A federal district court last week ruled that the Centers for Medicare & Medicaid Services (CMS) must establish an appeals process for certain Medicare patients to challenge their observation status.
Currently, Medicare beneficiaries are unable to appeal observation status. The ruling in the nationwide class-action lawsuit, Alexander v. Azar, applies to Medicare patients who were admitted as inpatients and subsequently had their status changed to observation during the hospital’s utilization review process any time after Jan. 1, 2009. It does not apply to patients who were initially placed in observation by a physician and never admitted as inpatients. CMS is likely to appeal the ruling.