Medicare Change of Status Notice

Attention: Hospitals, including CAHs and other providers billing Medicare for inpatient services.

The Medicare Change of Status Notice (MCSN) became effective 10/11/2024 and implemented 2/15/2025. Hospitals, including CAHs, and any other facilities providing an inpatient level of care must issue the MCSN (CMS-10868) when an eligible Medicare beneficiary, after formally being admitted as an inpatient, is reclassified from an inpatient to an outpatient receiving observation services.

You must deliver the notice to all beneficiaries eligible for the expedited determination process while the beneficiary is still an inpatient to notify them of their right to appeal their reclassification (status change from an inpatient to an outpatient receiving observation services) with their BFCC-QIO.

Note: The term “beneficiary” means either beneficiary or representative when the representative is acting on the beneficiary’s behalf.

A beneficiary is eligible for the expedited determination process when such reclassification occurs and when one of the following applies:

The beneficiary has Medicare Part B and the hospital stay (or facility providing care at the inpatient hospital level) was at least three days or
The beneficiary does not have Medicare Part B (no three-day qualifying stay required)

Potential Impact on Post-Hospital Extended Care Services

The reclassification of the beneficiary’s status (from an inpatient to an outpatient receiving observation services) may also affect coverage of the beneficiary’s post-hospital extended care services furnished in a SNF. One of the qualifications for Medicare coverage in a SNF is that the beneficiary must have had a qualifying inpatient hospital stay of at least three consecutive days.

Hospitals/Facilities Affected

The requirement to issue an MCSN applies to any facility providing care at the inpatient hospital level. The MCSN must be issued whether that care is short-term or long-term, acute or non-acute, paid through a prospective payment system or other reimbursement basis, limited to specialty care, or when providing a broader spectrum of services. This definition includes CAHs.

MCSN Form (CMS-10868)

The OMB-approved standardized MCSN is available in English, Spanish and additional languages as they become available and may only be modified as per the instructions accompanying the FFS MCSN section of the CMS Beneficiary Notice Initiative (BNI) website. The MCSN must remain two pages; however, it can be two sides of one page or one side of two separate pages but do not condense it to one page.

You may include your business logo and contact information on the top of the MCSN but do not shift text from page one to page two to accommodate large logos, address headers, etc.

You may include information in the optional “Additional Information” section relevant to the beneficiary’s situation.

Timing

You must deliver the MCSN to all eligible patients as soon as possible, but no later than four hours prior to inpatient discharge. Eligible patients with Part B must reach their third day as a hospital inpatient before receiving the MCSN.

Delivery and Beneficiary Comprehension

You must ensure the beneficiary, or appointed/authorized representative, comprehends the notice. You must employ the usual procedures to ensure notice comprehension. Usual procedures may include, but are not limited to, the use of translators, interpreters, and assistive technologies. If a beneficiary is temporarily incapacitated and there is no appointed or authorized representative, a person (typically, a family member or close friend) whom the hospital has determined could reasonably represent the beneficiary, but who has not been named in any legally binding document, may be a representative for the purpose of receiving the MCSN. Such a representative should act in the beneficiary’s best interests and in a manner that is protective of the beneficiary and their rights. There should be no relevant conflict between the representative’s and the beneficiary’s interests.

In instances where the notice is delivered to a representative who has not been named in a legally binding document, you must annotate the MCSN with the name of the staff person initiating the contact, the name of the person contacted, and the date, time and method (in person or telephone) of the contact.

When issuing the notice to an appointed/authorized representative, the burden is on the hospital (facility providing care at the inpatient hospital level) to demonstrate that timely contact was attempted with the representative and that the notice was delivered.

Beneficiary Acknowledgement

You must ensure that the beneficiary or representative signs and dates the MCSN to demonstrate receipt of the notice and an understanding of its contents. You may issue the MCSN electronically and use assistive devices to obtain a signature.

You must give the beneficiary or their representative a paper copy of the MCSN that includes all of the required information.

You must retain the signed and dated MCSN in the beneficiary’s medical records.

Beneficiary Initiation of Expedited Review

The beneficiary, or authorized representation, who receives an MCSN and disagrees with the reclassification (status change from inpatient to outpatient receiving observation services) may request, by telephone or in writing, an expedited determination by the appropriate BFCC-QIO for the state where the services were provided. A timely request must be made prior to leaving the hospital while an untimely request can be made at any time after discharge.

The beneficiary, or authorized representative, must be available to answer questions or supply information requested by the BFCC-QIO. The beneficiary may, but is not required to, supply additional information to the BFCC-QIO that he or she believes is pertinent to the case.

A beneficiary who is dissatisfied with a QIO determination may request an expedited reconsideration by the BFCC-QIO.

Hospital/Facility Providing Care at Inpatient Hospital Level: Responsibility During Expedited Review

When you are notified by a BFCC-QIO of a beneficiary request for an expedited determination, you must provide the BFCC-QIO with a copy of the MCSN and medical records as soon as possible, but no later than noon of the day after BFCC-QIO notification. When requested, you must also furnish the beneficiary/representative with copies of all records submitted to the BFCC-QIO by close of business of the first day after the material is requested.

Hospital/Facility Providing Care at Inpatient Hospital Level: Billing

A hospital should not bill a beneficiary who has timely filed an expedited determination until the review process is complete. However, when the appeal request is untimely, the hospital may bill the beneficiary before this QIO process is complete.

When the QIO decision is to reverse a reclassification (status change from inpatient to outpatient receiving observation), you must bill the stay as an inpatient stay on TOB 011x and include:

Condition code C6 (Admission preauthorization) to indicate the QIO has authorized the admission but has not reviewed the services provided.
“MCSN” in the Remarks

Do not report indicators on claims related to issuance of the MCSN when:

The beneficiary did not request an expedited determination
The BFCC-QIO upholds the provider’s reclassification (change of the beneficiary’s status from inpatient to outpatient receiving observation services)
- Do not report condition code C4 (services denied) on the claim because the services are not denied but will be included on an outpatient claim

SNF and Swing Bed Billing

When billing for a SNF stay on TOB 021x or 018x where the three-day qualifying hospital stay was subject to a change of status review, SNFs and swing bed providers must include on the related claim:

Condition code C6
“MCSN” in the Remarks

This claim coding alerts us that the beneficiary’s inpatient status has already been subject to review and upheld by the QIO for the qualifying hospital stay dates reported in occurrence span code (OSC) 70.

Reminders

When applicable, the MCSN is required and is provided in addition to other required notices. Issuance of the MCSN does not change any of the requirements for other notices nor specific billing requirements. For example, HINNs, the MOON, and use of condition code 44 continue to be required when appliable.