Medicare beneficiaries file class action suit over hospital 'observation status'

The lawsuit challenges Medicare's use of this practice, which classifies certain hospital patients as not having been formally admitted for billing purposes, even though they might have been in the hospital for days. The impact is that these patients are responsible for higher hospital costs and are also denied Medicare coverage for some types of follow-up care.

Reuters: Medicare Beneficiaries Sue U.S. Over Hospital Stays
A group of Medicare patients and their families sued the Obama administration on Thursday, saying they were deprived of coverage by the government health plan because of a policy that allows hospitals to avoid admitting elderly people with chronic ailments as inpatients. The plaintiffs, who are seeking class-action status for the case, asked a U.S. district court in Hartford, Connecticut, to stop Health and Human Services Secretary Kathleen Sebelius from authorizing doctors to place Medicare hospital patients on "observation" status rather than admitting them for inpatient care (Morgan, 11/3).

The Connecticut Mirror: Advocates Challenge Use Of 'Observation Status'
The Mansfield-based Center for Medicare Advocacy filed a class action lawsuit Thursday challenging the practice of placing hospital patients on "observation status," an alternative to admitting them as inpatients that can leave Medicare patients with hefty bills for hospital and nursing home care. ... Medicare patients on observation status are not considered inpatients, making them ineligible for Medicare hospitalization coverage and subject to coinsurance and nursing home costs (Levin Becker, 11/3).

Related, earlier KHN story: What To Do If You're In Observation Care (Jaffe, 11/7/10).

The Hill: Beneficiary Advocates Hit Medicare With Second Class Action Suit
The Center for Medicare Advocacy on Thursday filed a class action lawsuit on behalf of seven Medicare beneficiaries who had to bear the brunt of their hospitalization costs because they were classified as "outpatient." The lawsuit challenges Medicare's use of what's known as the "observation status," which classifies certain hospital patients as not having been admitted for billing purposes even though they might have stayed in the hospital for several days. The practice not only sticks Medicare patients with higher hospital costs, but also denies them Medicare coverage for follow-up care, in nursing homes for example (Pecquet, 11/3).