Observation Status: Virginia Requires Hospitals to Notify Patients of their Observation Status

Effective July 1, 2015, Virginia has become the fifth state to enact legislation requiring hospitals to inform patients when they are in Observation or other outpatient status, and the consequences of not being admitted as inpatients.  Senate Bill 750[1] requires hospitals to provide oral and written notice to patients who are receiving “onsite services” (including “a hospital bed and meals”), but not in an emergency department.  The notice must be provided within 24 hours of a patient’s placement in observation or outpatient status and must inform the patient that outpatient status may affect his or her financial obligations, both to the hospital and for post-hospital care.

States with similar notice laws include Connecticut, Maryland, New York, and Pennsylvania.

Legislation pending in Congress, the Notice of Treatment and Implications for Care Eligibility (NOTICE) Act, H.R. 876 (Doggett, D, TX), would require hospitals to provide notice to patients of their outpatient status.  The bill passed the House of Representatives on February 26, 2015 by voice vote.[2]  On June 24, 2015, the Senate Finance Committee favorably reported out the companion Senate bill, S. 1349 (Cardin, D, MD).

Although the Center for Medicare Advocacy supports notice legislation, we see the legislation as insufficient, by itself, to solve the problem of observation status for hospitalized Medicare patients.[3]  The Center is part of an ad hoc coalition of national organizations supporting bipartisan legislation – the Improving Access to Medicare Coverage Act of 2015, H.R.1571 (Courtney, D, CT) and S.843 (Brown, D, OH) – to count all time in the hospital for purposes of satisfying Medicare’s requirement that patients be inpatients for three consecutive days in order to qualify for Medicare Part A-covered post-hospital care in a skilled nursing facility.[4]