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Federal Court Orders Appeal Rights on “Observation Status” Issue for Certain Medicare Hospital Patients -
FOR IMMEDIATE RELEASE
March 24, 2020
In
a decision issued today, Judge Michael P. Shea
of the U.S. District Court in Hartford, Connecticut found that certain Medicare
beneficiaries who are placed on “observation status” at hospitals, rather
than being admitted as “inpatients,” have the right to appeal to Medicare.
The
case, Alexander v. Azar,
is a nationwide class action case filed by the Center for Medicare Advocacy
that went to trial in August 2019. The ruling finds that as a matter of
constitutional due process, patients who are initially admitted as inpatients
by a physician, but whose status is later changed to observation by their
hospital, have the right to appeal to Medicare and argue for coverage as
hospital inpatients.
The
decision opens the door to medically necessary services in skilled nursing
facilities that Medicare beneficiaries might otherwise have to forgo because
they cannot afford to pay for it themselves. The distinction between being
labeled a hospital “inpatient” versus being placed on observation status is
important because Medicare only covers subsequent care in a skilled nursing
facility for patients who were hospitalized as inpatients for three or more consecutive
days. Patients in observation status are considered “outpatients” and thus
ineligible for coverage of very costly care at nursing facilities. This has
forced many Medicare beneficiaries to either pay thousands of dollars out of
pocket for that care or to forgo the needed care altogether. While people
with Medicare can appeal virtually any issue affecting their coverage, the
Centers for Medicare & Medicaid Service (CMS) has blocked attempts
by beneficiaries to appeal their hospital status.
“The
ruling acknowledges that Medicare patients are in a very vulnerable position
when they are hospitalized and particularly when they require care at a
skilled nursing facility after hospitalization,” said Alice Bers, Litigation
Director for the Center for Medicare Advocacy, which serves as lead counsel
for the class. “We are heartened that the court recognized that the ability
to appeal the observation status issue to Medicare is a question of
fundamental fairness. Medicare sets the rules that doctors and hospitals must
follow with regard to patient status. It is only just that Medicare patients
-- older adults and people with disabilities -- be able to appeal this issue
to Medicare.” In addition to the Center for Medicare Advocacy, the nationwide
class-action lawsuit was litigated by Justice in Aging and the law firm of
Wilson Sonsini Goodrich & Rosati. The Center for Medicare Advocacy is
particularly grateful for the pro
bono assistance provided by Wilson Sonsini Goodrich & Rosati.
For more information about observation status see the Center for Medicare
Advocacy’s website here.
The Center for Medicare Advocacy (http://www.medicareadvocacy.org), established in 1986, is a national
nonprofit, nonpartisan law organization that provides education, advocacy,
analysis and legal assistance to help older people and people with
disabilities obtain fair access to Medicare and quality health care. We focus
on the needs of Medicare beneficiaries, people with chronic conditions, and
those in need of long-term care. The organization is involved in writing,
education, and advocacy of importance to Medicare beneficiaries nationwide.
The Center is headquartered in Connecticut and Washington, DC, with offices
throughout the country.
Center for Medicare Advocacy, Inc. • www.MedicareAdvocacy.org •
PO Box 350, Willimantic, CT 06226 • 1025 CT Ave. NW, Washington, DC 20036 |
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