The scenario works something like this: A Medicare patient goes to an emergency room because he or she has serious symptoms such as chest pain or shortness of breath.

The patient is taken to a room. Nurses and doctors are assigned and tests are run, over hours or days, to determine the nature of the problem.

At this point, is this person "in" the hospital? Has the patient been "admitted," or is the patient under "observation?"

The patient might be unable to discern the difference in his or her technical status at the hospital, but it's an important distinction that could cost him or her hundreds or thousands of dollars in testing and subsequent rehabilitation costs not covered by Medicare for "observation" status patients.

Catching attention: This scenario has drawn ire from Medicare recipients both in York County and nationwide, and Pennsylvania legislators are hoping to help seniors avoid some sticker shock.

The state House recently unanimously passed a bipartisan bill introduced by Majority Whip Stan Saylor, R-Windsor Township, requiring hospitals "to provide oral and written notice to the patient of their outpatient status after they have spent a full day in the hospital outside the emergency department."

This would help avoid the situation in which a person is in a hospital on "observation" for several days without knowing he or she will be responsible for a potentially large bill. Senior citizens have accrued thousands of dollars in charges after being placed in "observation" while doctors performed tests to determine if the patient should be admitted to the hospital, Saylor said.


He attributed the confusion to a "growing trend in the hospital industry" to use the observation status instead of an admission status, thus avoiding federal penalties or scrutiny for having a higher percentage of "re-admissions."

Medicare and some other insurers consider observation to be "outpatient" care, so patients might have to pay out-of-pocket for tests while on observation, Saylor said.

Seniors could also be responsible for the cost of rehabilitation following an "observation" hospital stay because Medicare requires a hospital "admission" of at least three days before paying for subsequent skilled nursing care or rehab, Saylor said.

So if a patient is in the hospital for three days and one of those days was considered "observation," the patient's following nursing home visit would not be covered.

"The patients come out of rehab and they're like, 'Oh, my' when they get the bill," he said. "We're talking lots of money ... some nursing homes cost $30,000 for four weeks."

Hospitals agree: Saylor said there are "lots of cases, everywhere" of seniors reporting they didn't realize they weren't technically "admitted" during a hospital stay.

Jeff Pine, a board member of the National Association of Professional Geriatric Care Managers, said bill's like Saylor's are "imperative."

"The 'observation status' is very-much talked about within our organization, across the country," he said. "Folks are struggling with what to do about it. In every situation I've run into, the patient has no idea, nor does the family."

Pine said more states need to pass bills such as Saylor's to inspire the U.S. Congress to act on pending federal legislation that would also address the issue.

Saylor said his bill is a "temporary fix" until Congress corrects the cost-saving Medicare changes that caused the problem.

"This doesn't mean the hospitals are terrible," Saylor said. "They're living with the hand being dealt by federal government."

WellSpan Health spokesman Barry Sparks said the health system, which includes York Hospital, supports the legislation.

"WellSpan has processes in place to notify patients of their level of care, whether it is as an inpatient or observational status," he said. "There is, however, still some confusion."

The process: Saylor's bill must pass the Senate and be signed by the governor before becoming law.

The measure passed the House last month but has not yet been assigned to a committee in the Senate.

Sen. Pat Vance, R-Cumberland/York, is likely to see the bill in committee, as she chairs the Senate's Health and Welfare Committee and sits on other committees to which the legislation could be assigned.

A registered nurse, Vance said she supports "the concept" of the bill and has received phone calls from constituents who received unexpectedly high bills.

She wants to review the entire bill as presented for vote before committing her support, she said.

Back in the House, Rep. Kevin Schreiber, D-York City, described the bill as a "sign the system is working," and he said he hopes it becomes law.

"Bills like this, I think, are friendly to the public, friendly to the consumer and are genuinely just trying to bring some clarity to the situation," he said. "It was a unanimous vote, a bipartisan bill that's helping constituents. We lose sight sometimes ... and become jaded about ideological issues that become stalemated or gridlocked. This shows the system is working on a daily basis."

— Reach Christina Kauffman at