Community, Diversity, Sustainability and other Overused Words

Rules for Seniors Under "Observation Status," Violate Medicare Beneficiaries' Constitutional Rights

Observation Status isn't a medical diagnosis. It's subjective. It's a billing term strictly used for Medicare.

Christine Emerson's story in the Santa Monica Observer, "Patients to be Protected from Observation Status, under Bill Signed by Gov. Brown," misquoted several facts written by journalist Susan Jaffe in her article in California Healthline,

"Protecting California's Seniors From Surprise Hospital, Nursing Home Bills." These facts concerned what happened when my aunt, Lois Frarie, entered a hospital. Ms. Jaffe wrote, "She spent four days in the hospital, including two as an observation patient, after she fell and fractured her elbow and pelvis, requiring surgery four years ago."

Lois's two nights of observation status and two nights of inpatient status at the hospital didn't meet the Medicare standards for her to qualify for Part A coverage at a skilled nursing home (SNF) care.

Thus, she was faced with paying more than $19,000 to the SNF. The Centers for Medicare and Medicaid Services, CMS, and their contractors, consistently denied my aunt her constitutional due process rights during her appeals by delaying decisions and claiming that since neither the hospital nor SNF issued a denial letter concerning Observation Status, she didn't have the right to appeal a committee's decision on 3/31/12 that changed a doctor's order on 3/30/12 from inpatient status to Observation Status for two nights out of four. The committee didn't include Lois's orthopedic surgeons or the ER doctor.

When I asked who was on the committee, hospital staff claimed the information was "proprietary" and refused to disclose it to me. Observation Status isn't a medical diagnosis. It's subjective. It's a billing term strictly used for Medicare and not used by insurance companies for anyone under 65.

I believe that the current discriminatory federal laws and regulations dealing with seniors in Observation Status and CMS administrative appeal procedures violate Medicare beneficiaries' Constitutional rights. Governor Brown signed SB 1076 which will establish "Observation Status" units for seniors within hospitals in California. If this sounds familiar, signs placed over bathrooms, in bus and train station waiting areas, water fountains, and other public facilities, proliferated in the U.S. for decades.

Federal and state employees, mayors and governors claimed it was legal. But separate and unequal treatment of people of color violated the Constitution just as I believe separate laws for the elderly concerning Observation Status in health care is discriminatory. Sincerely, Sherry Smith, LCSWAs for Observation Status, there was a bill in Congress, HR 1571 that would have counted "outpatient observation services in a hospital toward satisfying the 3-day inpatient stay requirement for coverage of skilled nursing facility services under Medicare" but the bill got stuck in committee. The Center for Medicare Advocacy has two class action lawsuits in federal courts dealing with observation status and with the long delays.

Last year, when I asked about the backlog for hearings before administrative law judges, a CMS employee told me that there were 10,000 people waiting for a hearing. I've written President Obama, Lois's and my congressman (who both signed on as cosponsors to HR 1571), and advocated as much as I could. Congress must change this discriminatory law or thousands of other elderly people will be subjected to huge SNF bills while if they were under the age of 65 and had regular insurance, they wouldn't.


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