EDITOR’S NOTE: This article has been updated to clarify the timing of outpatient status notification.

Legislation that would change the appointment of “observation status” for hospital patients was passed by the Senate on Tuesday, and will now be sent to the president to be signed into law. The House passed its version of the bill in March.

The Notice of Observation, Treatment and Implication for Care Eligibility Act would require hospitals to notify Medicare beneficiaries of their outpatient status within 36 hours, or, if sooner, upon discharge. Time spent in outpatient observation status can affect patients’ eligibility in obtaining Medicare coverage for post-acute care.

The NOTICE Act’s unanimous, amendment-free passage by the Senate drew praise from the American Health Care Association and National Center for Assisted Living.

“This is an important step forward,” wrote AHCA/NCAL Senior Vice President of Government Relations Clifton J. Porter II in a statement issued Tuesday afternoon. “This legislation is now on its way to being signed into law. That means millions of individuals who leave a hospital, preparing for a short stay in a skilled nursing center, will now know what their hospital status is, which could save them thousands of dollars in out-of-pocket costs.”