If a Medicare beneficiary is discharged to a subacute skilled care facility after having been admitted to the hospital for three days or more, they can be eligible for up to 100 days of Medicare coverage (depending on medical need) for the treatment/skilled care received. Medicare covered 100% of the cost for the first twenty days and 80% of the cost for days 21-100. This period of time is referred to as “post hospital extended care services.”
Many patients in subacute facilities who started receiving post-hospital care often received no bill until weeks if not months after that care began. That’s when they first learned that they had not, in fact, been “admitted” to the hospital but rather, were merely in there as outpatients under “observation status.” Obvious financial problems arose for the patient due to the lack of coverage.
The federal NOTICE Act was enacted in January, 2017 as an amendment to the Social Security Act. It imposed new obligations on hospitals regarding patients who “receive observation services” for more than 24 hours. Within 36 hours of the start of those services, the hospital must provide a written Notice which uses “plain language and is made available in appropriate languages” which (a) advises that the patient wasn’t an inpatient, (b) gives the reason for classifying the patient as observation status, and (c) explains the ramifications of not being an inpatient, such as the obligation to pay for services. The hospital must also give the patient a spoken (oral) explanation of that Notice and must obtain a signature from the patient or the patient’s representative confirming receipt. If no signature is obtained, the hospital personnel who gave the Notice must certify that the Notice was given. CMS, the Centers for Medicare and Medicaid Services, issued a downloadable guidance on this topic.
CMS had waived the three-day admission rule during the Public Health Emergency that was declared at the start of the COVID-19 pandemic. However, the PHE is about to come to an end on May 11th, so patients and their trusted representatives/advocates need to be alert to the “observation status” problem.
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