Judge dismisses observation stay lawsuit

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Federal court allows whistleblower to pursue charges against Omnicare
Federal court allows whistleblower to pursue charges against Omnicare

A Connecticut federal court judge has dismissed a lawsuit brought forth by a group of 14 Medicare beneficiaries denied skilled nursing care coverage after a hospital stay.

Bagnall v. Sebelius involved the group suing because they had stayed in a hospital for observation and did not meet the controversial three-day requirement. The lawsuit, filed in 2011, said the beneficiaries had to pay tens of thousands of dollars in nursing home bills.

The Monday ruling of Judge Michael P. Shea, U.S. District Court, District of Connecticut, was mostly based on a 2008 federal court decision that said the HHS secretary can let hospitals and doctors decide who is admitted as an inpatient.

“We are analyzing the decision and considering the next steps,” Connecticut attorney Alice Bers of the Center for Medicare Advocacy, who represented the plaintiffs, told McKnight's. “We continue to hear every day from people who have to pay thousands of dollars in nursing home bills.”

Rep. Joe Courtney (D-CT) and Rep. Jim McDermott (D-WA) have both pushed for bills that would kill the observation stay requirement.