Skip Ribbon Commands
Skip to main content

 Important Resources


 Residents and Families


​Has your loved one been impacted by observation stays?

Share your story with us. Please be sure to fill out the release form.


 AHCA/NCAL Members


​Have observation stays impacted your residents and patients?

Contact Us and help us close this observation stay loophole.

Please be sure to fill out the release form.



 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.

The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) is concerned that Medicare beneficiaries’ access to skilled nursing care is being constrained by the increased use of observation stays, which prevents patients from reaching the three-day stay threshold for Medicare coverage.

Senators Sherrod Brown (D-OH), Susan Collins (R-ME), Bill Nelson (D-FL), Shelley Moore Capito (R-WV) and Representatives Joe Courtney (D-CT-2) and Joe Heck (R-NV-3) share our concern and have introduced the  Improving Access to Medicare Coverage Act of 2015 (S. 843/H.R. 1571) to address these situations. The Improving Access to Medicare Coverage Act of 2015 would deem an individual receiving outpatient's observation services in a hospital to be an in-patient with respect to the Medicare three-day stay requirement.

Learn more about observation staysand the impact​ on Medicare beneficiaries.

Medicare Outpatient Observation Notice (MOON) Implementation Manual Instructions Now Available
Dana Halvorson

According to a February 10, 2017, email from the Centers for Medicare & Medicaid Services (CMS), manual instructions regarding implementation of the Medicare Outpatient Observation Notice (MOON) are now available on the CMS website. The new manual instructions provide more specific detail on notice delivery and are available online.  

CMS released the MOON, along with its form instructions, December 2016. The MOON is a standardized notice to inform beneficiaries (including Medicare health plan enrollees) that they are an outpatient receiving observation services and are not an inpatient of the hospital or critical access hospital (CAH). Outpatient status affects a patient’s ability to receive Medicare coverage for post-acute care in a skilled nursing center. The MOON is mandated by the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act) enacted on August 6, 2015. AHCA/NCAL supports the NOTICE Act law. The NOTICE Act requires all hospitals and CAHs to provide written and oral notification under specified guidelines. Hospitals and CAHs must begin using the MOON no later than March 8, 2017. 

For questions concerning the MOON, please send an email to:

Federal Judge Allows Medicare Observation Status Appeal Rights Case to Proceed
Dana Halvorson

According to a February 9, 2017, Center for Medicare Advocacy, Inc., email notification, “In a decision released on February 8, 2017, a federal judge allowed Medicare hospital patients seeking a right to appeal their placement on ‘outpatient observation status’ to proceed with their lawsuit. The Barrows case, now called Alexander v. Cochran, is a proposed nationwide class action brought by individuals who were forced to pay up to $30,000 for post-hospital skilled nursing facility care because they had been classified as outpatients in observation status during their hospitalizations.” The notification also included that, “The court addressed whether Medicare beneficiaries have a constitutionally protected interest in coverage of their hospitalizations as inpatients rather than as observation ‘outpatients.’ If such an interest exists, beneficiaries could appeal their observation status through Medicare’s administrative review process, which they are presently not allowed to do.” In addition to attorneys from the Center for Medicare Advocacy, the plaintiffs are represented by attorneys from Justice in Aging and the law firm of Wilson Sonsini Goodrich & Rosati. The court ordered the parties to confer and submit a schedule for further proceedings by February 22, 2017.

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.

Senate Finance Committee Tom Price Nomination Hearing and Observation Stays Issue
Dana Halvorson 

Carlos Barria | Reuters image
On Tuesday, January 24, the Senate Finance Committee held a hearing to consider the nomination of the Honorable Thomas Price to be the U.S. Secretary of Health and Human Services. U.S. Senator Sherrod Brown (D-OH), a member of the Finance Committee, submitted a question for the hearing record on the observation stays issue that AHCA/NCAL has been focused on. Specifically, the Senator noted that he had heard from too many Ohioans whose skilled nursing facility (SNF) care was not fully covered by Medicare because their hospital stays were classified as “observation” rather than inpatient. Senator Brown has introduced in the past the Improving Access to Medicare Coverage Act, which he plans to reintroduce this Congress, that would enable the time beneficiaries spend in the hospital under observation to count toward the three-day requirement for Medicare coverage.

AHCA/NCAL is in full support of the legislation, and is part of a large Coalition of national provider and beneficiary organizations advocating for its passage. The Senator asked in the hearing record that if Price is confirmed, if he will work to administratively correct this issue impacting Medicare beneficiaries. If Price is unable to address the issue administratively, that Price work with Senator Brown to pass the legislation.

Price responded to Brown's question in the hearing record with the following answer. “If confirmed, I will be pleased to work with you to further consider the necessity of the three day rule and its pros and cons. I will endeavor to work with CMS to identify what more can be done with regard to the observation status issue as well. And if the best path forward involves legislation, I would be pleased to work with you on that as well.”

AHCA/NCAL has been closely following issues relating to observation stays and the 3-day stay requirement, and their impact on Medicare SNF coverage. Please visit the AHCA/NCAL website to learn more.