Medicare considers patients who are in the hospital "under observation" as outpatients who therefore will not be covered, no matter how long they are actually in the hospital, according to The New York Times in "Under 'Observation' Some Hospital Patients Face Big Bills."
Elder law advocates have long pointed out that the rule is absurd.
The patient does not always get to choose what the hospital writes down in the file and the patient does not always know the importance of being formally admitted, instead of just being under observation.
There has never been a way for the patients to challenge their designations later, until now.
A judge in Connecticut has recently opened the door for legal challenges.
Reference: New York Times (Sep. 1, 2017) "Under 'Observation' Some Hospital Patients Face Big Bills."