On March 16, 2015, the U.S. House of Representatives approved H.R. 876, the Notice of Observation Treatment and Implication for Care Eligibility Act.  The bill now goes to the U.S. Senate for consideration.

If enacted as passed by the House, the legislation would require hospitals to provide oral and written notification to Medicare patients who are classified for more than 24 hours as outpatients under observation status.  This notice would be required to explain:

  • (i) the status of the individual as an outpatient under observation status and not as an inpatient;
  • (ii) the reason for the placement of the patient in observation; and
  • (iii) the implications to the beneficiary of observation status on eligibility for Medicare coverage for items and services while in observation and after discharge to a skilled nursing facility or other provider and also the cost-sharing requirements while in observation and after discharge to another provider.

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