Observational Vs. Admitted: CT Advocates Win Class Status For Suit Challenging Medicare Benefits – Hartford Courant
A Connecticut advocacy group has won class certification for a lawsuit demanding that Medicare beneficiaries be allowed to challenge their patient classification as “observational” rather than “admitted” when hospitalized — a distinction that can cost thousands of additional dollars in hospital, medication and nursing home care.
Recent estimates suggest that as many as 1 million Medicare beneficiaries are hospitalized around the country each year under observational status. Until May, hospitals were under no obligation to notify the patients that they were not admitted and the patients learned only upon being billed for significant medical and post-release nursing care.
Under Medicare rules, beneficiaries are not permitted to challenge their classification.
The suit was brought six years ago by the Willimantic-based Center for Medicare Advocacy, which represents beneficiaries across the country. U.S. District Judge Michael P. Shea in Hartford certified the suit as a class action in a decision made public Tuesday. Should the center prevail, hundreds of thousands of beneficiaries forced to pay higher costs could benefit.
The center’s litigation director, Alice Bers, said the experience of an 84-year-old class member from North Carolina frames the issues raised in the suit. After her physician sent her to an emergency room, Nancy Niemi was hospitalized for 39 days.
Niemi later learned that, in spite of her hospitalization, she had not been admitted. Rather she was put on “observational status,” which under Medicare rules means she was essentially an outpatient. Because she could not claim to have been admitted for the three-day minimum stay required by Medicare, Niemi was responsible for care in the nursing home where she was placed after leaving the hospital.
There is disagreement over the rationale hospitals use to distinguish between admitted and observational patients, according to the suit. A now-deceased Connecticut resident was hospitalized for eight days in 2009. He was initially admitted, but his status was changed retroactively to observational, according to the suit.
When hospitals treat beneficiaries on “observational status,” the patients essentially are denied Medicare Part A benefits and switched to Part B, for which patients pay monthly premiums or are subject to cost-sharing, according to the suit.