CMS Pub. 100-04, ch. 1, § 150.4

Expedited Determinations Based on Medicare Change of Status

Notifications (MCSNs)

(Rev. 13026, Issued: 12-27-24, Effective: 10-11-24 , Implementation: 02-15- 25)

This section provides claims processing instructions to implement an expedited hospital

status change appeals process required by final rule, CMS-4204-F.The resulting

regulations are located at 42 CFR Part 405.1210 through 405.1212.

Expedited hospital status change appeals are afforded to certain beneficiaries in Original

Medicare only who were initially admitted to a hospital as an inpatient by a physician but

whose status during their stay was changed to an outpatient receiving observation

services by the hospital’s utilization review committee (URC) (thereby effectively

denying Part A coverage for their hospital stay), and meet other conditions specified in

the court order. Regulations at 42 CFR 405.1210(b) require hospitals to notify

beneficiaries of their right to pursue an appeal regarding the decision to reclassify the

beneficiary from an inpatient to an outpatient receiving observation services. The

Medicare Change of Status Notice (CMS-10868) is the standardized notice to satisfy the

notification requirement.

After receipt of the MCSN, eligible beneficiaries are given the opportunity to appeal, and

may argue that their inpatient admission satisfied the relevant criteria for Part A coverage

and that the hospital URC’s determination to reclassify the beneficiary as an outpatient

receiving observation services was therefore erroneous. The change in status from

inpatient to outpatient may also affect coverage of the beneficiary’s post-hospital

extended care services furnished in a skilled nursing facility (SNF).

A. QIO Role

Once an eligible beneficiary has requested an appeal, the QIO reviews the records from

the hospital relative to the change in status, and verifies that the provider has given valid

notice. The QIO is responsible for establishing contact with the provider, so that the

beneficiary’s medical records can used in making a determination, although QIOs can

still make such decisions even if records are not provided. The QIO makes a decision on

coverage in answer to the beneficiary’s request for review of their change in status,

relaying this decision back to the beneficiary or their representative, as well as the

hospital. If the beneficiary does not agree with the QIO determination, they may request

that the QIO conduct a reconsideration.

B. A/B MAC (A) Role

A/B MACs (A) support beneficiaries and providers through an awareness of the

expedited determination process and by performing routine duties potentially affected by

this process--liability notice oversight, claims processing and medical review.

A/B MAC (A) medical review should never repeat or contradict the results of QIO

review regarding the change of status of the hospital claim, since this would be

duplicative and QIO decisions are binding. But the scope of these QIO decisions is

limited to the change in status, and medical review examines a much broader range of

potential issues and periods of care. For example, a monthly SNF claim may follow a

change of status reviewed by a QIO, but it also contains other days of billing that are

subject to additional coverage criteria. Other issues not considered by the QIO may still

be subject to medical review.