Proposed Medicare Rule Allows Patients to Appeal Outpatient Redesignation that Hampers SNF Benefit

The Centers for Medicare & Medicaid Services (CMS) recently issued a proposed rule that would establish an appeal process for beneficiaries with Original Medicare who are admitted to a hospital as an inpatient but later reclassified as an outpatient receiving observation services. The reclassification can endanger skilled nursing facility (SNF) benefits for patients, Skilled Nursing News reported.

The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) supports the proposed rule.

“Medicare beneficiaries should have the right to appeal and ensure they are not denied their needed skilled nursing benefits,” an AHCA/NCAL spokesperson told Skilled Nursing News in an email. “While this proposed rule will certainly be helpful, we urge Congress to resolve this issue permanently by eliminating the 3-day-stay requirement or recognizing observation stays as qualifying stays.”

The Improving Access to Medicare Coverage Act (HR 5138), which is endorsed by the AHCA/NCAL and dozens of other provider and beneficiary advocate groups, would require time in hospital observation to count toward the 3-day qualifying hospital stay requirement to access the Medicare Part A skilled nursing facility benefit.

As it stands, the proposed rule would create three types of appeals processes — expedited, standard, and retrospective — for eligible beneficiaries admitted as inpatients but subsequently designated outpatients receiving observation services.

The proposed rule stems from a nationwide class action case filed in 2011 to grant Medicare beneficiaries the right to a hearing to challenge their placement as outpatients receiving observation services, CMS stated.

References

Grebbin S. New CMS Medicare appeals proposal falls short of addressing nursing homes’ 3-day stay issue. Skilled Nursing News. January 2, 2024. Accessed January 4, 2024. https://skillednursingnews.com/2024/01/new-cms-medicare-appeals-proposal-falls-short-of-addressing-nursing-homes-3-day-stay-issue/

Centers for Medicare & Medicaid Services. Medicare Appeal Rights for Certain Changes in Patient Status Proposed Rule (CMS-4204-P) Fact Sheet. Published December 21, 2023. Accessed January 4, 2024. www.cms.gov/files/document/medicare-appeal-rights-certain-changes-patient-status-factsheet.pdf