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A lawsuit was filed on November 3, 2011 by the Center for Medicare Advocacy, and co-counsel National Senior Citizens Law Center, seeking to end the use of hospital "Observation Status" (Bagnall v. Sebelius (No. 3:11-cv-01703, D. Conn)).  The suit was filed on behalf of seven individual plaintiffs from three states who represent a nationwide class of people harmed by the illegal "observation status" policy and practice.

Bagnall v. Sebelius states that the use of observation status violates the Medicare Act, the Freedom of Information Act, the Administrative Procedure Act, and the Due Process Clause of the Fifth Amendment to the Constitution.

See for more information, and to hear a recording of the news conference regarding Observation Status and the Bagnall case.