New NOTICE Act Requires Hospitals to Warn About Medicare Eligibility for Skilled Nursing Care

Congress passed the NOTICE Act, which becomes effective in October 2016, to require medical facilities such as hospitals to explain to its patients what type of care they have received and how that treatment affects their eligibility for skilled nursing facility care/nursing home coverage. Congress recognized the need for this notification as hospitals have increased the practice of holding patients on “observation” status—instead of admitting them on an inpatient basis—over the last several years. The Senate Report that preceded the legislation described how patients were sometimes surprised to learn that they were outpatients even though they “received treatment overnight in a hospital bed.”

What the required notice will explain, in addition to the patient’s status as an inpatient or outpatient, is that to be covered under Medicare for a stay in a skilled nursing facility, a patient must have first been admitted to the hospital and have spent three days as an inpatient (not counting the day of discharge), before going to a nursing home. (Note that this rule may not apply to those who have a Medicare Advantage plan; whether a nursing home stay is covered in this situation is up to the HMO or PPO that operates the Medicare Advantage plan.) In addition to explaining the patient’s status, the notice must give the reasons for such status—that is, why the patient was not admitted to the hospital. The NOTICE act applies only to those in the hospital on observation status or as an outpatient for at least 24 hours.

While the NOTICE Act makes this notice mandatory, it does not provide any form of relief or appeal if a hospital or other medical facility fails to give a patient the required notice about their eligibility for nursing home care.

In addition to getting a notice from the hospital, in some circumstances, a skilled nursing facility must give a prospective patient a Skilled Nursing Facility Advance Beneficiary Notice of Non-Coverage (SNFABN), warning that care may not be covered by Medicare.

Oct 01, 2016