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The Centers for Medicare & Medicaid Services (CMS) hosted a Tele Town Hall on December 21, 2015 to solicit comments on the Notice of Observation Treatment and Implications for Care Eligibility (NOTICE) Act, Public Law 114-42.  Beginning in August 2016, the NOTICE Act requires hospitals to inform patients who are hospitalized for more than 24 hours that they are outpatients, not inpatients.  Both oral and written notices are required.[1] 

CMS did not respond to comments during the call, which it described as an informal opportunity for public comment.  It will continue to accept written comments until January 4, 2016 at  At a later date, CMS intends to publish proposed rules on the NOTICE Act in the Federal Register, giving the public another opportunity to comment.

More than 50 people called in.  Multiple callers made recommendations including:

  • That CMS develop a template or standard form for hospitals’ voluntary use;
  • That all time in the hospital be counted for purposes of satisfying the statutory three-day inpatient stay requirement to qualify for Medicare Part A coverage of post-hospital care in a skilled nursing facility (SNF);
  • That CMS educate Medicare beneficiaries about what Observation Status means;
  • That patients be given appeal rights to contest Observation Status;
  • That the NOTICE requirements be clarified for states that have already implemented state laws requiring notice to hospitalized Observation Status patients;
  • That Observation Status be eliminated entirely – classify patients as inpatients if they are hospitalized overnight, and develop DRG codes for short inpatient stays.

A number of callers discussed patients’ confusion over Observation Status and high bills that patients unexpectedly find they have from their SNFs after being classified as Observation patients by their hospitals.  There was also considerable disagreement about whether patients in Observation Status currently have appeal rights, with some callers saying that Livanta offers appeals to patients and others saying there are no appeal rights.

[1] See Center, “Observation Status: The NOTICE Act Will Soon Be Law,” CMA Alert (Aug. 6, 2015),  For more information on observation status, see  



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