Notice of Observation Status

Hospitals have until August 2016 to comply with a newly enacted law called The Notice Act.  The Notice Act requires hospitals to notify Medicare patients when they are no longer in an inpatient stay, but are, instead, undergoing outpatient observation.


Hospitals will be required to formally, in a written notice, inform patients who are being observed, but not officially admitted for more than 24 hours.  The notice will instruct patients that their stay is considered outpatient.  Also the notice must state that the patient’s stay does not count towards the required, three-day hospital stay for Medicare coverage in a skilled nursing facility (SNF).


Home health agencies will benefit, as hospitals will be required to pass this information  along when referring to an agency.  This will make admitting patients to home health easier by avoiding the wrestle between Resumption of Care (ROC) and Transfer OASIS.  Neither of those will be needed when a patient experiences an outpatient observation stay.  Agencies, however, can perform a SCIC (Significant Change in Condition) if necessary.