CA bill would force hospitals to notify patients about costs of 'observation' status

State lawmakers are considering a bill that would require hospitals to notify patients about the possible costs involved with being placed in "observation" units rather than being admitted.

The legislation would go further than a similar federal law that just took effect. The federal law will require hospitals to notify all Medicare patients about their status in observation units. The California bill would apply to all patients, not just those on Medicare.

SB 1076, carried by Sen. Ed Hernandez (D-West Covina), is based on the idea that patients in observation units frequently are unaware that they have not been admitted to the hospital and that their stay is getting billed at a far more costly outpatient rate, says Stephanie Roberson of the California Nurses Association.   

It’s an increasingly common practice that sometimes leaves unwitting patients with sticker shock when they receive their bill. And for unsuspecting Medicare patients, it can leave them without coverage for skilled nursing care they may need after discharge. Medicare only reimburses for that type of care after a person spends three days as a hospital inpatient.

The new federal law will give hospitals 36 hours to inform Medicare patients who have been held in observation units for more than 24 hours of their observation status and what it means in terms of their out-of-pocket costs, including how it could affect their post-discharge coverage.  
 
Hernandez' measure, which is sponsored by the California Nurses Association, would require hospitals to provide notice "as soon as practicable," according to the language in the bill. 

The measure would also require hospital's observation units to have the same nurse-to-patient ratios as their emergency rooms. 

The California Hospital Association is neutral on the measure, according to spokeswoman  Jan Emerson-Shea. 
 
The legislation has passed the state Senate and is scheduled to go before the Assembly by the end of the month.