General Guidelines and Cautions

The following information for Medicare beneficiaries and their advocates is useful in challenging a discharge or reduction in services in hospital, skilled nursing, home health, and hospice care settings:

Obtaining Necessary Assistance

Hospital Discharge Planning Services

Discharge from the Hospital Setting

Discharge Decision Concerns

Notification of the beneficiary’s discharge and appeal rights should not be hindered when the hospital cannot anticipate the date of discharge. According to CMS, if hospitals cannot anticipate the discharge date, the follow-up IM notice may be given on the day of discharge, at least four hours in advance of the actual discharge.

Beyond requiring that the follow-up IM be given at a minimum of four hours in advance of discharge, CMS does not require the hospital to again obtain the patient’s signature when this follow-up IM is given. The hospital may simply distribute a copy of the signed and dated IM that was given at admission. However, hospitals are not precluded from obtaining a new IM and verifying signature from the beneficiary. By allowing this practice, CMS has made it possible for hospitals to eliminate the need for a follow-up copy of the IM during inpatient stays of up to 5 days. This lack of timely notice may hinder the ability of Medicare patients to be fully aware of and exercise their appeal rights.

Appeals of Hospital Discharge

When a hospital (with physician concurrence) determines that inpatient care is no longer necessary, the Medicare beneficiary has the right to request an expedited QIO review. The CMS guidelines provide that the appeal for expedited review must be made before the beneficiary leaves the hospital.

In order for the review request to be considered "timely," beneficiaries must submit their requests in writing or by telephone no later than midnight of the day of discharge and before they leave the hospital. The beneficiary, therefore, should not be discharged upon requesting the QIO review, so long as the request is made on the same day.

The beneficiary or qualified representative should be contacted by the QIO to discuss the case with the QIO and provide any necessary information that may be required. The hospital is required to submit all pertinent information to the QIO. The patient or his or her representative also has the ability to obtain the same information from the hospital and/or QIO. In addition, the QIO should obtain medical records from the hospital, including speaking to the patient’s physician(s). A timely request will trigger the QIO to render a decision within 1 calendar day after receiving all of the necessary information.

The Detailed Notice of discharge must be delivered "as soon as possible" after the beneficiary has requested a QIO review, but no later than noon of the day after the QIO notifies the hospital of the beneficiary’s request for the review. Under the CMS guidelines, hospitals are only required to deliver the Detailed Notice after the beneficiary has contacted the QIO for expedited review or when the beneficiary requests more detailed information from the medical care provider prior to requesting a QIO review. The Detailed Notice is not an official Medicare decision. It is designed to give the patient further explanation about why the hospital and/or physician believe that the medical services are no longer necessary.

Beneficiaries are not financially liable for hospital costs incurred during a timely QIO review; they are responsible only for coinsurance and deductibles. Further, the burden of proof lies with the hospital to demonstrate that the discharge is the correct decision based on either medical necessity or other Medicare coverage policies. If the QIO decision is in agreement with the hospital (unfavorable to the patient), the beneficiary becomes liable for the medical expenses beginning at noon on the day after notification of the decision is given.

Information on the Required Notices


What Information Must the Important Message from Medicare ("IM") Contain?

What Information Must the Detailed Notice Contain?

When Must the "IM" be Distributed?


The patient must receive the original IM within two days of admittance to the hospital. The hospital must obtain the signature of the beneficiary or of his or her representative and provide a copy to that person at that time. If the patient or representative refuses to sign the IM, then the hospital is required to make a note to that effect; for purposes of requesting an appeal, the date of the refusal to sign is considered the date of notification. A follow-up copy of the signed IM should again be given "as far in advance of the discharge as possible, but not more than 2 calendar days before discharge." If discharge occurs within 2 days of the date the IM was given, no follow-up copy is required.


A beneficiary may be considered discharged when Medicare decides it will no longer pay for the medical services or when the physician and hospital believe that medical services are no longer required. The Medicare Claims Manual provides that a patient may be considered to have been discharged when s/he is either physically required to leave the hospital (not merely transferred to another inpatient setting) or when s/he remains in the hospital but at a lower level of care.


Additional background on the new IM


The new notice, An Important Message from Medicare about Your Rights (IM), can be found on the CMS website at http://www.cms.gov/BNI/12_HospitalDischargeAppealNotices.asp#TopOfPage (site visited October 3, 2008). The requirements for the new notice are discussed in Guidelines which were released by the Centers for Medicare & Medicaid Services (CMS) on May 25, 2007. In the Guidance, CMS explains when and how Medicare patients must be given information about their discharge and appeal rights. See, http://www.cms.gov/Transmittals/downloads/R1257CP.pdf.


Upon receipt of a hospital’s discharge decision, beneficiaries may appeal the decision by requesting a timely review by the appropriate Quality Improvement Organization (QIO). When QIO review is requested, an additional notice called the Detailed Notice of Discharge (Detailed Notice) is to be given. CMS has issued a Question & Answer document elaborating on the use of IM and the Detailed Notice. See, http://www.cms.gov/BNI/Downloads/CMS-4105-FINAL%20RULE%20Qs%20and%20As%2004%2003%2007.pdf.


Weichardt v. Thompson, Civil Action No. C 03 5490 (N.C.Cal. 2003), was filed in federal district court in San Francisco on behalf of three Medicare beneficiaries who were forced to leave their hospitals before they were medically ready. Each plaintiff (or a family representative) objected to being discharged, but received no written notice of the appeal process for challenging the discharge decision. Neither was told that if they stayed on in the hospital, they would be personally liable for the cost of care. The plaintiffs sought a requirement that Medicare beneficiaries are given timely written notice of the reasons for their discharge and of the procedures for appealing a discharge decision.


As a result of settlement discussions, proposed regulations were published on April 5, 2006, at 71 Fed. Reg. 17052. See, http://edocket.access.gpo.gov/2006/pdf/06-3280.pdf. The proposed regulations required that a Generic Notice of Hospital Non-coverage be given to all Medicare hospital patients at least one day before a planned discharge. This generic notice would specify the date of discharge and explain the procedure for the patient to obtain an expedited review of the medical necessity for continued inpatient care. If the patient indicates that she wishes to appeal, the proposed regulations require that a detailed follow-up notice with specifics about the medical reasons for individual’s discharge be given to her by noon of the next day.


Discharge Planning in the Nursing Facility Setting


When nursing facility care needs arise, it is important to contact the local Medicare office or the Social Security office for a list of Medicare participating providers and suppliers, or check www.Medicare.gov/NHCompare.

Facilities are to develop a comprehensive care plan for each resident that includes measurable objectives and timetables to meet a resident’s medical, nursing, and mental and psycho-social needs that are identified in the comprehensive assessment (42 C.F.R. §483.20(b)).


Facilities are to assess the resident’s discharge potential, an assessment of the facility’s expectation of discharging the resident from the facility within the next 3 months (42 C.F.R. §483.20(b)((xvi)).

A SNF must provide notice when it believes Medicare will not pay for an item, service, or purchase. A SNF must also provide proper notice explaining appeal rights and the recommendations for non-coverage. CMS has developed a model notice, the SNFABN, which facilities may use (Form no: CMS-10055; MCM, Pub. 100-04, Ch. 30, §70.3.1).

A facility must provide sufficient preparation and orientation to residents to ensure safe and orderly transfer or discharge from the facility (42 C.F.R. §483.12(a)(7)).


Resident records should contain a final resident discharge summary which addresses the resident’s post-discharge needs (42 C.F.R. §483.20(l)).


Facilities are to develop a post-discharge plan of care, developed with the participation of the resident and his or her family, which will assist the resident to adjust to his or her new living environment. This applies to discharges to a private residence, to another nursing facility, or to another type of residential facility such as board and care or nursing facilities (42 C.F.R. §483.20(l)).


Post-discharge plan of care means the discharge planning process, which includes assessing continuing care needs and developing a plan designed to ensure the individual’s needs will be met after discharge from the facility into the community (42 C.F.R. §483.20(l)).


Factors to explore in accessing whether a facility has provided appropriate post-discharge planning include:

(See, Long-Term Care and Resident Assessment Surveys. State Operations Manual Transmittal No. 8, May 1, 1999, Medicare and Medicaid: SNF Surveys, F283, F284; CMS Pub. 100-07, Appendix PP, Guidance to Surveyors for Long-Term Care Facilities).

Skilled nursing services include observation and assessment of a patient’s medical condition. A frail or chronically ill person need not show deterioration or medical setback in order to justify skilled nursing observation and assessment, including the observation and assessment of acute psychological problems in addition to physical problems (42 C.F.R. §§409.31(b)(1)-(5); 409.32; 409.33).


The Medicare program recognizes maintenance therapy as a legitimate aspect of skilled care services provided in a SNF; that coverage cannot be denied merely because a beneficiary has no restoration potential or has achieved insufficient progress toward Medical improvement has been achieved restoration (42 C.F.R. §409.32(c)).

The Nursing Home Reform Law does not require that a facility provide a beneficiary a notice of denial of admission.


The Nursing Home Reform Law prohibits certain discriminatory admissions practices (e.g., waiving rights to Medicare, requiring written or oral assurance that the individual is not eligible for and will not apply for Medicare or Medicaid, requiring third-party guarantee of payment) and requires that facilities display prominently in the facility information about how to apply for and use Medicare benefits. (42 U.S.C. '1395i-3(c)(5)(A); 42 C.F.R. 483. 12(d)(1), (2)).

As a practical matter, with respect to admissions, some nursing facilities in response to Medicare’s Prospective Payment System (PPS) for Nursing Facilities, (Resource Utilization Groups (RUG-III) criteria) are evaluating potential patients before formal hospital discharge and making admission decisions based on the beneficiary’s likely RUG-III categorization. Patients in these circumstances do not get a notice of a denial of admission and in fact may not even know that they have been evaluated for purposes of a skilled nursing facility admission.


Note: The PPS RUG-III system does not change Medicare skilled nursing facility (SNF) criteria for admission or services. In addition, the failure to be placed in a high RUGs category does not automatically mean that the beneficiary would be denied SNF coverage under Medicare. (See Pub. L. No. 105-33 (Aug. 5, 1997) §4432(a), amending §1888 of the Social Security Act, by adding subsection (e), 42 U.S.C. §1395yy, effective on or after July 1, 1998. See also, 42 C.F.R.'413.330 et seq.).

If the nursing facilities determines that a patient no longer qualifies for Medicare covered skilled nursing services and wishes to transfer the patient to a non-Medicare certified bed, it must give the beneficiary a transfer notice, explaining appeal rights and the steps to take to exercise the right of appeal (42 C.F.R. §483.12(a)).

A Medicare beneficiary has the right to refuse a transfer from a portion of the facility that is a skilled nursing facility to a portion that is not a skilled nursing facility (42 U.S.C. §1395i-3(c)(1)(A)(x); 42 C.F.R. §483.10(o)).

The Medicare law does not provide for holding beds as does Medicaid. Under Medicaid, however, when a nursing facility transfers a resident to a hospital or allows a resident to go on therapeutic leave, the nursing facility must provide written information to the resident and a family member or legal representative that specifies the facility’s bed-hold policies. The policies must be consistent with the provisions of the state Medicaid plan regarding bed-hold (42 U.S.C. §1396r(c)(2)(D); (42 C.F.R. §483.12(b)). The Medicare law does not guarantee readmission rights for a Medicare beneficiary who is hospitalized. There is, however, a right of readmission under Medicaid law for Medicaid beneficiaries who’s hospitalization or therapeutic leave exceeds the period paid by the state for bed-hold if the Medicaid beneficiary requires the facility’s services. The right of readmission is an immediate right to the first available bed in a semi-private room (42 U.S.C. §1396r(c)(2)(D)).

If a SNF decides that Medicare will no longer cover an item, service, or procedure and the facility wishes to bill the beneficiary, it must give the beneficiary written notice of non-coverage, including information about the right to request an appeal of the facility’s non-coverage decision and the steps to take to exercise that right (42 U.S.C. §1395pp (waiver of liability provisions); 42 C.F.R. §411.100 et seq.; Sarrassat v. Sullivan, Medicare and Medicaid Guide (CCH), ¶38,504 (N.D. Cal. 1989), HCFA Ruling 95-1 (Dec. 22, 1995); HCFA SNF Manual, Chapter 3, §357A (establishing when the beneficiary is on notice of non-coverage); §352.1 (determining beneficiary liability)).


If the beneficiary does not agree with the facility’s non-coverage decision, he or she may request that the SNF submit the bill to Medicare even when the facility believes that services will not be covered by Medicare. This submission is called a "demand bill" or a "no-payment bill." Demand bills are required to be submitted at the request of the beneficiary. The facility cannot bill the beneficiary for the disputed charges until the Medicare fiscal intermediary issues a formal claim determination (Medicare Intermediary Manual §3630; Sarrassat v. Sullivan, Medicare and Medicaid Guide (CCH), ¶38,504 (N.D. Cal. 1989)).


Discharge Planning in the Home Health Care Setting


Discharge planning rights in the home health care arena are not as well developed as in the hospital and nursing facility context.  The appropriate focus of advocacy is on keeping services in place. Central to doing so is obtaining notice from the home health provider agency about contemplated denials, reductions, or the termination of services.

Beneficiaries should also explore other sources of coverage when Medicare home health coverage is in question. Private health care coverage, services under the Older Americans Act, Medicaid, and other home and community-based health care may be useful options.


Advocates and beneficiaries should contact the Eldercare Locator (identified at the beginning of this writing) for an exploration of local options.


We are experiencing an up-tick in termination of services of severely ill patients who need chronic, on-going care. Often, these patients are expensive to treat. HHAs express concern about the cost of these cases and about their patient mix. Many are terminating services for "business reasons." This will be an on-going area of advocacy.

Prospective Payment and Access to Service

The Medicare program uses a Prospective Payment System (PPS) as its methodology in paying for home health care. Under this system, HHAs are paid on the basis of a 60-day episode of care in accordance with standard payment amounts (42 U.S.C. §1395fff; 42 C.F.R. §484.200 et seq.).


The PPS for home health relies on a patient assessment instrument, the Outcome and Assessment Information Set (OASIS), as part of the process of determining the PPS amount the home health agency will be paid for each patient (42 C.F.R. §§484.210, 484.220).


When an HHA accepts a patient, it must perform an OASIS assessment of the patient (42 C.F.R. §484.250).


Each patient is assigned to a home health resource group (HHRG) based on the combination of his or her severity levels on the three OASIS data point elements: clinical severity, functional severity, and services utilization.

Home Health Agency Requirements to Inform Beneficiaries


The Medicare program requires each participating HHA to provide its Medicare home health patients with:

Legal Protections Against Loss of Home Health Care Coverage


The Secretary of Health and Human Services is obligated to enforce notice and appeal rights of home health beneficiaries through several means, including intermediate sanctions and terminating the HHA as a Medicare-certified agency (42 U.S.C. §1395bbb(e)(2)).

Notice Under Prospective Payment System


Under PPS, beneficiaries and their advocates should remain vigilant. Changes in health status or other patient circumstances occurring within a 60-day episode of care should trigger notice to the beneficiary.


CMS responded in its pleadings in Healey v. Shalala that notice and appeal rights are not affected by PPS; that the same notice and appeal processes currently in place apply, including the demand bill process. 186 F. Supp.2d 105 (D. Conn. 2001).


Final Reminders for Discharge Planning Advocates in the Home Health Care Setting

Discharge planning in the Hospice Setting

Appeal Rights in Hospice Discharge Situations

Hospice Discharge Planning Rights


Medicare-participating hospice programs must provide discharge planning, including having a:

discharge planning fact sheets for beneficiaries and advocates





Copyright © 2010 Center for Medicare Advocacy, Inc.