CMS Issues Final Inpatient Payment Rule; Delays Implementation of Medicare Observation Notification Requirements

August 4, 2016

As part of its inpatient final rule released yesterday, the Centers for Medicare and Medicaid Services (CMS) is delaying the implementation of the Medicare Outpatient Observation Notification requirements originally scheduled to go into effect August 6, 2016.   Hospitals were awaiting the final CMS rule before implementing the new requirement.  CMS posted the final notice form and related materials on August 1 and will receive comments for a thirty day period as part of the public records act process.  Following the completion of the process, CMS will announce the specific implementation date for hospitals on the CMS Beneficiary Notices Initiative Web site.  The American Hospital Association estimates an implementation date will likely be about four months from now. WSHA will provide a bulletin outlining the requirements, as well as a webinar to allow hospitals to share best practices for implementation.

In the next few weeks, WSHA will also be providing a full analysis of the financial aspects of the inpatient payment final rule and hospital-specific reports of the estimated financial impacts to member hospitals. (Andrew Busz,


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