Re: CMS-4024-FC — Medicare Program; Final Rule with Comment Period on Improvements to the Medicare+Choice Appeal and Grievance Procedures (68 Federal Register 16652, April 4, 2003)

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Tuesday, June 3rd 2003

Thomas A. Scully
The Centers for Medicare & Medicaid Services
Room 443-G, Hubert H. Humphrey Building
200 Independence Avenue, SW
Washington, DC 20201

Dear Mr. Scully:

On behalf of our nearly 5,000 member hospitals, health care systems, networks and other providers of care, the American Hospital Association (AHA) appreciates the opportunity to provide comments on the Centers for Medicare & Medicaid Services’ (CMS) final rule that would revise the Medicare+Choice (M+C) appeal and grievance procedures, especially the procedures for providing Medicare beneficiaries with notice of their appeal rights and for issuing discharge notices.  

The AHA commends and supports CMS’ decision to keep separate the discharge notice and the Important Message from Medicare that is provided to all Medicare beneficiaries (those enrolled in the traditional program as well as those enrolled under Medicare+Choice plans).  We particularly support the decision to require an individualized hospital discharge notice only in those cases where a beneficiary disagrees with a discharge decision, rather than requiring that all beneficiaries receive such notices as had been proposed in earlier regulations.  Finally, we support the decision to keep the responsibility for issuing discharge notices with the plans.  We appreciate the degree to which the rule reflects and accommodates many of the practical issues we discussed with your staff last year when we organized a meeting with them, other hospital association representatives and several hospital discharge planners.  The CMS data presented in the preamble confirm what we have known – the hospital discharge planning process works and few beneficiaries are surprised by or disagree with their hospital discharge date. 

That said, we believe that the language in Sec. 422.620 will make it difficult to resolve one of the more troublesome problems associated with discharge decisions for M+C plan enrollees.  That key problem occurs when the M+C plan makes a coverage decision limiting a continued hospital stay based on medical necessity but the attending physician does not agree that the patient is ready for discharge.  By requiring physician concurrence before a notice of non-coverage can be issued, the rule provides no way to trigger external review of the plan’s decision to terminate coverage contrary to the attending physician’s judgment.  The plan simply denies payment to the hospital for continued care.  A similar situation occurs when the plan indicates to the hospital that continued stay will not be covered, but does not or will not issue a discharge notice to trigger the review process.  Again, the plan simply denies payment to the hospital for a portion of the stay.  Furthermore, the requirement for physician concurrence before a noncoverage or termination of services notice can be issued applies only to the hospital setting, not to the other provider settings covered by this rule. 

We believe that the issue of plan payment for services and coverage decisions are one and the same.  When a plan denies payment for a continued hospital stay, it is making a coverage decision.  If it does so without issuing a discharge notice, it sidesteps the process designed to provide oversight of their medical necessity and coverage decisions.  And, because the Medicare+Choice program preempts state regulatory mechanisms related to coverage decisions and their appeals, this defect insulates plans from any effective oversight of those coverage decisions.  The AHA recommends that the rule and subsequent notice instructions be clarified to prohibit plans from terminating coverage for authorized hospital stays until the discharge date determined by the attending physician or at least until the day after the plan delivers a discharge notice to the beneficiary denying coverage for a continued stay.  Such a requirement would ensure that plan coverage decisions are made above board and are subject to intended oversight.  It would also protect providers from arbitrary plan actions against which they have no recourse.  We also recommend that CMS eliminate the requirement for physician concurrence before a notice can be issued, consistent with the model adopted for non-acute settings.

It is one thing for CMS to defer to plan-provider contracts the issue of who bears the cost of days spent in the appeal process.  But CMS should not provide a major loophole through which plans can deny payment for covered care by avoiding their obligation to issue a discharge notice.

Again, we appreciate the opportunity to provide comment on these provisions.  If you have any questions about these remarks, please feel free to contact me or Ellen Pryga, director, policy development, at (202) 626-2267 or  


Rick Pollack
Executive Vice President

cc: Brenda Aguilar
      Office of Management and Budget


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