Senators Collins, Welch Introduce Bipartisan Bill to Protect Seniors from High Cost of Post-Hospitalization Care

Bill would allow time spent under observation in the hospital to count toward the three-day stay required for Medicare coverage of post-hospitalization skilled nursing care.

WASHINGTON, D.C. - U.S. Senators Susan Collins and Peter Welch (D-VT) introduced bipartisan legislation to address a loophole in Medicare policy that can leave seniors facing high medical costs for skilled nursing care they need after hospitalization. The Improving Access to Medicare Coverage Act would 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.

"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."

"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."

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.

In Maine, some patients have faced staggering out-of-pocket costs because of this policy. In one case, a Maine Medicare beneficiary received necessary hospital care and was discharged to a skilled nursing facility, only to be left with a bill of more than $56,000 because her hospital stay was not classified as inpatient care.

Specifically, the bill would change this policy by:

1. 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
2. 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 (SHM), 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."

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