Dive Brief:
- The NOTICE Act (Notice of Observation Treatment and Implication for Care Eligibility Act) was passed by the Senate in July 2015, and requires hospitals to inform Medicare patients when they're receiving observation care for more than 24 hours.
- This week, the American Hospital Association (AHA) sent a letter to Andy Slavitt, CMS acting administrator, suggesting hospitals be allowed a six-month implementation period after the final rule is issued.
- The AHA also suggested CMS should allow hospitals to use standard written notification and detail how the agency will enforce the measure as well as the penalties for noncompliance. The group also wanted clarification about whether the law will apply in states with similar existing laws (NY, CT, MD, PA, and VA).
Dive Insight:
As previously reported by Healthcare Dive, the law requires hospitals to inform Medicare patients in writing when they are under observation care for more than 24 hours but have not been admitted to a hospital. It also has to explain why and how that affects the patient financially. The issue came under scrutiny after the number of claims ballooned to 91% since 2006 and long observation stays up to 48 hours or longer increased by 450%.
Ashley Thompson, AHA senior vice president for public policy analysis wrote, "We believe that allowing hospitals a six-month implementation period after the final rule is issued would provide the time necessary to operationalize this new policy." In addition, the group said terminating a hospital's provider agreement in response to noncompliance with the act, "would be too egregious a penalty to impose. Instead, we encourage CMS to develop a graduated process that begins with notifying and educating the provider about the regulatory requirements. This would allow time for the hospital to develop and carry out a corrective action plan."
Observation care can create problems for patients in that it isn't reimbursed by Medicare's comprehensive hospitalization coverage and it can adversely affect their eligibility for Medicare's nursing home benefit if they require care after leaving the hospital.