Medicare beneficiaries who have been denied coverage for nursing home stays because their time in the hospital was changed from “inpatient” to “observation care” can now appeal to Medicare for reimbursement, a federal judge in Hartford, Conn., ruled last week.

The decision opens the door to medically necessary services in skilled nursing facilities that Medicare beneficiaries might otherwise have to forgo because they cannot afford to pay for it themselves. The distinction between being labeled a hospital “inpatient” versus being placed on observation status is important because Medicare only covers subsequent care in a skilled nursing facility for patients who were hospitalized as inpatients for three or more consecutive days. Patients in observation status are considered “outpatients” and thus ineligible for coverage of very costly care at nursing facilities. This has forced many Medicare beneficiaries to either pay thousands of dollars out of pocket for that care or to forgo the needed care altogether. While people with Medicare can appeal virtually any issue affecting their coverage, the Centers for Medicare &  Medicaid Service (CMS) has blocked attempts by beneficiaries to appeal their hospital status.

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Medicare patients can challenge costly ‘observation care’ status, thanks to suit involving Pa. senior