Hospitals Must Keep Patients Informed About Observation Status

I’ve written before about making sure you have been “admitted” when you have been in the hospital for a night or two. Medicare recipients who have been evaluated in the hospital, received care and perhaps even stayed overnight may have been classified as “observation status,” which is an outpatient category.  This means that their care is covered by Medicare Part B, rather than Part A, which includes much more comprehensive coverage for hospital stays.  This can also affect whether Medicare will cover the cost of skilled nursing care following that stay in the hospital.

Historically, patients have no idea how they have been coded until they are being discharged, or sometimes not until they receive significant bills after returning home.

To begin to address this issue, Congress passed the Notice of Observation Treatment and Implication for Care Eligibility (“NOTICE”) Act, which now requires hospitals to give patients both oral and written notice when they have not been admitted, but are receiving treatment as outpatients.   They must use the written notice that was created by CMS called the Medicare Outpatient Observation Notice (“MOON”).  The MOON requires the signture of the patient or the patient’s authorized representative, which means that any oral notice would only be preliminary.

Receipt of this notice gives the patient, and her physician, the opportunity to advocate that the patient’s condition is such that she should be admitted, so that she can benefit from full Medicare Part A coverage for her care.

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