The Proposed CMS Appeal Process Likely to Generate Minimal Impact



Following extended outpatient stays exceeding three days in hospitals under Part B, a cohort of Medicare beneficiaries initiated a class action lawsuit in 2010. Their aim was to reclaim expenses linked to their rehabilitation stays in skilled nursing facilities (SNFs) post-illness.

Around 2010, the Recovery Audit Contractor (RAC) program peaked, capitalizing on easy denials of inpatient admissions. Prior to this, vague regulations regarding inpatient admissions caused many hospitals to struggle with effective enforcement. The Centers for Medicare & Medicaid Services (CMS) reimbursed observation stays on a fee-for-service basis without limitations, prompting hospitals to categorize numerous patients as outpatients during their stays. This maneuver aimed to evade RAC denials but inadvertently restricted patient access to Medicare Part A coverage for SNF stays.

To counter prolonged outpatient stays, CMS introduced the Two-Midnight Rule in October 2013. This rule prohibited hospitals from keeping patients as outpatients for extensive periods without SNF benefit access. However, the fundamental issue—eliminating the three-day rule for SNF Part A access—remained unaddressed.


https://www.allzonems.com/new-cms-appeal-process-proposal-expected-to-have-low-impact/

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