Medicare Patients Can Now Appeal “Observation Status”

Last week, Justice in Aging and the Center for Medicare Advocacy successfully won a ruling from a federal judge that Medicare patients who have been denied coverage in nursing facilities because they were under “observation status” in the hospital, rather than having been admitted, can appeal that classification.  A successful outcome would allow them to potentially receive reimbursement from Medicare for the uncovered nursing facility charges they had incurred.

if a patient is receiving outpatient observation services for more than 24 hours, hospitals are now required to provide a Medicare Outpatient Observation Notice (MOON) to advise that the person is an outpatient in a hospital or critical access hospital.  The MOON also describes how this may affect what the patient will pay while in the hospital, and for care   after leaving the hospital. However, the MOON is a relatively recent development, so patients previously had no way of knowing their treatment status while in the hospital, or on discharge.   Now, this important decision will allow thousands of Medicare beneficiaries who were denied coverage for nursing home stays to appeal changes in their status to “observation” going back to 2009.  And in the present time, patients can demand to know whether they are being treated as inpatients, or under observation status, so they can take appropriate action in real time.

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