As the result of a court case, the Medicare.gov website now alerts a nationwide class of Medicare beneficiaries that they “have appeal rights” when a hospital changes their status from inpatient to outpatient observation, and that the appeal process is currently under development. View the information here (click on “Appeals in Original Medicare” and scroll to “Coming Soon: Appeal when a hospital changes your status from an inpatient to an outpatient with observation services.”).
The “observation” designation can have severe ramifications for beneficiaries. Many will face no coverage for post-hospital nursing home care, which requires a prior “inpatient” hospitalization of at least three days. Time spent in observation status does not count towards the required inpatient stay, even though observation stays can last several days and the care can be indistinguishable from inpatient care.
The Center for Medicare Advocacy, Justice in Aging, and Wilson Sonsini Goodrich & Rosati represent a class of Medicare beneficiaries who were not permitted to appeal the issue of whether their hospitalizations should be covered as inpatient services or outpatient observation services. Many class members had to pay thousands of dollars for medically necessary nursing home care, or forgo that care altogether, because they were labeled as “observation status” and not permitted to appeal for inpatient coverage. In 2020, a federal court held that as a matter of due process, Medicare must provide appeal procedures for such patients. The ruling was affirmed in January 2022.
As of July 26, 2022, the Medicare website contains general information about the court decision and who will be eligible to appeal. It explains that the court-ordered appeal process is still under development and not currently available. It also states that appeals can be filed once the process is set up, and more information will be posted on Medicare.gov when it is available. Class counsel is continuing to advocate for implementation as soon as possible.
For more information about the court decision, please see the Center’s Frequently Asked Questions.
July 28, 2022 – A. Bers