NOTICE Act confusion continued into the summer

Learning objective

At the completion of this educational activity, the learner will be able to:

• Identify challenges related to the lack of information about the Medicare Outpatient Observation Notice and the Notice of Observation Treatment and Implication for Care Eligibility Act.

Hospitals were struggling this summer to comply with the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act, which was signed by President Barack Obama August 6, requiring hospitals to provide a verbal and written notice of outpatient status to any patient in observation who has been in the hospital for more than 24 hours.

With only a preliminary form on the PRA website to guide them (http://ow.ly/7TPE302eSiM), many organizations were finding more questions than answers in their quest to comply with the regulation.

"[The preliminary form] does not have an Office of Management and Budget approval number, so it is not finalized," says Ronald Hirsch, MD, FACP, CHCQM, vice president of the Regulations and Education Group at Accretive Health in Chicago. "And there are several comments that it is not written to the federal standard for understanding by someone with limited education, so it may not even be approved in its present form. CMS has also said they will give further guidance on the requirement for verbal explanation so it is hard to know who will be allowed to present and explain the form."

In July, Janet Blondo, MSW, LCSW-C, LICSW, CMAC, ACM, CCM, C-ASWCM, ACSW, the manager of case management at Washington Adventist Hospital in Takoma Park, Maryland, was still looking to have a number of questions about the rule answered.

"I contacted the Maryland Hospital Association who researched this issue," she says. "The staff at MHA are conferring with experts at the Maryland Department of Health and Mental Hygiene about my questions and concerns and expect to have a response soon."

This lingering uncertainty not only was making it difficult for hospitals to start planning for compliance, but also led some to speculate that the compliance date would be extended.

The Ohio Hospital Association (OHA) in June told its members that the requirement date could be pushed back until October.

"The implementation of the Medicare Outpatient Observation Notice, or MOON, was set for August 6, 2016. However, as hospitals await the details of the federal fiscal year 2017 inpatient prospective payment system final rule, CMS is now stating that the MOON requirement date may be pushed back to October. Stay tuned for a final decision on the MOON implementation date," the OHA stated in a written release (http://ow.ly/z0qZ302fmvH). But as of mid-summer this talk still amounted to unsubstantiated rumors, says Hirsch.

"Unless someone knows someone at CMS, there is no official word. I did read many of the comments to the rule and many asked for a six-month delay. My guess is that they cannot delay the implementation since it is a law but they will delay enforcement for three months," he says.

In the meantime, organizations were trying to do what they could to get ready.

The NOTICE Act stipulates hospitals must inform patients within 36 hours from the start of the service, or at the time of discharge, about their status.

The goal of the legislation is to ensure patients are aware of their status and what it might mean for them financially?in particular, how it might affect their post-acute care options.

Patients often (wrongly) assume that if they’re in a hospital bed, they are an inpatient.

They also don’t understand the implications of outpatient billing status.

One of the biggest issues that can crop up when a patient’s care orders place him or her on observation status is that he or she will not be eligible for Medicare coverage for a post-acute stay in a skilled nursing facility (SNF), and instead may need to pay more out of pocket. Medicare currently only covers SNF extended care rehabilitation services for patients who have three consecutive inpatient days in a hospital. For example, one day in observation and two days as inpatient equals three days in the hospital, but does not meet the three-day inpatient day stay requirement because it only includes two inpatient days.

"An Office of Inspector General report found that the average out-of-pocket cost for SNF services not covered by Medicare was more than $ 10,000 per beneficiary," states a press release issued by the congressional leaders who promoted the bill (http://ow.ly/S6JSB).

To comply with the rule, hospitals will now need to designate someone?in some cases it may be the case manager?to provide this notification.

Stefani Daniels, RN, MSNA, ACM, CMAC, founder and managing partner of Phoenix Medical Management, Inc., in Pompano Beach, Florida, says a few of her clients were trying to get the form included in a packet of admission papers that are given to each Medicare patient to sign.

But even so, as of press time most organizations had more questions than answers about compliance. Stay tuned for updates in future issues of CMM.

HCPro.com – Case Management Monthly