Monday, February 13, 2017

Federal Judge Allows Medicare Observation Status Appeal Rights Case to Proceed

Dana Halvorson

According to a February 9, 2017, Center for Medicare Advocacy, Inc., email notification, “In a decision released on February 8, 2017, a federal judge allowed Medicare hospital patients seeking a right to appeal their placement on ‘outpatient observation status’ to proceed with their lawsuit. The Barrows case, now called Alexander v. Cochran, is a proposed 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 during their hospitalizations.” The notification also included that, “The court addressed whether Medicare beneficiaries have a constitutionally protected interest in coverage of their hospitalizations as inpatients rather than as observation ‘outpatients.’ If such an interest exists, beneficiaries could appeal their observation status through Medicare’s administrative review process, which they are presently not allowed to do.” In addition to attorneys from the Center for Medicare Advocacy, the plaintiffs are represented by attorneys from Justice in Aging and the law firm of Wilson Sonsini Goodrich & Rosati. The court ordered the parties to confer and submit a schedule for further proceedings by February 22, 2017.

AHCA/NCAL continues to keep the observation stays issue one of its top advocacy and outreach priorities. Increasingly, patients have no idea what their status is in a hospital, or the importance of it, which can lead to thousands of dollars in out-of-pocket medical expenses should they need skilled nursing center care following their hospital stay. In addition to placing a financial burden on seniors and their families, this anomaly in Medicare rules can cause unnecessary spend-down, accelerating the time frame in which seniors will have to turn to programs such as Medicaid to pay for their care. For more information about the observation stays issue, please visit the AHCA/NCAL website.

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