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Medicare Beneficiaries Must Beware of Costly Observation Services

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But when the person is ready to go home, she will find that Medicare Part A won’t cover the stay because she was never formally admitted to the hospital. All ser­vices received will be billed separately un­der Part B, as if they had been delivered in a doctor’s office.

By Carol Levine

Hundreds of thousands of Medi­care beneficiaries who received “observation services as an out­patient” after January 1, 2009, may be eligible to participate in a class-action lawsuit to appeal those financially costly decisions. On July 31, 2017, in the case Alexander v. Price, Judge Michael P. Shea, of the U.S. District Court of Connecticut, ruled in their favor over the objections of the U.S. Department of Health and Human Services (HHS). 

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