Today, Congressman Lloyd Doggett (D-TX) and Congressman Todd Young (R-IN) introduced the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act of 2014. The NOTICE Act is a bipartisan bill that requires hospitals to provide meaningful written and oral notification to patients who are in the hospital “under observation” for more than 24 hours. Providing this notice can make a difference in out-of-pocket costs to a Medicare patient of $10,000, $100,000 or even more.

The NOTICE Act will provide important protection for Medicare beneficiaries.  Currently, a hospital may either admit a patient as an “inpatient” or keep the patient “under observation.”  While the distinction is often impossible to determine, particularly by the beneficiary, the economic implications can be extreme if the patient later requires care in a skilled nursing facility.  Medicare would pay for skilled nursing care for a beneficiary who is in the hospital for more than three days as an “inpatient,” but does not pay if the beneficiary was in the hospital for the same length of time “under observation.”  The NOTICE Act would alert the beneficiary or person acting on her behalf of  her admission status and the financial implications of that classification on eligibility and cost-sharing so she can advocate on her own behalf while in the hospital. The bill is endorsed by AARP, The Alliance for Retired Americans, Center for Medicare Advocacy, National Association of Professional Geriatric Care Managers, LeadingAge,  American Health Care Association, and National Committee to Preserve Social Security and Medicare.

“The NOTICE Act does just what its name suggests: it gives Medicare patients notice of the costs, potentially hundreds of thousands of dollars, that their hospital stay could incur,” said Rep. Lloyd Doggett. “Hospitals may act in the best interest of a patient’s health but not always in the best interest of a patient’s wallet. This bipartisan bill arms patients with the knowledge they need to be their own best advocates, and prevent costly surprises if they need skilled nursing services.”

“When seniors require a hospital stay, they are rightfully more concerned with their recovery than with understanding how the hospital classifies their status as a patient,” said Rep. Todd Young. “But when that classification can impact future coverage of health care services related to their recovery, they deserve to be made aware of the potential ramifications.  I appreciate Rep. Doggett’s leadership on this issue, because no one should be caught off guard by a large medical bill just because they weren’t aware of status codes and billing procedures.”

“The Center for Medicare Advocacy, which has been on the front lines for years against the abuse of observation status, enthusiastically supports the NOTICE Act as a critical step in leveling the playing field for Medicare beneficiaries who are in the hospital receiving the same care as an inpatient but are considered outpatients,” said Toby S. Edelman, Senior Policy Attorney with the Center for Medicare Advocacy.  “We’ve spoken to hundreds, perhaps thousands, of patients and their families about their hospital stays.  Invariably they are unaware they are considered outpatients and that that status will deny them follow-up coverage in a nursing home.  Armed with accurate and timely information, they can try to get their status changed to inpatient before discharge.  This is a first step but an important one in ending this unjust treatment of vulnerable elderly and disabled people, and the Center strongly supports both the NOTICE Act and the Improving Access to Medicare Coverage Act.”

This legislation will make a difference to many Americans.  One example is a woman in Indiana who suffered a stroke and was transported to the emergency room for care, with a longer stay in the hospital for recovery. After a 4-day hospital stay, she was in skilled nursing care for 22 days, and incurred a cost close to $10,000, because she was “under observation” instead of as an “inpatient” in the hospital. This woman, like so many others, deserved proper notice that her care would incur much larger costs than if she were classified as an “inpatient.” She and her family deserved a chance to consult her primary physician about whether she should have been classified as an inpatient, as later her primary physician later indicated. In a time of sickness and stress, families should focus on the recovery of their loved ones, instead of dealing with hidden costs due to lack of NOTICE.