Medicare - Right to Appeal

Medicare Summary Notices now contain information about a new “right to appeal” related to “observation status” determinations when they are in the hospital. This new right is the result of a class action suit brought by the Centers for Medicare Advocacy on behalf of individuals who were harmed by a change in their hospitalization status from “in-patient” to “observation” status. This lawsuit creates the opportunity for some Medicare recipients to challenge their admission status. The Centers for Medicare Advocacy shared the following information for Medicare recipients:

· “In March 2020, a federal court issued a decision in a nationwide class action, Alexander v. Azar, finding that certain Medicare beneficiaries who are admitted as hospital inpatients, but then reclassified as outpatients receiving observation services (also known as “observation status”), have the right to appeal to Medicare for coverage as hospital inpatients. A federal appeals court affirmed the decision in January 2022.
· Medicare released the final regulations implementing the court’s decision in October 2024.”

The significance of admission status is especially important and can greatly impact care decisions and costs to the Medicare recipient. As the Center reports:

“Inpatients are covered by Medicare Part A. Patients must be hospitalized for at least three consecutive days (not including the day of discharge) as inpatients, covered by Medicare Part A, to be eligible for a Medicare-covered stay in a “skilled nursing facility” (nursing home) after a hospitalization.

People who are in observation status at hospitals are covered by Medicare Part B, which covers outpatient services. Any time spent in observation status does not count toward the three-day hospitalization that is required for coverage of nursing home care. Thus, the right to appeal for coverage as an inpatient under Medicare Part A may be important, especially if you require costly nursing home care after your hospitalization. It may also be important if you were not enrolled in Medicare Part B and were thus responsible for the entire cost of your observation status hospital stay.”

Kudos to The Centers for Medicare Advocacy (CMA) for continuing to fight for the rights of Medicare recipients and keeping us informed when there are challenges to our rights.