On July 31, a federal judge in Connecticut certified a class in a class-action lawsuit: all Medicare recipients who’ve been hospitalized and received observation services as outpatients since January 1, 2009.

That means hundreds of thousands of people, Ms. Niemi among them, will be eligible to join the suit against the Centers for Medicare and Medicaid Services, with a trial expected next year. If the plaintiffs prevail, they’ll be able to appeal their observation-outpatient stays.

“People call in dire situations, and we have to tell them there’s no way to challenge this,” said Alice Bers, litigation director of the Center for Medicare Advocacy, which brought the lawsuit with Justice in Aging and a law firm, Wilson Sonsini Goodrich & Rosati. “Now we can tell them, ‘You’re a member of the class, so stay tuned.’”

A quick primer on a confusing situation: Medicare Part A covers hospital care for inpatients. Outpatients, including those on observation status, are covered under Part B. That distinction has generated complaints and controversy for years, as the number of inpatient hospitalizations has declined among Medicare recipients and outpatient stays have become more common.

Why does the classification matter? Outpatients can face higher payments for drugs and coinsurance, but the big-ticket item is nursing home care.

After a hospital discharge, Medicare pays the full cost of skilled nursing for the first 20 days, and most costs up to 100 days — but only for patients who’ve spent three consecutive days as inpatients. Without three inpatient days, patients are on their own.

Though most observation patients return home and needn’t to worry about nursing home costs, nearly two-thirds of those who do need skilled nursing have to shoulder the substantial costs themselves, according to a report from the AARP Public Policy Institute.