CMS Rule: Opportunities for Medicare Beneficiaries to Appeal Hospital Stay Status

Last week, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would allow Medicare beneficiaries more opportunities to appeal their hospital status, appeal after hospital discharge and a retrospective appeal for a class action lawsuit.

According to the American Hospital Association, the proposed rule is the product of a 12-year-old class action lawsuit affirmed by the U.S. Court of Appeals for the Second Circuit in January 2022. The ruling ordered the Secretary of the U.S. Department of Health and Human Services (HHS) to establish an appeals processes for Medicare beneficiaries who were admitted to the hospital as inpatient but whose status changed to outpatient during their stay.

More than a decade ago, hospitals redetermining a patient’s admission status despite stays that lasted several days triggered political backlash, Modern Healthcare reports. Although the legal battle took over a decade, President Barack Obama enacted a law that required hospitals to notify patients when they are declared to be under observation status but not admitted.

Medicare Advantage beneficiaries are ineligible for the appeals process. But CMS  did say that the procedure for the appeal would be similar to already existing appeals processes familiar to Medicare beneficiaries. An eligibility contractor will also be made available as the single point of contact for the retrospective appeals, Inside Health Policy reports.

The rule’s comment period is open for 60 days. The rule may be reviewed in full at the Federal Register.