The Right to Appeal Your Observation Status

I have written before about the consequences of a hospital keeping a patient in “observation status” rather than admitting her.  Although the care may be the same, the partient who has been admitted is covered by the much more comprehensive Medicare Part A, whereas the patient under observation status is only covered by Part B. Part B works great for doctor’s visits and care in the community, but can result in extremely large deductibles and co-pays that the admitted patient will not have for the exact same care.

An even more detrimental result of observation status is that Medicare will not cover the cost of skilled nursing or rehab for a patient who leaves the hospital under that status.  Medicare will only cover the cost of that care if the patient was admitted to the hospital for at least 3 days before being discharged to skilled care.

In March, 2017, the Centers for Medicare and Medicaid (“CMS”) directed hospitals to make patients in observation status aware of that, both by giving them a written MOON (Medicare Outpatient Observation Notice) and explaining it orally.  While having this information is crucial, a patient has no right to appeal the hospital’s determination that he is under observation status only.

Advocates have long encouraged CMS to do away with “observation status” for any patient who is in the hospital overnight.  While there is no indication that this change  is even being consdiered, the federal courts have now certified a class to bring a class-action suit to test the right to appeal observation status. Certification of Class Observation Status Case 

I look forward to reporting on the results of this case in the future.

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