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Court Denies All Government Motions in Class Action Seeking Appeal Right for Medicare Beneficiaries on “Observation Status” -
FOR IMMEDIATE RELEASE
March 28, 2019
In
a decision
issued on March 27, 2019, a federal judge denied multiple attempts by the
federal government to halt a lawsuit by Medicare patients seeking a right to
appeal their placement on “outpatient observation status” in hospitals.
Alexander v. Azar is a nationwide class action brought by individuals who
were forced to pay up to $30,000 for post-hospital skilled nursing facility
care because they had been classified as outpatients in observation status,
rather than as inpatients.
Although
care provided to patients on observation status is often indistinguishable
from inpatient care, it does not count toward the three-day inpatient
hospital stay requirement for Medicare coverage of nursing home care. This
leaves beneficiaries with the burden of paying for – or forgoing – extremely
costly nursing and rehabilitative care. The opportunity to appeal is critical
because of the severe ramifications that can result from the observation
status categorization. Class member Ervin Kanefsky of Pennsylvania, for
example, a 93-year-old World War II veteran, had to pay approximately $10,000
for nursing home care after being hospitalized for a shoulder fracture for
five days. He was initially admitted as an inpatient but later was told that
the “powers that be” had changed his status to observation before he was
discharged.
In
a 50-page opinion, the court addressed the government’s motion for summary
judgment, motion to “decertify” the class, and motion to dismiss the case.
Each motion was denied. Judge Michael P. Shea concluded that the evidence
plaintiffs submitted could reasonably establish that physician decisions
about whether to classify patients as inpatients are “meaningfully
constrained” by criteria set by Medicare. Class members may therefore possess
a “property interest” in the Medicare coverage they seek, a necessary
component of their constitutional due process claim. The court also concluded
that the plaintiffs continue to have standing to bring the case, and that
their claims are not moot. The court declined to take the drastic step of
decertifying the class, but did modify the class definition to target
individuals who have been harmed by observation status in specific ways, and
requested further briefing from the parties on that issue. In concluding his
opinion, Judge Shea emphasized that the action, now approaching its eighth
year, must proceed to trial without delay.
Plaintiffs’
lead attorney, Alice Bers of the Center for Medicare Advocacy, welcomed the
decision: “People who have paid into Medicare their whole lives, and who risk
having to pay thousands of dollars for necessary medical care, deserve a fair
process to determine whether they will receive Medicare coverage.” Co-counsel
Luke Liss of Wilson Sonsini Goodrich & Rosati, echoed Bers’s
observations: “We look forward to showing at trial that these vulnerable
patients have a right to appeal to Medicare as matter of constitutional due
process.” Co-counsel Regan Bailey of Justice in Aging added, “Hospitals
routinely appeal Medicare’s determination of whether a stay was inpatient or
observation status. Older adults and people with disabilities should have the
same right.”
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 |