New Virginia law requires hospitals to inform patients of observation status

A new Virginia law that takes effect today will require hospitals to inform patients of their admission status verbally and in writing.

The Virginia General Assembly passed the law in February, seeking to clarify confusion about outpatient status, according to the Washington Business Journal. Patients admitted "under observation" often face major financial hurdles, with Medicare denying them coverage for follow-up nursing facility care.  Although the outpatient-status debate is a particular concern for Medicare patients, the law will affect all patients, according to the Daily Press.

Admissions for observation and length of observation stays have both increased in the last five years, due to factors such as evolving practice patterns and shifts in Medicare reimbursement policies, FierceHealthcare previously reported. A study this April from the American Association of Retired Persons found the complexity of observation-status rules complicates patient care. Nearly 1 in 3 observation-status patients admitted to nursing homes opted out, with cost concerns the likely reason.

Under the new law, hospitals in Virginia must ask patients to sign a form indicating they understand their outpatient status and its potential ramifications for coverage, according to the Business Journal. It gives patients 24 hours after the hospital determines observation status to sign the letter of acknowledgment, the Daily Press reported, echoing similar laws already in place in New York and Maryland. Since it was introduced in the 1980s, the definition of observation status has changed repeatedly based on Medicare definitions of medical necessity.

"There's been a lack of clarity at the federal level regarding Medicare observation requirements. This is meant to present some clarity for both providers and patients," Julian Walker, spokesman for the Virginia Hospital & Healthcare Association, told the Daily Press.

To learn more:
- here's the Business Journal article
- read the Daily Press article