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 Important Resources


 Residents and Families


​Has your loved one been impacted by observation stays?

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 AHCA/NCAL Members


​Have observation stays impacted your residents and patients?

Contact Us and help us close this observation stay loophole.

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 Press Releases


Skilled nursing care centers serve our most vulnerable citizens – frail elders and those with disabilities who need complex medical, rehabilitative, and restorative care, 24 hours a day, 7 days a week. But under the current Medicare law, thousands are not receiving critical nursing care and getting stuck with high medical bills after leaving the hospital.  

Hospital patients must be classified as an inpatient for at least three consecutive days in order for Medicare to pay for rehabilitation care in a skilled nursing care center. However, hospitals are increasingly holding patients under “observation,” an outpatient designation, rather than admitting them as inpatients. As a result, outpatients who need follow-up care do not qualify for Medicare coverage in a nursing center, leaving those in need of critical care on their own or in debt with thousands in out-of-pocket costs.

The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) continues to keep the observation stays issue one of its top advocacy priorities and supports legislation that will fix this confusing policy.

Learn more about the observation issue here and the impact on Medicare beneficiaries here and here.

New Federal Law, Hospitals Now Must Tell Medicare Patients When Care Is ‘Observation’ Only
Dana Halvorson

According to a March 13, 2017, article from Kaiser Health News, written by Susan Jaffe, “hospitals across the country must now alert Medicare patients when they are getting observation care and why they were not admitted — even if they stay in the hospital a few nights. For years, seniors often found out only when they got surprise bills for the services Medicare doesn’t cover for observation patients, including some drugs and expensive nursing home care. The notice may cushion the shock but probably not settle the issue.” You can read the full article here.

As you may know, the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act) was enacted on August 6, 2015. The NOTICE Act requires all hospitals and critical access hospitals to provide written and oral notification under specified guidelines to beneficiaries that they are an outpatient receiving observation services and are not an inpatient by no later than March 8, 2017. AHCA/NCAL believes the NOTICE Act law is an important step forward. To learn more about the NOTICE Act and the observation stays issue, please visit the AHCA/NCAL website.

3-Day Stay Requirement and CMS Proposed Rule for SNF PPS FY 2018 Update
James Michel and Dana Halvorson

On April 27, 2017, the Centers for Medicare & Medicaid Services (CMS) issued the proposed rule for the skilled nursing facility (SNF) prospective payment system (PPS) fiscal year (FY) 2018 update.  It proposes an increase in federal payments to skilled nursing facilities for 2018. Starting on October 1, 2017, skilled nursing providers will receive a 1.0 percent increase in payments.  It is the highest amount providers could receive under current law.

AHCA hosted a webinar discussing the proposed rule in greater detail.  With your ahcancalED log in, you are able to hear the recording of this update online.  Also included in the proposed rule is a section on Medicare innovation, and CMS specifically invites the SNF profession to bring ideas to the Center for Medicare and Medicaid Innovation (CMMI) to be tested under the Innovation Center’s demonstration authority. In the proposal, CMS suggests the 3-day stay requirement as a possibility for a demonstration as well as payment ideas.

AHCA has also created a summary document with highlights and a preliminary overview of the payment updates, the SNF value-based purchasing program proposed new components, quality additions, and the advanced notice of proposed rulemaking. Registration for ahcancalED is for AHCA/NCAL members.  To access the webinar recording, use your achancalED account log in.  If you do not have an account yet, you can set one up by clicking Log In button and follow the prompts to create an account under the Sign In button.

AHCA/NCAL Observation Stays Hill Issue Brief Available
Dana Halvorson

Last month, the American Health Care Association and National Center for Assisted Living (AHCA/NCAL) commended several members of Congress for reintroducing the Improving Access to Medicare Coverage Act of 2017 (S. 568/H.R. 1421). Introduced on March 8, 2017 by Congressmen Joe Courtney (D-CT) and Glenn “GT” Thompson (R-PA), and Senators Sherrod Brown (D-OH), Susan Collins (R-ME), Bill Nelson (D-FL) and Shelley Moore Capito (R-WV), the legislation ensures that time spent under “observation status” in a hospital counts toward satisfying the three-day inpatient hospital requirement for coverage of skilled nursing care services under Medicare. The Observation Stays Coalition, which consists of over 30 organizations including AHCA/NCAL, fully supports this legislation. The AHCA/NCAL issue brief  is for your use when reaching out to your members of Congress.

AHCA/NCAL continues to keep the observation stays issue one of its top advocacy and outreach priorities. Increasingly, patients have no idea what their status is in a hospital, or the importance of it, which can lead to thousands of dollars in out-of-pocket medical expenses should they need skilled nursing center care following their hospital stay. In addition to placing a financial burden on seniors and their families, this anomaly in Medicare rules can cause unnecessary spend-down, accelerating the time frame in which seniors will have to turn to programs such as Medicaid to pay for their care. For more information about the observation stays issue, please visit the AHCA/NCAL website.