A new Medicare law now requires hospitals to notify patients that they may incur huge out-of-pocket costs if they stay in the hospital more than 24 hours before being officially admitted.

Some hospitals have kept some patients in limbo — for “observation” without having them officially admitted. Sometimes, they are kept overnight for days without being admitted.

While under observation, patients can be liable for substantial hospital bills, and Medicare will not pay for subsequent nursing home care unless the patient has spent three days in the hospital while admitted.

The costs can be devastating, according to a story in the New York Times.

Now, notice must be provided to each patient who receives services under “observation.”

It is designed to inform Medicare beneficiaries of costs they might not otherwise be aware of.

Consumer advocates and nursing homes hailed the decision.

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