Court Approves Class for Lawsuit About Medicare Observation Status

Last month, in the case of Alexander v. Price, 3:11-CV-1703 (MPS), the US District Court in Connecticut certified a class of Medicare beneficiaries who suffered financial loss because they had been hospitalized under “Observation Status” at some time since January 1, 2009.

Patients can be in the hospital, receiving services, for several days and even weeks, and still not be “admitted.”  Although new regulations from the Centers for Medicare and Medicaid now require hospitals to inform patients of their status, there is currently very little recourse, especially if the patient is no longer in the hospital by the time he is  notified.  As a result, patients may have  expensive co-pays for services that would have been covered for patients who were admitted by Medicare Part A.   And Medicare will only cover the cost of skilled nursing or in-patient rehab for someone who is discharged to that level of care after having been admitted to a hospital for at least 3 days.  If someone is transferred from the hospital following observation status….no matter how long the duration…..those services are not covered by Medicare.

Attorneys for the Center for Medicare Advocacy, who are representing the class along with the law firm of Wilson Sonsini Goodrich & Rosati, hope to establish a right to review the hospital’s decision whether to admit a patient or keep her under observation status.

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