CMS Enhanced Patient Appeal Procedures


Doctors must consider the implications of altering a patient’s status.

The Centers for Medicare & Medicaid Services (CMS) is suggesting novel retrospective and prospective appeal procedures in compliance with a federal district court order from the District of Connecticut. On December 21, the agency unveiled a proposed rule aiming to institute an appeal mechanism for specific Medicare beneficiaries. These individuals are first registered as inpatients at hospitals and subsequently reclassified as outpatients, leading to alterations in their eligibility for coverage.

To address these coverage conflicts, CMS aims to introduce:

  1. An accelerated appeal process
  2. A regular appeal process
  3. A retrospective review process

Who Meets The Criteria For An Expedited Appeal?

Medicare beneficiaries contesting a hospital’s decision to switch their classification from inpatient to outpatient, impacting their Part A coverage for the hospital stay would have the right to request a prompt appeal.

These expedited appeals must be submitted before leaving the hospital. Otherwise, standard appeals can be filed post-discharge, following procedures akin to expedited appeals but without the expedited timeline.

Furthermore, a retrospective review process would permit certain beneficiaries to appeal rejections of Part A coverage for hospital services (including specific skilled nursing facility services) for particular inpatient admissions involving status changes dating back to January 1, 2009.The revised appeal processes are targeted toward Medicare beneficiaries who, from January 1, 2009 onward:

  • Were admitted to a hospital as inpatients
  • Subsequently reclassified by the hospital as outpatients receiving observation services
  • Received an initial determination or Medicare Outpatient Observation Notice (MOON) stating that the observation services aren’t covered under Medicare Part A
  • Either weren’t enrolled in Part B coverage during their hospitalization or stayed at the hospital for three or more consecutive days but were labeled as inpatients for fewer than three days (unless more than 30 days have elapsed after the hospital stay without admission to a SNF).

However, Medicare beneficiaries meeting these criteria but who pursued an administrative appeal and obtained a final decision before September 4, 2011, are not included in these procedures.

What Would Be The Functioning Of The New Appeal Process?

Beneficiary & Family Centered Care – Quality Improvement Organizations (BFCC-QIOs) would oversee the appeals. Initially, Medicare Administrative Contractors (MACs) would handle first-level retrospective reviews, followed by reconsiderations by Qualified Independent Contractors, Administrative Law Judge hearings, review by the Medicare Appeals Council, and finally, judicial review.

In the proposed rule, CMS provides flowcharts outlining the comprehensive appeals process for both retrospective and prospective reviews.

What Impact Would This Have On Adjudicated Part B Claims?

In the proposed rule, CMS clarifies that the appeals would focus on Medical claims for services not directly billed to the program. The reconsideration aims to determine if the specific items and services billed should have been covered and compensated under Part A, rather than assessing the medical necessity of those items and services.

An “eligibility contractor,” acting as a central contact for incoming retrospective appeal requests, would assess the validity of the appeal request.


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