Observation Status: Law Will Require Hospitals to Notify Patients

August 14, 2015 | Aging Services Risk Management


​President Obama has signed into law a bill that will require hospitals and critical access hospitals to notify Medicare beneficiaries, in writing and by oral explanation, of their outpatient observation status when they receive more than 24 hours of such services. The Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act would require the written notification to explain the patient's status as an outpatient rather than an inpatient, the reasons for the outpatient status designation, implications regarding the services provided (particularly cost sharing and eligibility for skilled nursing facility coverage under Medicare), and other relevant information. The notification must be written and formatted in plain language and available in appropriate languages. It must be signed by the patient or his or her representative (or hospital staff if the patient or representative refuses to sign).

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