Medicare patients sue HHS over outpatient status

On behalf of seven elderly Medicare beneficiaries, the Center for Medicare Advocacy last week filed a lawsuit against U.S. Department of Health & Human Services (HHS) Secretary Kathleen Sebelius over the increasing billing practice of observation status. The plaintiffs say that inappropriate use of observation status illegally denies patients Medicare coverage and burdens them with large hospital bills, reports Reuters.

"That status is denying thousands of beneficiaries of their Medicare coverage rights, even though they are inpatients in hospitals," Judith Stein, executive director of the Center for Medicare Advocacy, said during a Thursday conference call, reports The Connecticut Mirror.

The plaintiffs argue that HHS allows physicians to inappropriately place hospitalized Medicare beneficiaries on observation status rather than inpatient status. Observation status is typically used for hospital stays less than 48 hours but instead, according to the plaintiffs, hospitals place older patients, who actually stay in the hospital for longer, on observation. As a result, the plaintiffs say they only qualify for Medicare Part B, which covers fees at outpatient facilities, leaving them with hundreds in hospital bills and thousands in nursing home bills, according to The Connecticut Mirror.

"This causes severe financial problems for beneficiaries and their families," Stein said in the Reuters article.

According to the Medicare Payment Advisory Commission, the number of observation status claims increased by 22.4 percent from 2006 to 2008 and the claims for hospital stays of 48 hours or longer jumped by 70.3 percent, the lawsuit states.

For more information:
- read the Reuters article
- read the Connecticut Mirror article
- check out The Hill blog post

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