SYSTEM CHANGES PROMPT MEDICARE PROVIDERS TO PAY ATTENTION TO APPEALS
By Amy Leopard
The Centers for Medicare and Medicaid Services’ final rule for the new Medicare claims appeals system substantially revises appeals rights for health care providers. At the same time, the administrative law judge appeals function is now being transferred from local Social Security offices and consolidated in a new Medicare administrative law judge court, with the Midwestern Regional Office in downtown Cleveland.
These changes could mean considerable financial consequences for Part A providers (hospitals, home health agencies, nursing homes, etc.) and Part B providers (physicians and medical equipment and supply companies), which typically derive nearly half their revenues from Medicare.
Here are 10 suggestions for providers to better manage appeals of Medicare denials:
Manage denials. In a recent report, the Government Accounting Office said only 5 million of 158 million claims denied by Medicare were appealed. One advantage under the new rules is that Medicare cannot recoup overpayments until an independent decision has been made on carrier and intermediary reconsiderations. Given the favorable track record on appeals and tightened decision timeframes, providers proactively should manage Medicare denials and consider filing timely appeals.
Pursue Appeals. Providers may appeal to the new qualified independent contractors, which are independent organizations the Centers for Medicare and Medicaid Services has engaged to decide the appeals that Part B hearing officers previously decided. Appeals to qualified contractors must be filed within 180 days of an unfavorable reconsideration.
Appreciate the type of hearing afforded. The independent contractor will perform an “on-the-record” review based on the documentation and any briefs or position statements the provider submits. For Part A providers, this is an additional stage in the claims appeal process. For Part B providers, this review will replace the previous opportunity to appear in person before a fair hearing officer.
Identify legal arguments early. Under the new rule, an independent contractor appeal request should include the basis for the appeal and all evidence and allegations of fact and law. Each time a provider submits additional evidence, the contractor gets an additional 14 days to decide the case, extending the normal 60-day timeframe. Providers must organize their appeals and consider all possible defenses and supporting materials needed at the earliest possible date.
Organize evidence early. Providers should prepare expert medical opinions and scientific literature to support the appeal as soon as they understand the basis for the denial. Under the new rule, medical necessity decisions at the qualified independent contractor level require a review of the medical evidence in the record by physicians for physician cases, and by appropriate health care professionals for other cases.
Appeal to an administrative law judge. Unfavorable independent contractor decisions can be appealed to an administrative law judge, an attorney who will make a decision without regard to what has been decided before. Administrative law judge appeals must be filed within 60 days of an unfavorable independent contractor decision.
Develop a strategy for testimony. Administrative law judges often will use video teleconferencing in lieu of an in-person hearing. Providers can request in-person hearings for special circumstances, such as the provider’s proximity to a law judge’s office or when the appeal raises complex and challenging issues. In Cleveland, the personal administrative law judge hearing approach is advisable when in-person witness testimony might help to explain medical records better or assist with technical issues.
Prepare for participation. When qualified independent contractors organize completed case files to send to the administrative law judges, they can request that the Centers for Medicare and Medicaid Services participate in provider appeals. Unlike the old system, the Medicare and its contractors can choose to participate in the appeal. The Centers for Medicare and Medicaid Services can file briefs or testify by video teleconferencing. The effective cross-examination of adverse witnesses now needs special attention.
Appreciate which rules apply. The new rule establishes a hierarchy of the Centers for Medicare and Medicaid Service policies that bind the decisionmaker at each level. Local medical review policies and other informal guidance are not binding on administrative law judges, but must be given substantial deference or, if not followed, explained in the decision. Providers should give the decisionmaker a coherent and persuasive reason to disregard any policies that should not be applied, preferably before the records are reviewed.
Understand there will be confusion. The changes in appeals procedures, independent contractor functions, and new administrative law judge court system are a work in progress. Implementing changes of this magnitude always entails a transition period during which there will be confusion, especially with the number of agencies involved.
Ms. Leopard is a Partner in the Health Care practice area of the Cleveland law firm of Walter & Haverfield LLP.
Published in Crain’s Cleveland Business, January 9-15, 2006, at 14
