Secretary’s Motions Denied in Class Action Seeking Appeal Right of Observation Status Designation of Hospitalized Medicare Recipients (D. Conn.)

Several Medicare beneficiaries or their estates filed a class action to require the Secretary of Health and Human Services to afford them a process to challenge the decision when they are hospitalized to admit them either as inpatients or place them on observation status. Because Medicare covers the cost of a skilled nursing facility upon discharge only if the patients spent at least three consecutive days as a hospital inpatient, the named plaintiffs incurred thousands of dollars in post-hospital skilled nursing facility (SNF) costs as a result of their observation status classification even though each had spent multiple days in the hospital. Plaintiffs alleged that the Secretary’s failure to provide a hearing or other administrative review of a hospital’s decision violates the Due Process Clause of the Fifth Amendment. The Secretary filed a second motion for summary judgment, a motion for class decertification, and a motion to dismiss.

The United States District Court for the District of Connecticut denied each of the Secretary’s motions and ordered the case to proceed to trial. The court 1) held summary judgment was not appropriate because a trial is necessary to determine whether and to what extent the plaintiffs have a protected property interest in Medicare coverage to support their Due Process claim; 2) although denying class decertification, the court modified the class definition and instructed the parties to file supplemental briefings on whether the class should be narrowed or subdivided; and 3) ruled that plaintiffs had standing and their claims were not moot, so dismissal for lack of subject matter jurisdiction was unwarranted.

Alexander v. Azar, 2019 WL 1383526 (D. Conn. March 27, 2019)
Also read the NAELA Journal article “Observing the NOTICE Act

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David Wingate is an estate planning and elder law attorney at Estate and Elder Planning by David Wingate. The Estate and Elder Planning office services clients with powers of attorneys, living wills, Wills, Trusts, Medicaid and asset protection. The Elder Law office has locations in Frederick, Washington and Montgomery Counties, Maryland.

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