Corporate Compliance

Note from the instructor: Medicare change processes, Part II: Medicare appeals

Medicare Insider, August 26, 2014

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This week’s note from the instructor is written by Judith L. Kares, JD, regulatory specialist for HCPro.  
 
Note from the instructor: Medicare change processes, Part II: Medicare appeals
 
This week we will continue our discussion on several Medicare processes involving changes to claims as originally submitted and/or adjudicated. This week we will review the five-level Medicare appeals process (Appeals Process) and the relationship of that process to claim adjustments (Adjustments) and reopenings (Reopenings). 
 
Overview of prior discussion on Adjustments and Reopenings
 
In last week’s note we focused on timely claim Adjustments and the Reopening of claims. Before we explore the Medicare Appeals Process, let us quickly summarize our prior discussion. That will make it easier for us to distinguish the Adjustment and Reopening processes from the Appeals Process. With respect to Adjustments, when a provider needs to correct or supplement a claim, the provider generally may correct the error or omission by submitting an Adjustment claim, so long as the submission is within the timely filing limits for those items or services (generally one year from the date of service). When the need for a correction is discovered beyond the timely filing limits, however, an Adjustment bill is not allowed, and a provider must utilize the Reopening process to correct the error or omission. (See Medicare Claims Processing Manual (MCPM), Chapter 1, Section 70.5, for more information on Adjustments.)
 
For Medicare purposes, “a reopening is a remedial action taken to change a final determination or decision that resulted in either an overpayment or an underpayment, even though the determination or decision was correct based on the evidence of record.” Traditionally, CMS has permitted A/B Medicare Administrative Contractors (A/BMACs) to develop their own reopening processes, potentially subjecting providers to different processes in different jurisdictions. To ease the administrative burden, Medicare has developed a new streamlined, standardized process for providers to request the Reopening of a claim.  In three recent releasesMedicare Claims Processing Transmittal R3022CP and related MLN Matters article MM8581 and MLN Matters article SE1426CMS set out the details for this new process, including a new Type of Bill (fourth digit “Q”) and various Condition Codes for providers to use to designate the type of Reopening being requested. (See MCPM, Chapter 34, for more information on Reopenings.)
 
Medicare Appeals Process
 
Once certain decisions or determinations have been made by a contractor (A/BMAC, Recovery Auditor, etc.) or an adjudicator (Qualified Independent Contractor [QIC], Administrative Law Judge [ALJ] or Appeals Council [AC]), a party (beneficiary, provider, supplier) to that decision has certain appeal rights under the Medicare Appeals Process. The current Medicare Appeals Process, which has been in effect for a number of years, has five levels of appeal, as follows:
 
·         First level—A/BMAC Redetermination
·         Second level—QIC Reconsideration
·         Third level—ALJ Hearing
·         Fourth level—Appeals Council Review
·         Fifth level—Judicial Review
 
We will explore each level of review in more detail below. 
 
CMS decisions subject to the Appeals Process
 
Not all final Medicare decisions give rise to appeal rights, only those that Medicare defines as “initial determinations” or “revised determinations.” A prime example of an initial determination that gives rise to appeal rights is a decision by an A/BMAC that certain items or services are not covered under Medicare, Parts A or B, resulting in a denial of payment for those items or services. Other examples of initial determinations that give rise to appeal rights include, but are not limited to, the following:
 
·         Whether the beneficiary or supplier knew, or could reasonably have been expected to know, at the time the items or services were furnished that the items or services were not covered;
·         Whether the deductible has been met;
·         The computation of the coinsurance amount;
·         The beginning and ending of a spell of illness; and
·         The medical necessity of services, or the reasonableness or appropriateness of placement of an individual at an acute level of patient care made by the Quality Improvement Organization on behalf of the A/BMAC.
 
On the other hand, Medicare defines a revised determination as an initial determination or decision that is reopened and results in the issuance of a revised decision. A revised determination is a separate and distinct determination that also gives rise to appeal rights. A prime example of a revised determination that gives rise to appeal rights is a decision by a Recovery Auditor, after reopening a formerly paid claim for certain services, to deny coverage for those services and to recoup the previously paid overpayment.
 
As noted above, not all final decisions by Medicare contractors or adjudicators are appealable. Actions that are not considered initial determinations and, therefore, are not appealable under Medicare include, but are not limited to, the following:
 
·         The coinsurance amounts prescribed by regulation for outpatient services under the prospective payment system;
·         A contractor's, QIC's, ALJ's, or Appeals Council’s determination or decision to reopen or not to reopen an initial determination, redetermination, reconsideration, hearing decision, or review decision; and
·         Determinations that a provider or supplier failed to submit a claim timely or failed to submit a timely claim despite being requested to do so by the beneficiary or the beneficiary’s subrogee.
 
A prime example of a decision that is not appealable is an A/BMAC’s refusal to reopen a claim determination.
 
Multi-level Appeals Process
 
The chart below sets out key timeframes and other particulars for each level of appeal:
 
 
MEDICARE APPEALS PROCESS
 
Level of Appeal
Decision Maker
Individuals or Entities
Authorized to Appeal
Timeframe to Request
Format of Request
Timeframe for Decision
Level One—Redetermination
A/BMAC
A provider, supplier, beneficiary, other party, or a representative of the above
Within 120 calendar days from date of notice of initial or revised determination
CMS Form 20027
Within (w/n) 60 calendar days, with 14-day extension if additional information is submitted
Level Two—Reconsideration
QIC
A provider, supplier, beneficiary, other party, or a representative of the above
Within 180 calendar days from date of notice of redetermination decision
CMS Form 20033
W/n 60 calendars days; if QIC fails to make its decision timely, provider may request escalation, which may occur if QIC fails to make their decision w/n 5 days of request
Level Three—Administrative Law Judge (ALJ) Hearing
ALJ
A provider, supplier, beneficiary, other party, or a representative of the above, so long as amount in controversy threshold is met ($140), and CMS
Within 60 calendar days from date of notice of reconsideration decision; provider must notify all parties to the QIC reconsideration of the hearing request
CMS Form 20034
W/n 90 calendar days; if ALJ fails to make their decision timely, provider may request escalation, which will occur if ALJ fails to make its decision w/n five days of request
Fourth Level—Appeals Council Review
Appeals Council
Any party not satisfied with ALJ’s decision, including CMS
Within 60 days of notice of ALJ’s decision
 
DAB Form 101
W/n 90 calendar days; if AC fails to make its decision timely, provider may request escalation, which will occur if AC fails to make its decision w/n five days of request
Fifth Level—Judicial (Federal District Court) Review
Federal District Court
Any party, if amount in controversy ($1430) is met
Within 60 days of notice of AC decision
Request must follow Federal and local rules for federal district court
Court follows Federal Rules of Civil Procedure and local rules for federal district court
 
Additional resources on the Medicare Appeals Process can be found, as follows:
MCPM, Chapter 29
 
Please reference the Medicare Learning Network brochure entitled “The Medicare Appeals Process,” for detailed information.
 
Relationship among change processes
 
With respect to the relationship of Adjustments to Reopenings, as stated at the beginning of this note, the Adjustment process is generally restricted to claim changes that are made within the respective timely filing limitations. When a provider needs to correct or supplement a claim, the provider generally may correct the error or omission by submitting an Adjustment claim, so long as the submission is within the timely filing limits for those items or services. When the need for a correction is discovered beyond the timely filing limits, however, an Adjustment bill is not allowed. In this case, a provider must utilize the Reopening process to correct the error or omission, assuming that the Request for Reopening is timely and meets other applicable requirements. Even if this Reopening is filed in a timely manner, the decision to reopen is at the discretion of the contractor or adjudicator. In addition, within the parameters established, contractors and adjudicators also have the right to initiate the Reopening of certain prior determinations and to override those prior determinations.
 
With respect to the relationship of Reopenings to Appeals, in Transmittal R3022CP, CMS noted that Reopenings are “separate and distinct” from the Medicare Appeals Process. The principal difference is that providers have certain rights to appeal under the Appeals Process, whereas the decision to Reopen is at the discretion of the contractor or adjudicator. For example, an A/BMAC’s denial of a claim is an initial determination, which gives the provider certain rights to appeal that denial. On the other hand, an A/BMAC’s refusal to reopen a claim determination is not an initial determination and, therefore, is not appealable. 
 
In addition, a Request for Reopening does not toll the timeframe to request an Appeal. For example, if the A/BMAC refuses to reopen a claim, the original initial determination stands as a binding decision, with the same timely filing requirements for Appeal as if the Reopening had not been requested (120 days from receipt of notice of the initial determination). If, however, an A/BMAC reopens and revises or adjusts an initial determination, that revised determination gives rise to new appeal rights, subject to otherwise applicable timely filing requirements (120 days from receipt of notice of the revised determination).
 
Generally, a claim determination may not be appealed and Reopened at the same time. For example, if a Reopening is pending when a subsequent timely Appeal is filed, the Reopening will be refused in order for the Appeal to proceed. Therefore, in most instances, a provider does not request a Reopening unless and until its appeal rights have been exhausted or the timely filing period for an Appeal has expired. In Chapter 34 of the MCPM, CMS notes two exceptions to this rule:
 
·         Cases where Medical Review (MR) requested documentation, did not receive it, and issued a denial based on no documentation. Subsequently, if the party requests an appeal and submits the requested documentation with that appeal, it shall be treated as a Reopening if certain specific conditions are met; and
·         Clerical errors (which include minor errors and omissions) shall be treated as Reopenings.
 
Please note, however, with respect to those cases denied for failure to respond to document requests, CMS included the following warning in both recently released MLN Matters articles (MM8581 and SE1496) relating to Reopenings:
 
Providers are reminded that submission of adjustment bills or reopening requests in response to claim denials resulting from review of medical records (including failure to submit medical records in response to a request for records) is not appropriate. Providers must submit appeal requests for such denials.
 
Hospitals are encouraged to review the relevant sections of the MCPM, Chapter 34, along with the above-referenced MLN Matters Articles, and to contact their respective A/BMACs to clarify any potential conflict between these multiple sources of Medicare guidance on this issue.
 
More generally, hospitals are encouraged to review their existing policies and procedures with respect to all three of the change processes discussed—Claim Adjustments, Reopenings and Appeals—to assure that they are updated and compliant, both in policy and practice.



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