(c) Notice of the Council's action.

1. (1) After it has reviewed all the evidence in the administrative record and any additional evidence received, subject to the limitations on consideration of additional evidence in § 405.1122, the Council makes a decision or remands the case to an ALJ or attorney adjudicator.
2. (2) The Council may adopt, modify, or reverse the ALJ's or attorney adjudicator's decision or recommended decision.

3. (3) Notice of the Council's decision or remand order is issued to the eligible party (or the party's representative).

   1. (i) In the case of a modification or reversal of the ALJ's or attorney adjudicator's decision that is favorable to the eligible party, the Council's decision includes information regarding the effect of such decision, including, as applicable, a statement about the obligation of the SNF to refund any amounts collected from the beneficiary for the covered SNF services, and that the SNF may then submit a new claim(s) for services covered under Part A in order to determine the amount of benefits due.
   2. (ii) If the appeal involves a beneficiary not enrolled in the Supplementary Medical Insurance program (Medicare Part B) at the time of the beneficiary's hospitalization, a modification or reversal of the ALJ's or attorney adjudicator's decision that is favorable to the eligible party with respect to hospital services also includes a statement about the obligation of the hospital to refund any amounts collected for the outpatient hospital services, and that the hospital may then submit a new claim for covered inpatient hospital services in order to determine the amount of benefits due.

   3. (iii)

      1. (A) If the Council adopts or modifies an ALJ or attorney adjudicator decision that is unfavorable or partially favorable to the eligible party, the decision includes information about the procedures for filing a request for judicial review under § 405.1136, including information regarding the amount in controversy requirement in § 405.936(c).
      2. (B) A partially favorable decision issued by the Council refers to a determination that the inpatient admission satisfied the relevant criteria for Part A coverage but the SNF services did not satisfy the relevant criteria for Part A coverage.

4. (4) Notice of a Council decision, favorable or partially favorable to the eligible party, that modifies or reverses the decision or recommended decision by an ALJ or attorney adjudicator, or a remand order that is favorable to the eligible party, is issued to the SNF, as applicable, and to the hospital in the case of an appeal filed by, or on behalf of, a beneficiary not enrolled in the Supplementary Medical Insurance program (Medicare Part B) at the time of hospitalization.

   1. (i)

      1. (A) Notice issued to the SNF includes information regarding the effect of such decision, including, as applicable, a statement explaining that the SNF must refund any payments collected from the beneficiary for the covered SNF services, and that the SNF may then submit a new claim(s) to determine the amount of benefits due for the covered services.
      2. (B) A decision that is partially favorable to the eligible party is sent to the SNF and explains the reason the hospital admission satisfied the relevant criteria for Part A coverage at the time the services were furnished, the reason the SNF services did not satisfy the relevant criteria for Part A coverage and explains that the decision is being sent for informational purposes only.
   2. (ii) Notice issued to a hospital (in the case of an appeal filed by, or on behalf of, a beneficiary not enrolled in the Supplementary Medical Insurance program (Medicare Part B) at the time of hospitalization) includes information regarding the effect of such decision, including a statement explaining that the hospital must refund any payments collected for the outpatient hospital services, and that the hospital may then submit a new Part A inpatient claim in order to determine the amount of benefits due for covered services.
5. (5) The timeframe within which notices must be sent under this paragraph are determined under the provisions in § 405.1100.

(d) Effect of a favorable Council decision.

1. (1)

   1. (i) If the Council issues a decision that the beneficiary's inpatient admission satisfied the relevant criteria for Part A coverage and the hospital's decision to change the inpatient admission to outpatient receiving observation services was therefore erroneous, the beneficiary's reclassification as an outpatient is disregarded for the purposes of determining Part A benefits, including both Part A hospital coverage and Part A SNF coverage, if applicable.
   2. (ii) For the purposes of effectuating a favorable decision by the Council, unless a Part A claim is submitted by a hospital, any claims previously submitted for outpatient hospital services and payments made for such services (including any applicable deductible and coinsurance amounts) are not reopened or revised by the MAC, and payment, as applicable, for covered SNF services may be made by the MAC to the SNF without regard to the hospital claim.

2. (2) In order to determine Part A benefits to be paid and to make payment for covered services as a result of a favorable decision, as applicable—

   1. (i) The SNF, that furnished services to the beneficiary must refund payments previously collected from the beneficiary for the covered services and may then submit a Part A claim(s) for such services within 365 calendar days of receipt of the notice of a favorable decision;
   2. (ii) In the case of a beneficiary not enrolled in the Supplementary Medical Insurance program (Medicare Part B) at the time of the beneficiary's hospitalization, the hospital that furnished services must refund any payments collected for the outpatient hospital services. After the refund is issued, the hospital may then submit a Part A inpatient claim for such services within 365 calendar days of receipt of the notice of a favorable decision;
   3. (iii) In the case of a beneficiary enrolled in the Supplementary Medical Insurance program (Medicare Part B) at the time of the beneficiary's hospitalization, the hospital that furnished services must refund any payments collected for the outpatient hospital services only if the hospital chooses to submit a Part A inpatient claim for such services. The deadline for submitting a Part A claim for such services is 365 calendar days after receipt of the notice of a favorable decision, and the hospital must refund any payments collected for the outpatient services before submitting the Part A inpatient claim.
3. (3) The hospital, and as applicable, the SNF, must comply with all applicable provisions regarding charges to the beneficiary for covered services, including but not limited to relevant provisions in part 489 subparts B through D of this chapter.
4. (4) A favorable Council decision is considered final and binding unless it is reopened and revised under the provisions of §§ 405.980 through 405.986. The provisions regarding reopening of a Council decision in § 405.980(d) and (e) apply in the same manner to favorable Council decisions issued under this section.
5. (5) The notice of a favorable decision issued to a hospital and, as applicable, notice of a favorable or partially favorable decision issued to SNF does not convey party status to such provider.

(e) Effect of an unfavorable or partially favorable Appeals Council decision.

1. (1) An unfavorable or partially favorable Appeals Council decision is considered final and binding unless it is reopened and revised under the provisions of § 405.980(d) or (e), or a Federal district court issues a decision modifying the Council's decision.
2. (2) The provisions regarding reopening of an Appeals Council decision in § 405.980(d) and (e) apply in the same manner to unfavorable and partially favorable decisions issued under this section.

(f) Judicial review.

1. (1) An eligible party (or the party's representative) dissatisfied with a final and binding decision under paragraph (e) of this section who satisfies the amount in controversy requirement in § 405.936(c) may request judicial review in Federal district court under the procedures set forth in § 405.1136.
2. (2) An eligible party (or the party's representative) who satisfies the amount in controversy requirement in § 405.936(c) and the requirements to escalate a case from the Council in § 405.1132 may request judicial review in Federal district court under the procedures set forth in § 405.1136.