FY 2025 Proposed New Rules and Outrageous Appeal Process

FY 2025 Proposed New Rules and Outrageous Appeal Process

It’s April and that means it’s time for the fiscal year 2025 proposed rules to start appearing. But the Centers for Medicare & Medicaid Services (CMS) this year jumped the gun and released the proposed rules for inpatient rehab, inpatient psych, hospice and skilled nursing facilities (SNFs) at the end of March. I found one proposal worth noting.

CMS is asking for comments on the hospice benefit and potential additional payment for high-cost palliative care services. This could encompass services such as chemotherapy, radiation therapy, dialysis and blood transfusions but only when used to treat symptoms and not as part of an active treatment for the patient’s terminal illness. Of course, whenever there are additional payments being proposed, the criteria will need to be carefully developed to ensure the purpose of the treatment is truly palliation and not with a curative intent or, of course, for financial reasons.

For the other rules, there is nothing really of interest to this audience. Of course, CMS does make the usual payment adjustments every year but as I have said in the past, our job is to do what’s right, and the payment will fall where it does.

And before you ask, no, the skilled nursing facility rule does not mention the three-day rule to access the part A benefit.

I know we all continue to hate it, as I would bet CMS staffers do too, but that’s all on Congress to fix. I will note that the Center for Medicare Advocacy and others continue to advocate to get observation days to count to the three days for SNF access but we all know that’s not the fix that is needed.

Congress needs to allow Part A SNF access for any patient who meets the Medicare criteria for SNF care. But don’t hold your breath. Many of us hoped that the lack of abuse of the waiver of the requirement during the COVID-19 public health emergency would convince the decision-makers that we can be trusted but so far, no luck.

Moving on, I was recently made aware of one of the most onerous appeals processes I have ever seen. The process was developed for appealing traditional Medicaid denials in a certain southern state. In order for this state agency to accept an appeal, the provider must submit the complete medical record, regardless of the issue. Now maybe that’s not so bad but the medical record must be accompanied by a signed and notarized statement from the provider’s Custodian of Records who must first certify that they are “of sound mind, capable of making this affidavit, and personally acquainted with the facts stated,” and then attest that the records are the original or an exact copy and that no other documents exist.


The Custodian of Records, often called the medical records clerk, simply prepares the medical records, and sends them; they have no knowledge of the facts of the case or the reason for the denial. This is wholly inappropriate, and I would wonder if a release of information person would actually sign this.

In addition, the appeal must include a complete copy of the decision letter, and “not just one page,” whatever that means. You would think the agency would maintain records of their denials so as long as they have the first page, which lists the patient demographics, they could reference their own files. They also state that the appeal must specify that it is a request an appeal review of an “Office of Inspector General Utilization Review Unit decision” and that any generic reference to the agency will not be accepted and the appeal will be rejected.

Just imagine being so ashamed of the quality of work produced by your audit team that you have to develop an appeal process so outrageous that most providers will simply write off the denial and you won’t have to try to defend your staff’s inappropriate denials.

And by the way, this agency may want to do a little better job keeping track of the medical records being submitted by providers as I have heard they have been known to respond to appeals with “we have not received the records.”

When the provider has proof that the records were submitted and received by you and yet you claim not to have them, that’s a HIPAA breach reportable to the Office of Civil Rights. In this case though I am sure the providers would be more than happy to fill out the paperwork to report the breach for you.

In case you have trouble accessing the breach self-reporting page, the link is https://www.hhs.gov/hipaa/for-professionals/breach-notification/breach-reporting/index.html.

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Ronald Hirsch, MD, FACP, ACPA-C, CHCQM, CHRI

Ronald Hirsch, MD, is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, and the National Association of Healthcare Revenue Integrity, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays. The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

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