UPDATE (January 25, 2022): A federal appeals court ruled that this national class of plaintiffs can appeal to the Centers for Medicare and Medicaid Services (CMS) when their hospital stay classifications are changed from “inpatient” to “observation status.” Read the Press Release.

Martha Leyanna of Delaware, described in the court’s decision, spent more than three days in the hospital, receiving identical care to that received by patients classified as inpatients, but because her care had been designated as “outpatient” observation services, Ms. Leyanna, who has since passed away, spent her entire savings of $10,000 for nursing home care.

Such classifications can force patients who cannot afford to pay for nursing home care to forgo required health care altogether because they cannot afford it without Medicare coverage. Prior to this decision, beneficiaries whose status was changed from inpatient to observation had no opportunity to appeal to Medicare. The trial court had found that this lack of appeals procedures violates the Due Process Clause of the constitution. The class is represented by the Center for Medicare Advocacy, Justice in Aging, and pro bono firm Wilson Sonsini Goodrich and Rosati.

The class is estimated to contain hundreds of thousands of beneficiaries with claims dating as far back as 2009. For more information please read the Center for Medicare Rights’ frequently asked questions about the case.

Case Documents:

Decision in the United States Court of Appeals for the Second Circuit (January 25, 2022)
Memorandum of Decision (March 27, 2019)
Order on Class Certification (July 31, 2017)

Press Releases:

Nationwide Class of Plaintiffs Wins Right to Appeal Hospital Observation Status Classifications (January 27, 2022)
Medicare Patients Placed Under “Observation Status” Win Right to Appeal, Federal Court Orders (March 24, 2020)
Court Certifies Nationwide Class in “Observation Status” Case (August 1, 2017)