As a result of the Center for Medicare Advocacy’s class action litigation, the Centers for Medicare and Medicaid Services (CMS) issued a final rule this week to establish appeals for hospital patients whose status is changed from inpatient to observation. 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 designation as “observation status.”
The Center for Medicare Advocacy and co-counsel Justice in Aging are thoroughly reviewing the final rule and expect to offer analysis as well as resources for beneficiaries and advocates about how to make use of the appeals before they become operational.
The final rule establishes appeals for Medicare beneficiaries who are class members in Alexander v. Azar, 613 F. Supp. 3d 559 (D. Conn. 2020), aff’d sub nom., Barrows v. Becerra, 24 F. 4th 116 (2d Cir. 2022). The new regulations create processes for both retrospective appeals and prospective appeals. The retrospective appeals are for class members who were denied the right to appeal in the past. Prospective appeals will be available on an ongoing basis for eligible beneficiaries who are still in the hospital. CMS has stated in status reports to the court that it expects the retrospective appeals to become operational in January 2025 and the prospective appeals to become operational in mid-February 2025. The Center is pleased that the long-awaited final rule has been released. It vindicates Medicare beneficiaries’ rights and brings them one step closer to getting a fair chance for medically necessary nursing home care when they are changed from inpatient to observation status in the hospital. The traditional Medicare program requires beneficiaries to be hospitalized for three consecutive days as inpatients before it will cover their stay in a nursing home.
The Center for Medicare Advocacy, Justice in Aging, and pro bono firm Wilson Sonsini Goodrich & Rosati won the trial in Alexander v. Azar in 2020 in federal district court in Hartford, Connecticut. The decision was upheld in its entirety by the U.S. Court of Appeals for the Second Circuit in 2022.
- Read the final rule at: https://www.govinfo.gov/content/pkg/FR-2024-10-15/pdf/2024-23195.pdf
- For more information about the class action, including information for people who think they may be members of the class, read the Frequently Asked Questions about the case: https://medicareadvocacy.org/frequently-asked-questions-about-the-observation-status-court-decision/
October 17, 2024 – A. Bers