A Thursday ruling from a three-judge appellate federal court in Connecticut paves the way for hundreds of thousands of Medicare beneficiaries to appeal non-coverage of nursing home care after hospital stays.
At issue in the case was hospitals’ widespread use of observation status for people receiving hospital services, which typically means that coverage of skilled nursing services is denied because patients did not have the required three-day inpatient stay.
The 2nd Circuit Court of Appeals’ ruling comes in response to a 2011 class action lawsuit from 14 beneficiaries against the Department of Health and Human Services, and it guarantees patients 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 status, which is an outpatient service.
The Center for Medicare Advocacy, which represented the patients with Justice in Aging and the California law firm Wilson Sonsini Goodrich and Rosati, noted that the observation designation can have “severe ramifications.” The judges upheld a lower federal court judgment that found that patients who erroneously were denied coverage after hospitalizations might be forced to choose lower-quality medical care “or even forgo it altogether.”
The court’s decision applies only to people who have traditional Medicare (not Medicare Advantage coverage) whose status was changed from inpatient to observation, Kaiser Health News reported, noting that a hospital services review team can change a status during or after a patient’s stay.“Many older adults and people with disabilities will now have the opportunity to appeal to Medicare for inpatient coverage of their hospital and nursing home services — coverage that can make the difference between getting critical healthcare and going without,” Alice Bers, the CMA’s litigation director, said in a statement.
