AHA Comments on Medicare Outpatient Observation Status Appeals Proposed Rule
The American Hospital Association (AHA) provided comments on the Centers for Medicare & Medicaid Services’ (CMS) proposed rule (CMS-4204-P) to establish new appeal rights for certain changes in patient status for Medicare beneficiaries. This rule, required by the court order issued in Alexander v. Azar, specifies those beneficiaries admitted for an inpatient hospital or skilled nursing facility (SNF) stay and then subsequently reclassified to an outpatient stay with observation services. This would result in a denial of payment for the stay under Part A. The proposed appeal processes would consist of:
- Expedited appeals – eligible beneficiaries would be entitled to request an expedited appeal regarding the reclassification of the inpatient hospital stay to observation PRIOR to discharge. Appeals would be conducted by a Beneficiary & Family Centered Care—Quality Improvement Organization (BFCC–QIO).
- Standard appeals – beneficiaries who do not file an expedited appeal would be able to file a standard appeal, which would be similar to the expedited appeals process. The differences between the two types are the standard appeals would not have the expedited filing timeframes or the QIO to make decisions.
- Retroactive appeals – certain beneficiaries would be able to file appeals dating back to January 1, 2009. Medicare Administrative Contractors (MACs) will perform the first level of appeal, followed by Qualified Independent Contractor (QIC) reconsiderations, Administrative Law Judge (ALJ) hearings, review by the Medicare Appeals Council, and judicial review.
In a letter addressed to the CMS Administrator, the AHA expressed their support for the general approach CMS has proposed for appeals and has offered recommendations to provide clarification to “help make these policies even more clear, ensure that beneficiaries better understand CMS guidelines regarding covered inpatient care, and reduce burden on all parties involved.” These recommendations include modifications to the Medicare Change of Status Notice (MCSN) to include language that informs eligible beneficiaries about Medicare Part A inpatient admission and medical review criteria as it relates to their proposed appeal rights; the hospital may discharge them while the expedited appeal is pending; and they are financially liable during the appeals process. In addition, the AHA advised CMS to provide more detailed information in the final rule to “clarify precisely how and when the BFCC-QIO would provide hospitals with this information and that the agency establish an electronic means for the BFCC-QIO to provide these updates to hospitals.”
