AHA files amicus brief in 'observation' lawsuit

AHA News Now

The Centers for Medicare & Medicaid Services' ambiguous policy regarding "observation" stays leaves hospitals "in an untenable position," the AHA said in a friend-of-the-court brief filed Friday in a federal lawsuit brought by Medicare beneficiaries challenging the agency's use of observation status. The brief does not take a position on the outcome of the case, but provides the court with another perspective on why this is a difficult issue for hospitals and hence beneficiaries. "Without adequate guidance, hospitals will continue to be exposed to claim denials and [False Claims Act] liability simply for deferring to the medical judgments of patients' admitting physicians," the AHA said. "However the Court resolves this case, it should do so with sensitivity to the difficult situation hospitals find themselves in with respect to observation status." Adding to the difficulty, the brief points out, is the fact that the government does not speak with one voice. "On the one hand, [hospitals] risk penalties from auditors and prosecutors when they admit patients for short inpatient stays," the brief states. "On the other hand, they face criticism from patients and CMS over the perceived use of observation status as a substitute for inpatient admissions." The brief suggests that the court consider sending the case back to the agency for the purpose of convening a stakeholders' meeting and developing a clearer policy. 

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