CHA News

CMS Issues Final Rule on Appeals of Observation Status

What’s happening: The Centers for Medicare & Medicaid Services (CMS) has issued a final rule that establishes an appeals process for Medicare enrollees who are initially admitted as hospital inpatients but are subsequently reclassified as outpatient observation patients. 

What else to know: The new regulations create processes for both retrospective appeals and prospective appeals. CMS expects the retrospective appeals to become operational in January 2025 and the prospective appeals to become operational in mid-February 2025.  

The rule implements a 2020 court order resulting from Alexander v. Azar, a nationwide class action lawsuit.