Does Medicare NOTICE Bill Miss the Point?


On Monday two U.S. Congressmen introduced the NOTICE Act (for Notice of Observation Treatment & Implication for Care Eligibility and reminding us how hard it can be to come up with a catchy acronym).

The bill would require hospitals to give meaningful notice to patients who have been assigned “observation” status for over 24 hours. Observation status is different from inpatient status under the rules of Medicare and other insurers, and the difference can have real financial implications for a patient. For one thing, the patient’s personal responsibility through copayments or deductibles is usually much greater with observation status. And Medicare covers follow-up nursing home care after an inpatient visit but not an observation visit.

The sponsors note that many patients, having been in the hospital overnight, assume they’re inpatients and are surprised—even shocked—when they get their bills. That’s certainly true.

The sponsors go on to say the bill will give patients an opportunity to argue for a change to inpatient status before discharge. That’s true, too—as far as it goes. Patients would have a chance to argue for inpatient status. But is that really meaningful? Hospitals don’t have discretion in assigning inpatient or observation status. If they did, they’d choose inpatient every time, because it’s financially advantageous to them.

Hospitals also know all about the patient’s financial stake in the decision, and they don’t want an unhappy patient on their hands. They also know that collecting from Medicare or other insurers is a lot easier than collecting from a patient. So they’d love to help. Trouble is, they can’t.

So the practical effect of the bill may be limited to making sure that the patient gets the bad news sooner rather than later.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Faegre Baker Daniels | Attorney Advertising

Written by:


Faegre Baker Daniels on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.