On October 11th, the Centers for Medicare & Medicaid Services (CMS) issued a final rule establishing a new Medicare appeals process for Medicare beneficiaries who are initially admitted to a hospital as inpatients but later reclassified as outpatients receiving observation services.
This rule is a result of the class-action lawsuit that sought to establish appeal rights for such patients. While the court initially ruled against automatic appeal rights, it mandated the creation of additional appeals processes for affected beneficiaries. This new rule will have a significant impact on protecting a subset of beneficiaries from coverage denials due to hospital reclassifications.
The lawsuit filed in 2011 highlighted a critical issue in the Medicare appeals process. It addressed Medicare’s lack of clear appeals rights for patients whose hospital status was changed from inpatient to outpatient under observation services. This reclassification can lead to the denial of Medicare Part A coverage for hospital stays and skilled nursing facility (SNF) care, leaving patients with substantial unexpected costs.
While Medicare strives to protect its beneficiaries, this ruling underscores the importance of a robust Medicare appeals process. This process allows patients and their healthcare providers to challenge such decisions, ensuring fair and accurate coverage determinations.
By understanding the Medicare appeals process and utilizing it effectively, patients can protect their rights and access the care they need.
In March 2020, the District Court of Connecticut ruled that beneficiaries were not entitled to automatic appeal rights, but directed the Secretary of the U.S. Department of Health and Human Services (HHS) to establish appeals processes for a specific class of beneficiaries.
Who is Eligible for the Medicare Appeal Process?
Medicare beneficiaries may be eligible to appeal if they meet the following criteria:
- Hospital Inpatient Status: They were or will be formally admitted to a hospital as an inpatient.
- Reclassification as Outpatient: They were or will be subsequently reclassified by the hospital as an outpatient receiving observation services.
- Medicare Outpatient Observation Notice (MOON): They have received or will receive a MOON indicating that the observation services are not covered under Medicare Part A.
- Part B Enrollment or Length of Stay:
- They were not enrolled in Medicare Part B at the time of hospitalization.
- Or, they stayed in the hospital for three or more consecutive days but were classified as inpatients for fewer than three days, unless more than 30 days have passed without admission to a skilled nursing facility (SNF) after the hospital stay.
Beneficiaries who pursued an administrative appeal and received a final decision before September 4, 2011, are not eligible for this new appeals process. The court ruled that this group was denied due process and ordered the creation of a new appeals framework specifically for them.
New Appeal Options for Medicare Beneficiaries
Medicare has introduced new Medicare appeal processes to help beneficiaries who believe they were incorrectly classified as outpatients during a hospital stay. These changes could impact their eligibility for Medicare Part A benefits, including hospital and skilled nursing facility (SNF) coverage.
Expedited Appeals for Inpatient Stays
- While Still in the Hospital: Beneficiaries can now file an expedited appeal with a BFCC-QIO while still hospitalized.
- Quick Review: The BFCC-QIO will review the patient’s medical records within one day to determine if the inpatient stay met Medicare Part A coverage criteria.
- Impact on SNF Eligibility: This is crucial for beneficiaries who stayed in the hospital for three or more days but were classified as outpatients for fewer than three days, potentially affecting their SNF eligibility.
Standard Appeals for After-Discharge Challenges
- Post-Discharge Appeal: For beneficiaries who don’t appeal while in the hospital, a standard Medicare appeals process is available.
- Process Timeline: This process allows beneficiaries to challenge reclassification after discharge, following the processing of the hospital’s Part B outpatient claim. The review process is similar to the expedited appeal but with extended timelines.
Retrospective Appeals for Past Hospital Stays
- Looking Back: CMS has also introduced a retrospective process for beneficiaries with hospital admissions as far back as January 1, 2009.
- Eligibility Criteria: Beneficiaries must demonstrate that their inpatient stay met Medicare Part A coverage criteria.
- Appeal Process: Once eligibility is confirmed, the appeals will follow Medicare’s standard five-level claim appeals procedure.
If a beneficiary successfully appeals their reclassification, their outpatient status will be disregarded for determining Part A benefits. Additionally, Medicare is required to provide clear and effective notice of appeal rights to ensure beneficiaries are aware of their options.
Medicare Appeals: A Vital Tool for Medical Billing Companies
The Medicare appeals process is a cornerstone for medical billing companies. By effectively navigating this process, they can significantly impact the financial health of healthcare providers.
Why is it important?
- Maximizing Reimbursement: Medicare regulations are complex, and claim denials or underpayments are common. By appealing these decisions, billing companies can secure the full reimbursement healthcare providers deserve for services rendered.
- Ensuring Compliance: Understanding and adhering to Medicare policies is crucial. The appeals process allows companies to identify and correct errors or inconsistencies in denied claims, maintaining compliance and reducing the risk of penalties.
- Streamlining Operations: By analyzing denial patterns, billing companies can proactively address recurring issues, minimizing future denials and streamlining their operations.
- Improving Patient Satisfaction: Timely and accurate billing is essential for patient satisfaction. By resolving claim disputes promptly, billing companies can prevent unnecessary financial stress for patients.
How does it work?
Medical billing companies carefully review denied claims, identifying errors in coding, documentation, or adherence to Medicare policies. They then systematically build a strong appeal case, presenting evidence to support the claim’s validity. Successful appeals not only increase revenue but also strengthen the relationship between healthcare providers and payers.