Patients trump HHS in Medicare nursing home coverage suit

A panel of three judges ruled against HHS in a move that will allow Medicare beneficiaries to appeal nursing home coverage decisions if they transitioned from inpatient care to outpatient observation, according to Kaiser Health News

Following the ruling, Medicare beneficiaries can now appeal a denied nursing home benefit if they were first admitted to a hospital and then shifted to observation. Previously, patients had to stay three days in a hospital to qualify for nursing home coverage, and HHS did not allow Medicare recipients to appeal the decision. 

"You can appeal almost every issue affecting your Medicare coverage except this one, and that is unfair," Alice Bers, litigation director at the Center for Medicare Advocacy, which represented the patients in their lawsuit, told Kaiser Health News

The Jan. 25 ruling follows years of back-and-forth since the initial lawsuit was filed in 2011. A 2020 ruling favored plaintiffs, but the government unsuccessfully attempted to appeal the decision. 

"The decision to reclassify a hospital patient from an inpatient to one receiving observation services may have significant and detrimental impacts on plaintiffs' financial, psychological and physical wellbeing," the judges wrote. "That there is currently no recourse available to challenge that decision also weighs heavily in favor of a finding that plaintiffs have not been afforded the process required by the Constitution."

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