(a) Scope and basis. The provisions in §§ 405.931 through 405.938—

(1) Implement a federal district court order requiring appeal rights for hospital stays on or after January 1, 2009, for a specified class of beneficiaries under certain conditions (defined in § 405.931(b)) who were admitted to a hospital as inpatients, but were subsequently reclassified by the hospital as outpatients receiving observation services; and

(2) Apply to retrospective appeals, that is, appeals for hospital outpatient services, and as applicable, post-hospital extended care services in a skilled nursing facility (SNF services), furnished to eligible parties as defined in paragraph (b) of this section before the implementation of the prospective appeal process set forth in §§ 405.1210 through 405.1212.

(b) Definitions. For the purposes of the appeals conducted under §§ 405.931 through 405.938, the following definitions apply:

Eligible party means a beneficiary who, on or after January 1, 2009, meets the following criteria, and is, thus, eligible to request an appeal under §§ 405.931 through 405.938:

(i) Was formally admitted as a hospital inpatient.

(ii) While in the hospital was subsequently reclassified as an outpatient receiving observation services (as defined in § 405.931(h)).

(iii) Has received an initial determination (as defined in § 405.920) or a Medicare Outpatient Observation Notice (MOON) (as described in § 489.20(y)) indicating that the observation services are not covered under Medicare Part A.

(iv)(A) Was not enrolled in the Supplementary Medical Insurance program (that is, Medicare Part B coverage) at the time of beneficiary's hospitalization; or

(B) Stayed at the hospital for 3 or more consecutive days but was designated as an inpatient for fewer than 3 days, unless more than 30 calendar days has passed after the hospital stay without the beneficiary's having been admitted to a SNF.

(v) Medicare beneficiaries who meet the requirements of the paragraph (iv)(A) or (B) of this definition but who pursued an administrative appeal and received a final decision of the Secretary before September 4, 2011, are excluded from the definition of an eligible party.

Eligibility contractor means the contractor who meets all of the following:

(i) Is identified on the Medicare.gov website for accepting appeal requests.

(ii) Receives appeal requests and makes determinations regarding eligibility for the appeal under §§ 405.931 through 405.938.

(iii) Issues notices of eligibility.

(iv) Refers valid appeal requests to the processing contractor for a decision on the merits of the appeal.

Processing contractor means the contractor responsible for conducting the first-level appeal and issuing a decision on the merits of the appeal. Appeals under § 405.932 are conducted by the MAC who, at the time of the referral of the request for appeal under § 405.932(d)(2), has jurisdiction over claims submitted by the hospital where the eligible party received the services at issue.

(c) Party to an appeal. For the purposes of the appeals conducted under §§ 405.931 through 405.938, an eligible party is the only party to the appeal. The provisions of § 405.906 do not apply to appeals processed under these provisions, and the provider that furnished services to an eligible party may not file a request for an appeal and is not considered a party to any appeal decision or determination.

(d) Authorized representatives, appointed representatives, or representatives of a deceased eligible party. For the purposes of appeals conducted under §§ 405.931 through 405.938:

(1) The provisions of § 405.910 apply to an eligible party appointing a representative to assist in such appeal, as appropriate, except as follows:

(i) A provider of services who furnished items or services to a beneficiary whose claims are the subject of an appeal under the provisions of §§ 405.931 through 405.938 is prohibited from representing the beneficiary or eligible party in such appeal.

(ii) [Reserved]

(2) An authorized representative (as defined in § 405.902) may act on behalf of an eligible party and has all of the same rights and responsibilities of an eligible party throughout the appeals process.

(3) The provisions of § 405.906(a)(1) apply to a deceased eligible party in the same manner in which such provisions apply to a deceased beneficiary.

(4) The provisions of § 405.906(c) do not apply.

(5) A beneficiary who is an eligible party is considered unrepresented if the beneficiary meets any of the following:

(i) Has not appointed a representative under § 405.910.

(ii) Has an authorized representative as defined in § 405.902.

(iii) Has appointed as its representative a member of the beneficiary's family, a legal guardian, or an individual who routinely acts on behalf of the beneficiary, such as a family member or friend who has a power of attorney.

(iv) Is deceased but met the conditions for an eligible party in paragraph (b)(1) of this section and the appeal is filed by an individual who meets the conditions set forth in § 405.906(a)(1).

(e) Prohibition on assignment of appeal rights. For the purposes of the appeals conducted under §§ 405.931 through 405.938, an eligible party may not assign appeal rights to a provider under the provisions of § 405.912.

(f) Date of receipt of a notice or decision. For the purposes of the appeals conducted under §§ 405.931 through 405.938, the date of receipt of a notice or decision sent by the eligibility contractor, processing contractor or other appeals adjudicator is presumed to be 5 calendar days following the date on the notice unless there is evidence to the contrary.

(g) Three or more consecutive days. For the purposes of the appeals conducted under §§ 405.931 through 405.938, when determining if a beneficiary is an eligible party and for the purposes of determining coverage of SNF services under section 1861 of the Act, inpatient hospital days are counted in accordance with § 409.30, that is, a patient must have a qualifying inpatient stay of at least 3 consecutive calendar days starting with the admission day but not counting the discharge day.

(h) Outpatient receiving observation services. For the purposes of appeals conducted under §§ 405.931 through 405.938 when determining if a beneficiary is an eligible party, a beneficiary is considered an outpatient receiving observation services when the hospital changes beneficiary's status from inpatient to outpatient while the beneficiary is in the hospital and the beneficiary subsequently receives observation services following a valid order for such services.

(i) Conclusive effect of a Part A coverage determination. For the purposes of appeals under §§ 405.931 through 405.938, the determination with respect to coverage under Part A is conclusive and binding with respect to the services furnished and must be applied to any existing appeals with respect to coverage and payment for hospital services under Part B and SNF services (as applicable).