This appeared in the NY Times (link).
Observation status update: you can appeal your status now. Basically, when you go to a hospital, you could be admitted or not. If not, then you are covered by Part B (subject to deductible and 20% coinsurance after the deductible is met). If you are admitted then you fall under Part A.
For Medigap, Part B deductible isn’t covered by original Medicare, and only on plans C & F is the Part B deductible covered. For Medicare Advantage, you would be charged according to the policy, which will vary from plan to plan.
The question here: what happens if your status is switched from inpatient (covered by Part A) to observation (covered by Part B)? Now, you have the right to appeal.
This in favor of Medicare beneficiaries. Note: my favorite book mentions that even then, the CMS has the right to switch your status, after the fact, under audit. So this ruling, while favorable for Medicare people, doesn’t solve every last issue.