They performed their intake and proceeded to do multiple tests. She was then brought to a room where she stayed for the next 60 hours being monitored and given further testing. She was released and much to her dismay, she received a bill for over $17,000 from the hospital and the providers. Her charges were denied by Medicare because she was there under observation and had not been admitted. She called her agent, a member of NAHU. They did send in an appeal to Medicare and, ultimately, it was approved.
Observation status may be able to be appealed successfully through Medicare or the hospital. The Center for Medicare Advocacy has a kit that assists people with the appeal process.
Situations like the one above aren't unusual; under Obamacare, they happen more often than you think.
Next year, legislation will be introduced which requires notice and to forces all overnight stays to count towards the federal government's three-day requirement for skilled nursing coverage.
There is also a class action suit against this practice of observation.