New law signed by President Obama will require hospitals to provide Observation Status notice to patients:

When an individual goes to the hospital, they may not be admitted right away.  If one is not “admitted” to the hospital, Medicare will not pay for hospitalization and a patient may have a large medical bill as a result.  There may be a period in which an individual is being “assessed”.  This is called “Observation Status”.   Observation status ends once a patient is admitted or discharged.

After a three (3) night hospital stay, Medicare will cover rehabilitation.  Previously, patients are not aware of the difference between observation status and being admitted.  The new law known as Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act signed by President Obama will take effect one year from August 6, 2015, the date it was signed.  Hospitals have to develop a notification system within this year.

The new law will require the hospitals to give notice to the patients who have been under observation status for more than 24 hours of their outpatient status within 36 hours or upon discharge, whichever happens sooner.  The notice must advise the patient of their outpatient status and advise that their stay does not qualify for rehabilitation services covered by Medicare because they did not meet the three (3) night requirement.

This is one step closer to ensuring hospital patients are properly being informed.