Contact Us Online

Social Media Karp Law Blog Twitter Facebook

Medicare patients must be notified of observation status

08-20-2015 - Medicare will pay for up to 20 days of skilled nursing care only if it follows a three-day qualifying hospital stay. But any day in the hospital classified as "observation status" does not count toward the three-day requirement. Without meeting the requirement, you are responsible for the cost of any skilled nursing care you may require post discharge. You may also incur co-payments for doctors' fees and other hospital services. 

In the past, many Medicare beneficiaries did not even know they had been admitted under observation status until after they were discharged, when the bills began arriving. But that's about to change: Under a new law, the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE), hospitals must alert Medicare beneficiaries who are admitted under observation status for more than 24 hours, within 36 hours of admission, or upon discharge if it occurs sooner. The hospital must also explain the financial implications. The law will take effect August 2, 2016.

The new law does NOT change the three-day qualifying stay rule. Nor does it allow a day spent as an observation patient to count toward a qualifying stay. All it does is ensure that the hospital inform you if you are not considered an inpatient. Armed with that information, you can try to convince your doctor to reclassify your stay, but, even if you are successful, the status change will only apply to future days of your stay, not to days you've already spent in the hospital. You can also appeal after discharge.

Read the text of the NOTICE Act here.

Back to Elder Law Legal Updates