Certain Beneficiaries on Hospital “Observation Status” Now Have a Right to an Appeal (Finally!)

judge gavel with law books and scales of justice

After 11 years of legal battles, certain Medicare beneficiaries who have been under “observation status” while in the hospital can now file an appeal for payment of their nursing home coverage. The recent January 25th ruling that came in response to a 2011 class-action lawsuit against the Department of Health and Human Services is a huge victory for beneficiaries and will help prevent unnecessary financial strain due to catastrophic medical bills.

Medicare requires three days of “inpatient” hospital care before covering nursing home care — which means patients in the hospital who were coded as in “observation status” instead of “inpatient” were not eligible for this coverage. This has left many Medicare beneficiaries with huge medical bills and no way to appeal for coverage.

Now, with the new ruling, patients have the right to appeal to Medicare for nursing home coverage if they were admitted to a hospital as an inpatient but were switched to observation care, an outpatient service.

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Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.