Dive Brief:
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Both houses of Congress have now overwhelmingly approved legislation that would require U.S. hospitals to inform Medicare patients when they are under observation care but have not been admitted--a distinction with major financial implications.
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The NOTICE Act, which stands for “Notice of Observation Treatment and Implication for Care Eligibility,” now goes to President Barack Obama and is expected to be signed into law, sponsors say.
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The issue has come to the forefront as claims for observation care have skyrocketed in recent years. The total number of claims has increased 91% since 2006, and long observation stays of 48 hours or more have increased by 450%, according to a Kaiser Health News analysis.
Dive Insight:
The legislation would require hospitals to notify patients within 24 hours, in writing, that they are receiving observation care and to explain why and what that means financially. Hospitals would have to comply with the law 12 months after it is signed.
Observation care is designated when patients are deemed too unwell to go home but not qualified to be admitted. As noted by Kaiser Health News, it's problematic for patients for two reasons: it prevents Medicare’s more comprehensive hospitalization coverage from kicking in, and it impacts their eligibility to receive Medicare’s limited nursing home benefit if they require further care after leaving the hospital.
Several states already require notice of observation care, including New York, Connecticut, Maryland, Pennsylvania and Virginia.
Critics of the requirement say they are concerned that when patients learn they are receiving observation care, they may leave the hospital against medical advice. Marna Borgstrom, CEO of Yale-New Haven Hospital in Connecticut, reported to a Senate committee last year that she has seen this issue firsthand.
“I’m confident it would be an even greater number if more patients knew about the potential burden of being deemed an outpatient,” she said.