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to thrive as they age

May 2, 2025

Avisery Alert: 

New Center of Medicare Advocacy Resources for Skilled Nursing Facility and Observation Status Appeals

The Center of Medicare Advocacy (CMA) released two resources that may be beneficial when counseling clients around denials of care. 

• This  skilled nursing facility (SNF) care appeal explainer centers on situations where a Medicare Advantage enrollee receives multiple denials of coverage during one stay. 

• The observation status appeal resource focuses on individuals who were initially assigned inpatient status during their hospital stay but then were switched to observation status. Due to a class action lawsuit, Medicare beneficiaries can now appeal any inpatient to observation status change going retrospectively back to 2009.  

Skilled Nursing Facility Appeals

The Center of Medicare Advocacy (CMA) became aware of complaints from Medicare Advantage (MA) enrollees receiving skilled nursing facility care who were sent multiple Notice of Non-Medical Coverage (NOMC) within the same episode of care. These MA enrollees had appealed the first NOMC they received but shortly after winning the appeal, the MA plan denied coverage a second time with similar language used in the first NOMC.

The Center of Medicare and Medicaid Services (CMS) has since changed the appeal process, presumably in response to the rise of complaints of multiple NOMCs. Now, when an individual requests an expedited appeal in response to a NONMC, the MA plan must provide a detailed explanation of why it is terminating coverage. If the MA plan issues another NONMC after the individual appeals the first one for the same episode of care, the MA plan must document detailed changes in the individual’s condition that justify the second denial of coverage. Overall, the change requires the MA plan to justify issuing several denials for the same episode of care.  

To learn more about how to appeal SNF terminations, click here to access the Center of Medicare Advocacy resources.  

Observation Status Appeals 

A Medicare beneficiary with inpatient status will have their hospital stay covered under Medicare Part A and if they are inpatient for 3 consecutive days or more, they qualify for Medicare covered SNF care after hospitalization. When a beneficiary is in observation status, that part of the hospital stay is covered under Part B and does not count as the 3 consecutive days need to qualify for Medicare covered SNF stay.

Recently a trend has emerged of individuals being switched from inpatient status to observation status, which can potentially cause coverage gaps for the individual. For example, if the individual’s status is switched to observation status without spending 3 consecutive days as an inpatient, it can threaten their access to SNF care. Additionally, if an individual with Part A only and no other health insurance is switched to observation status, they will be responsible for paying the full costs for the days spent in observation.  

Due to a class action lawsuit filed by the Center of Medicare Advocacy, Medicare beneficiaries initially admitted to the hospital with inpatient status but then placed in observation status can now appeal their observation status classification. Medicare beneficiaries can make both retrospective appeals and prospective appeals. Retrospective appeals apply to beneficiaries whose status changed from inpatient to observation from January 1, 2009, to February 13, 2025. Prospective appeals apply to beneficiaries admitted beginning February 14, 2025 who experience a reclassification from inpatient to observation status.  

For more information on how to file an appeal and other Center for Medicare Advocacy resources, click here.  

If you have any questions or need help counseling older adults and adults with disabilities on Medicare, Medicaid, or other health benefits programs, please reach out to Avisery at avisery@ageoptions.org or 708-628-3440.  

About Avisery

Avisery by AgeOptions provides tools and support to professionals serving older adults and people with disabilities, enabling them to help their clients access healthcare coverage that allows them to thrive as they age.