Notice Act presented to President - written notice to be required for observation status of more than 24 hours

The Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act, introduced as H.R. 876 on February 11 of this year, made a quick run through the legislative process, having passed the House on March 16 after committee consideration and passing the Senate on July 27.  It is now waiting the President's signature. This action follows close on the heels of the CMS proposed changes to the two-midnight rule.

Becker's Hospital Review posted "9 things to know about the Notice Act on July 29".  Follow the link to the original article written by Erin Marshall.  The text follows:

1. The legislation calls for hospitals to provide written notice to patients who are in the hospital under observation status for more than 24 hours. Hospitals would need to provide notification no later than 36 hours after the time observation status begins.

2. The written notice must include why the patient was not admitted to the hospital and the financial implications of observation status, including subsequent eligibility for coverage for a skilled nursing facility.

3. Medicare does not cover skilled nursing facility stays unless the patient was admitted as an inpatient for a minimum of three nights. In some cases, physicians reclassify people as inpatients when more than observation is needed. Medicare patients who are not reclassified have to either forgo SNF care or pay for it themselves, regardless of the length of their hospitalization.

4. Medicare Part A pays for inpatient stays. If you are hospitalized on observation status, payment by Medicare is under Part B, which covers physician and outpatient services. Patients without Part B coverage are often left with the bill for observation status, even though there was not a perceptible difference in the type or level of care they received in the hospital.

5. If the NOTICE Act is signed into law by President Obama, hospitals across the nation will have to comply within 12 months.

6. A number of states, including Connecticut, Maryland, New York, Pennsylvania and Virginia, already require hospitals to give patients notice about observation care.

7. There were an estimated 1.5 million observation stays among Medicare beneficiaries in 2012. The number of observation stays increased 100 percent from 2001 to 2009, likely because of financial pressure on hospitals to reduce potentially preventable readmissions of inpatients within 30 days.

8. Under the NOTICE Act, hospitals would be required to notify patients about observation status, but patients can only change that status by swaying a physician or the hospital to do so. Yale-New Haven (Conn.) Hospital CEO Marna Borgstrom noticed that after learning they were under observation care, many patients left the hospital against medical advice.

9. The NOTICE Act is separate from CMS' two-midnight rule, for which it recently proposed updates as part of the 2016 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System proposed payment rule.