Critter Corner: What is the NOTICE Act?

Dear Baxter,

I read that the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act passed the US Senate earlier this week. Can you explain what observation care means, and what this new law would entail?


Inda Hospitalle


Dear Inda,

Observation care is a hospital classification used when patients are not well enough to go home but not sick enough to be admitted to the hospital. In many situations, if patients are being wheeled into a hospital bed and getting treatment, then they assume that they have been admitted, but this is not always the case. It’s a distinction that’s easy to miss until patients are hit with big medical bills after a short stay.  Also, a 3-day hospital admission is required for Medicare and private insurance to cover short-term rehab that might take place in a nursing home after discharge from the hospital.

The Senate approved legislation on Monday, July 27, 2015, requiring hospitals across the nation to tell Medicare patients when they receive observation care, but have not been admitted to the hospital. The law would require hospitals to provide written notification to patients 24 hours after receiving observation care, explaining that they have not been admitted to the hospital, the reasons why, and the potential financial implications.

A handful of states already require observation care notices, including New York, Connecticut, Maryland, Pennsylvania, and Virginia. In 2013, Medicare officials attempted to control the use of observation care by issuing the so-called “two-midnight rule,” which would require hospitals to admit patients who doctors expect to stay at least two midnights. But Congress delayed its enforcement after hospitals said the rule was confusing and arbitrary.
Since then, the federal government has been “pushing very hard” to encourage hospitals to educate patients about observation care. The NOTICE ACT is expected to be signed into a law by President Obama, and hospitals will have to comply with the NOTICE Act 12 months after it becomes law.

Hope this is helpful. You can read the text of the NOTICE Act here.

Doggy kisses,


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About Renee Eder

Renee Eder is the Director of Public Relations for the Farr Law Firm, and gives the voice to the Critters of Critter Corner. Renee’s poodle, Penny, is an official comfort dog who she and her children bring to visit with seniors who are in the early stages of dementia at a local senior home once a month.