On July 27, 2015, the Senate approved by unanimous consent the Notice of Observation, Treatment and Implication for Care Eligibility (NOTICE) Act, H.R. 876.  The NOTICE Act, if signed by President Obama, would amend title XVIII of the Social Security Act to require hospitals to provide specific notice to patients who receive outpatient observational services for more than 24 hours.  The notice must include (1) the reasons for receiving outpatient observational services and not inpatient services, and (2) the implication of such status on services furnished by the hospital. Such implications include (1) Medicare cost-sharing requirements for outpatient observational services, and (2) subsequent coverage eligibility for services furnished by a skilled nursing facility.  (Time spent in observation status does not count toward Medicare’s minimum inpatient requirement for skilled nursing facility nursing home coverage.)  The Act requires hospitals to provide the notice in writing and generally to obtain the patient’s signature on the notice.

If enacted, hospitals must implement the Act’s requirements within 12 months of the enactment date.  A copy of the legislation is available here.

Reporter, Kristin Roshelli, Houston, +1 713 751 3263, kroshelli@kslaw.com.