AARP NC applauds new federal law to reduce sticker shock from hospital bills

AARP North Carolina applauds Congress and the President for their approval of the NOTICE Act, a federal law the President signed yesterday to take effect in August of 2016. Short for “Notice of Observation Treatment and Implication for Care Eligibility,” AARP pushed to 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 of that decision.

Observation care is a classification Medicare uses when patients are not well enough to go home but not sick enough to be admitted.

What may seem like a small administrative step is a giant leap forward for patients and families forced to manage high out-of-pocket health care costs,” said AARP North Carolina Director Doug Dickerson. “Observation care hurts patients in the wallet. When a patient is in a hospital bed under observation status most would assume they are receiving ‘hospital’ care. But when it comes to paying for that care, status is a big distinction.”

Dickerson said the NOTICE Act will help patients and caregivers better manage health care costs by taking the sticker shock and surprise out of hospital billing. “Observation care hurts seniors: It prevents Medicare’s more comprehensive hospitalization coverage from taking effect, and it could disqualify a patient from receiving Medicare’s limited nursing home benefit if their care requires some time in a nursing facility.”

According to the Centers for Medicare and Medicaid Services (CMS), to qualify for Medicare’s nursing home coverage, beneficiaries must first spend three consecutive midnights as an admitted patient in a hospital, and observation days don’t count. Without Medicare coverage, patients could pay thousands of dollars for the nursing home care doctors order.

Added expenses for the patient do not end there. Because observation care is provided on an outpatient basis, patients frequently have co-payments for doctors’ fees and each hospital service. While at the hospital, patients also have to pay whatever the hospital charges for any routine drugs they take at home to manage chronic conditions such as diabetes or high cholesterol.

AARP continues to push for other changes to the Medicare program that will both

improve health care quality, and will help Medicare cut costs so the program remains strong for future beneficiaries. Click here to learn more about AARP’s commonsense solutions for Medicare.