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In Fairness to Seniors, Observation Status Should be Eliminated

Placing seniors on observation status appears to be a tactic to avoid adding to a hosptial’s readmission rate, but it hurts seniors financially.

In fairness to our senior population, hospital use of “observation status” to deny Medicare patients benefits and shift costs onto them must change. That’s why I’m heartened to hear that a federal court has ruled that Medicare beneficiaries who have experienced an observation stay can be part of a class action lawsuit against the government.

In reporting on Alexander v. Price, 3:11-CV-1703 (MPS), the Center for Medicare Advocacyrelated the recent experience of a North Carolina senior who was hospitalized for 39 days—on observation status. Because she wasn’t “officially” admitted to the hospital, the woman didn’t qualify for a Medicare-covered nursing home stay because she didn’t meet the 3-day inpatient hospital stay qualification. Therefore, she faces a considerable nursing home bill. Her son tried to intervene on her behalf, which Medicare does not allow.

In its ruling, the court cited a study performed by Brown University in 2012 that identified more than 900,000 Medicare patients who were subject to observation stays during 2009 alone. Multiply that by the number of intervening years, and we’re talking about the potential for millions of potential plaintiffs.

To read the full article, visit the American Journal of Managed Care.