Pennsylvania Governor Tom Corbett has signed into law a bill that requires hospitals to inform patients when their stay in a hospital has been classified as observation status and not an inpatient admission.
The new law calls for hospitals to provide such notification when patients are under a hospital’s care for more than 23 consecutive hours; when they are in a bed and receiving meals outside of the emergency room; and when they have not formally been admitted.
Observation status poses considerable financial challenges to patients, leaving them vulnerable for charges for tests, medicine, and post-discharge nursing and rehabilitation care that would be covered by their insurance if they were inpatients but are not covered to the same degree if their stay has been classified as observation status (because insurers pay lower outpatient rates only for observation services).  Most people have been unaware of this distinction and have neither been told of their observation status nor apprised of the difference between that status and inpatient hospitalization.  This has especially been a problem for Medicare beneficiaries.
The bill was sponsored by Pennsylvania state representative Stan Saylor (R-York County).  See Rep. Saylor’s memo to his House colleagues outlining the rationale for his bill here and find the bill itself here.