A broad coalition of 75 national, state, and local advocacy organizations joined the Center for Medicare Advocacy (the Center) in submitting comments on a rule to establish appeals for beneficiaries who have been placed in “observation status.” As a result of litigation led by the Center, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule in December 2023 to implement procedures allowing hospital patients whose status is changed from inpatient to observation to appeal for inpatient coverage. See Alexander v. Azar, 613 F. Supp. 3d 339 (D. Conn. 2020), aff’d sub nom. Barrows v. Becerra, 24 F. 4th 116 (2d Cir. 2022). The appeals will open the door to medically necessary services in nursing homes that many have had to forgo, or pay thousands of dollars for, due to their observation status classification.
Along with the Center and co-counsel Justice in Aging, organizations that signed on to the letter include AARP, the ALS Association, the Medicare Rights Center, the National Committee to Preserve Social Security and Medicare, the National Disability Rights Network, and the National Health Law Program. The comments support CMS’s general approach to the court-ordered appeal procedures and strongly urge the agency to finalize and implement the rule as quickly as possible.
The coalition of advocates support that the proposed observation status appeals will be largely similar to existing Medicare appeals. The advocates also support provisions that aim to minimize burden on beneficiaries. However, they made several recommendations to improve the procedures. For instance, the organizations advise extending the time period in which eligible class members can file retrospective appeals for coverage of past claims; providing additional clarity and guidance to beneficiaries on submission of supporting medical records; and conducting additional education and outreach to ensure beneficiaries and their families are aware of the new appeal procedures.
The Center, Justice in Aging, and Wilson Sonsini Goodrich & Rosati (the three organizations representing the plaintiff class in Alexander v. Azar) submitted more detailed comments on the proposed rule in a separate letter. Additionally, a diverse coalition of organizations that have long fought observation status commented on the rule. The coalition, which represents Medicare beneficiaries, health care professionals, and health care facilities, called for CMS to address the issue of observation status more broadly for all Medicare beneficiaries (including those whose entire stay is classified as observation) and to count all time spent in the hospital towards satisfying the three-day inpatient requirement for coverage of subsequent nursing facility care.
The Center is pleased that the proposed rule brings Medicare beneficiaries one step closer to getting a fair opportunity to appeal if they are reclassified from inpatient to observation status. The period for public comments on the rule closed in February 2024, and we urge CMS to finalize the rule as soon as possible and implement it immediately. Class members have been without recourse for too long. They deserve their appeal rights, right away.
- Read comments submitted by the coalition of advocacy organizations here.
- Read detailed comments submitted by class counsel in Alexander v. Azar here.
More information for beneficiaries who think they may be members of the class can be found in the Center for Medicare Advocacy’s Frequently Asked Questions about the case here: https://medicareadvocacy.org/frequently-asked-questions-about-the-observation-status-court-decision/