NOTICE Act Requires Medicare Beneficiaries to Be Informed of Hospital Status

Congress has passed and President Barack Obama has signed the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act (H.R. 876). The new law, which will take effect next year, will require hospitals to notify Medicare beneficiaries of their outpatient status within 36 hours of service inception or at discharge (if sooner). Outpatient status affects a patient’s ability to receive Medicare coverage for post-acute care in a skilled nursing center.

“This is an important step forward,” said AHCA/NCAL Senior Vice President of Government Relations Clifton J. Porter II. “This legislation . . . means millions of individuals who leave a hospital, preparing for a short stay in a skilled nursing center, will now know what their hospital status is, which could save them thousands of dollars in out-of-pocket costs.”

The U.S. House of Representatives unanimously passed the bill in March; the Senate approved it in July.  

The Virginia General Assembly passed a related measure earlier this year requiring hospitals to provide oral and written notice within 24 hours of service inception to any patient placed in observation or outpatient status if (i) the patient receives on-site services from the hospital and (ii) such on-site services include a hospital bed and meals that are provided in an area of the hospital other than the emergency department.  The Virginia statute, which took effect on July 1, 2015, adds that the notification statement must detail that the observation status may impact Medicare, Medicaid, and other insurance coverage for medications, supplies, and coverage of a nursing home stay.