The Center for Medicare Advocacy and Justice in Aging invite organizations to sign on to a comment letter responding to CMS’s proposed rule implementing appeal rights for Medicare beneficiaries who are admitted to hospitals as inpatients and subsequently reclassified as outpatients receiving observation services. The letter supports the general approach to the retrospective and prospective appeals processes and urges CMS to finalize and implement the rule as soon as possible. We also recommend allowing more time to request retrospective appeals, providing additional guidance around submitting medical records, and engaging in more education to beneficiaries about the new appeals process.
This rulemaking implements the Court’s order in the nationwide class action, 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). In March 2020, the U.S. District Court in Hartford, Connecticut issued a decision concluding that Medicare beneficiaries whose hospital classification is changed from inpatient to outpatient receiving observation services have the right to appeal that decision to Medicare and a chance to receive certain types of coverage, or to receive reimbursement from Medicare for certain noncovered services resulting from that change. Although the actual hospital services received are typically indistinguishable to beneficiaries under either classification, the distinction between designation as an inpatient (Part A coverage) versus outpatient (Part B coverage) can and has resulted in devastating financial consequences for Medicare beneficiaries. For example, many Medicare beneficiaries who were reclassified as outpatient have had to either pay thousands of dollars out of pocket for required skilled nursing facility (SNF) care or forgo it altogether. The Center for Medicare Advocacy, Justice in Aging, and pro bono partner Wilson Sonsini Goodrich & Rosati represented the plaintiffs in this lengthy litigation. See the Center for Medicare Advocacy’s Frequently Asked Questions webpage for more information about the case and outpatient observation status.
A. Bers, February 8, 2024