Barrows v. Becerra Update and Observation Stays

This week was a win in court for Medicare beneficiaries and the skilled nursing facilities (SNFs) who provide care to these individuals most in need. Under Medicare law (when not in the current Public Health Emergency as the 3-day stay requirement is currently waived), patients must have an inpatient stay in a short-term acute care hospital spanning at least three consecutive days (not counting the day of discharge) in order for Medicare to pay for a subsequent stay in a SNF. However, acute care hospitals are increasingly identifying patients as in “observation,” an outpatient designation, rather than admitting them as inpatients. Outpatients may stay for multiple days and nights in hospital beds and receive medical and nursing care, diagnostic tests, treatments, medications, and food, just as inpatients do. However, although the care received by patients in observation status can often be indistinguishable from the medically necessary care received by inpatients, outpatients who need follow-up care do not qualify for Medicare coverage in a SNF. As a result, the Medicare beneficiary ends up being responsible for paying for the SNF stay, which places an unfair burden on the beneficiary through no fault of the beneficiary.

Patients do not have hearing rights to challenge their observation status. In Barrows v. Becerra, the Court of Appeals affirmed the District Court and ruled yesterday that Medicare beneficiaries whose status in the hospital is changed from inpatient to outpatient have the right to a hearing to challenge the change. This is a positive step forward in helping to ensure Medicare beneficiaries are not denied their needed SNF benefit. AHCA submitted an amicus brief in support of the plaintiffs and fully supports that a right to appeal should exist.

Posted in Medicare, Regulatory