CMS Finalizes Medicare Appeal Rights for Hospital Status Changes

• By: Maureen Carland
• On: 10/29/2024 07:53:03
• In: Quality/Regulatory

Recently, the Centers for Medicare & Medicaid Services (CMS) finalized the "Medicare Program: Appeal Rights for Certain Changes in Patient Status" rule. This new regulation establishes an appeals process for Medicare beneficiaries who are admitted as hospital inpatients but later reclassified as outpatients receiving observation services during their stay. It represents a significant step toward ensuring that beneficiaries can appeal reclassifications and avoid the denial of skilled nursing facility (SNF) benefits.
Summary of the Final Rule on Medicare Appeal Processes
The rule stems from a federal district court order in Alexander v. Azar, requiring the Department of Health and Human Services (HHS) to create an appeal process for Medicare beneficiaries whose status is changed from inpatient to outpatient during their hospital stay, provided they meet certain criteria. Key components include:

• Expedited Appeals: Beneficiaries can request an expedited appeal before leaving the hospital if they disagree with their reclassification, which impacts their Part A coverage. These appeals will be handled by a Beneficiary & Family Centered Care Quality Improvement Organization (BFCC-QIO).
• Standard Appeals: For beneficiaries who do not pursue expedited appeals, a standard appeal process is available, following the same procedures but without the expedited timeframes.
• Retrospective Appeals: This process applies to status changes dating back to January 1, 2009. Beneficiaries will have 365 days from the rule's implementation date to file appeals, following the established processes involving Medicare Administrative Contractors (MACs), Qualified Independent Contractors (QICs), and the possibility of administrative law judge hearings and judicial review.

Revisions Based on Public Feedback
The final rule includes several changes based on public input:

• Extended Timeframes: Providers now have 365 days (up from 180) to submit claims after a favorable decision, and the timeframe for submitting requested records has been extended from 60 to 120 days.
• Refund Clarifications: The rule clarifies hospitals' financial responsibilities for Part A and Part B claims and refunds.
• Payments from Non-Relatives: The rule specifies that out-of-pocket payments for SNF services can include contributions from non-relatives, such as close friends or roommates.

This rule took effect on October 11, 2024.
 
Staff contact: mcaland@mehca.org