Hospital stay denials

A hospital stay denial comes in three forms. The plan refuses to approve the admission. The plan says you no longer need to be in the hospital and will stop paying. Or the hospital says you were never formally admitted and were only under observation. All three are decided on the plan’s view of medical need and setting, and all three are time sensitive.

What this means

Job-based and individual plans.

• If the plan had approved a stay and then ends it early, that is a denial. The plan must give notice far enough ahead for you to appeal and get a decision before the benefit is reduced or ended, and non-grandfathered plans must provide continued coverage during the appeal on these terms.
• A claim is urgent if waiting could seriously jeopardize your life, health or ability to regain maximum function, or if a physician who knows your condition says it is. Urgent decisions are due within 72 hours.
• Denials about admission, health care setting, level of care and continued stay involve medical judgment, so they qualify for federal external review. Expedited external review is available after a final internal denial that concerns an admission, availability of care or continued stay, and for emergency services if you have not yet been discharged. You can ask for expedited external review at the same time as an expedited internal appeal.
• Childbirth. A plan may not limit a hospital stay for childbirth to less than 48 hours after a vaginal delivery or 96 hours after a cesarean section, unless the attending provider, in consultation with the mother, decides on earlier discharge.

Medicare and Medicare Advantage. The hospital must give you the Important Message from Medicare (Form CMS-10065) at or near admission and no later than 2 calendar days after admission, and a follow-up copy before you leave. You can ask the quality improvement organization (the Beneficiary and Family Centered Care Quality Improvement Organization, the reviewer Medicare uses) for an expedited review by phone or in writing no later than the day of discharge. The hospital then gives you a detailed notice by noon of the next day. The reviewer decides within one calendar day of having what it needs, and the hospital carries the burden of proof. If your request was on time, you are not responsible for the stay (other than normal coinsurance and deductible) until noon of the calendar day after you are told the decision. If you miss the deadline, a patient still in the hospital can ask at any time and a patient who has left can ask within 30 calendar days, but without the billing protection. Check the date on your notice, which controls. A Medicare Advantage plan must follow Original Medicare’s rules for inpatient admission.

Observation status. If a hospital formally admitted you as an inpatient and then reclassified you as an outpatient receiving observation, you can appeal the change if you had no Part B coverage at the time, or you stayed 3 or more consecutive days but were an inpatient for fewer than 3. The hospital must give you the Medicare Change of Status Notice (Form CMS-10868) as soon as possible and no later than 4 hours before release. Ask the reviewer before you are released. The reviewer decides within 1 calendar day, and the hospital may not bill you for the disputed services while a timely appeal is pending. If you were an outpatient under observation and never formally admitted, these appeal rights do not apply. The window for appeals of old stays closed on 2 January 2026.

What to do

1. Ask the hospital’s case manager what is happening. Ask who decided, what the plan said and the date coverage ends. (You or a family member.)
2. Ask your doctor to request a peer-to-peer call and to document why you need to stay. (Your doctor.)
3. Ask for an urgent appeal. Your doctor certifies the urgency. For Medicare, call the number on the notice for the fast review before you leave. (Your doctor and you.)
4. Ask for the plan’s criteria and your records. The clinical criteria request and the medical records request letters help. (You.)
5. Ask for external review at once if the internal appeal is denied and you are still in the hospital. (You.)
6. Appeal after discharge if you could not do it before. Employer and non-grandfathered individual plans must allow at least 180 days after you receive the denial. (You.)
7. Ask the hospital to hold the bill. See the guide on bills during an appeal. (You.)

What the plan may say, and what to say back

“You no longer meet inpatient criteria.” Ask for the criteria and for the clinical reasons. Ask your doctor to state in writing why discharge is unsafe or why more care is needed now.

“You were under observation, not admitted.” Ask the hospital for the notices you were given and the date and time your status changed. Compare them with the Medicare rules above.

The rule

A patient may ask the quality improvement organization for an expedited review of a hospital discharge no later than the day of discharge; the hospital bears the burden of proof. 42 Code of Federal Regulations (CFR) 405.1206

Watch for

• Leaving before you ask. For Medicare, the deadline is the day of discharge.
• Observation bills. Ask the hospital in writing how your status affects what you owe, and ask it to hold the bill while you appeal.
• Notice problems. Missing or late notices change your rights. Keep every paper you are handed.

What next

• Medicare fast appeals: the one-day clocks for discharges.
• Medicare observation status: what the change of status notice means.
• Get a fast decision: how urgent appeals work for other plans.
• Keep treatment going during an appeal: continued coverage rights.