Notice of Observation Status Law Signed by President

Legislation requiring hospitals to notify Medicare beneficiaries when they are technically in an outpatient “observation” status was recently signed into law by President Obama.

The NOTICE ACT (Notice of Observation Treatment and Implication for Care Eligibility) requires hospitals to inform patients of their status when they are in observation, but not officially admitted, for more than 24 hours and classified as an outpatient. A written notice must, among other points, state that the beneficiary’s outpatient stay will not count toward the three-day inpatient stay required for the individual to be eligible for Medicare coverage of a stay a skilled-nursing facility. Hospitals will have until August 2016 to comply with the new law.

The NOTICE Act is good news for the home health agencies because tracking the status of the patient hospital stay proved to be a challenge. Patients were often unaware of whether their stay with the hospital was an inpatient admission or an observation stay leaving the HHA uncertain if Transfer/ROC OASIS were needed. Now with the implementation of this notice the HHA will be able to determine an observation stay and know that a Transfer/ROC OASIS is not needed. An Agency may choose to complete a “Significant Change in Condition” OASIS (Reason for Assessment, 5- Other follow-up) based on their agency policy.

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