Press Releases



The Centers for Medicare & Medicaid Services (CMS) today issued final regulations providing Medicare beneficiaries with new appeal rights and financial protections when their Medicare+Choice health plan makes a decision to terminate coverage of certain services.

The notice and appeal procedures in the final regulation provide beneficiaries with immediate access to prompt independent review of health plan discharge decisions, while minimizing paperwork burdens on the plans or providers.

"It's important for Medicare beneficiaries to be able to obtain a fast, independent review when they disagree with their health plan's decision that services should end," said CMS Administrator Tom Scully. "We believe strongly that it should be easy, and fast, for beneficiaries to appeal decisions about their health care, whether they are enrolled in Medicare+Choice or traditional Medicare."

The final rule requires:

  • The right to an immediate review of a Medicare+Choice organization discharge decision by an independent review body, if the enrollee believes services should continue.
  • Advanced written notice to all Medicare+Choice enrollees at least two days before the termination of certain services, with instructions on how to obtain a detailed notice and file an appeal.
  • Upon request, a specific and detailed explanation of why services are either no longer medically necessary or are no longer covered from the health plan. The health plan also needs to describe any applicable Medicare coverage rule, Medicare+Choice policy, contract provision or rationale upon which the termination decision was based.

The new regulation completes a rulemaking process that was initiated through an agreement resulting from a national class action lawsuit challenging the appeals process in Medicare-contracting health plans (Grijalva v. Shalala). Many aspects of that lawsuit were resolved by the significant changes to the appeals procedures in regulations issued in 1998, and the case was settled in August 2000. In the settlement agreement, CMS agreed to propose regulations containing new appeal rights for beneficiaries enrolled in a Medicare+Choice plan.

The proposed rule, issued in January 2001, would have required Medicare+Choice organizations to give an enrollee four days written notice before terminating pre-authorized care from a home health agency (HHA), skilled nursing home facility (SNF), or comprehensive outpatient rehabilitation facility (CORF). In response to comments from a broad spectrum of stakeholders indicating that four days was too far in advance to predict when the need for coverage would end, the final regulation provides for advance notice of two days. CMS believes that a two-day minimum for the advance notice requirement is a more appropriate and realistic approach.

In addition, the final rule requires Medicare+Choice organizations to provide detailed discharge notices only in those situations where enrollees indicate dissatisfaction with the health plan’s decision. All Medicare beneficiaries who are treated in a hospital will continue to receive generic notices upon admission that will inform them of their appeal rights, but only those beneficiaries that disagree with the decision to be discharged must be issued a detailed written notice of noncoverage one day before their hospital coverage ends. If an appeal is filed, beneficiaries remain entitled to continuation of coverage for their hospital stay until the quality improvement organization renders a decision.

The final regulation will be published in the Federal Register on April 4, 2003.