Appeals Court Temporarily Pauses Implementation of Observation Status Decision While Considering Government’s Request for a Stay

In March 2020, a nationwide class of hospitalized Medicare beneficiaries who were reclassified from inpatients to “outpatients,” receiving “observation services,” won the right to appeal their designation, which can have severe ramifications for beneficiaries’ care and costs. The plaintiffs are represented by the Center for Medicare Advocacy, Justice in Aging, and Wilson Sonsini Goodrich & Rosati (pro bono). The trial court ordered the government to implement Medicare appeal procedures for class members. The federal government appealed the trial decision in May 2020, and, more recently, requested that implementation of the decision be “stayed” – or paused – pending the outcome of its appeal.

On July 16, 2021, the Second Circuit Court of Appeals granted a “temporary stay” while it refers the government’s motion for a stay to the panel of judges that previously considered the case. The panel may decide to continue the stay, or may decide that a stay is not warranted, and that implementation must resume. Meanwhile the government’s appeal of the trial decision remains pending. The Center and co-counsel continue to oppose the government’s request for a stay and to oppose the government’s appeal. See the Center’s FAQ for further information about the case.