in revenues, which was recently affirmed by the Congressional Budget Office in its updated federal budget outlook report.
Seniors are financially impacted by surprise medical bills more so than Medicare when it comes to observation care because it can lead to higher out-of-pocket expenses since its considered an outpatient service.
As noted by California Healthline, patients receiving observation services may sometimes have to pay more for treatments and tests than admitted patients, adding that Medicare does not cover the costs of follow-ups in nursing homes after staying for fewer days than the required minimum of three days in a row when admitted.
Other states have passed laws similar to California's legislation such as Florida and New York. But the issue of whether providers should bill patient in-network rates or insurers should cover the extra costs is still under debate.