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Understanding The Medicare Appeals Process

Michael Burke-1By Michael R. Burke

In recent years, the Federal government has increased its focus and spending on preventing billing errors and billing fraud.  The new alphabet soup of entities (including Recovery Audit Contractors (RACs) and Zone Program Integrity Contractors (ZPICs) (which have been and will be replacing existing program safeguard contractors)) being utilized by the Centers for Medicare & Medicaid Services (CMS) in connection with Medicare billing shows that CMS is stepping up its efforts and focusing its resources on detecting, preventing and recovering monies that it has paid out based on billing errors and billing fraud.  As such, it is increasingly important for physicians and other health care providers to understand the Medicare appeals process, which applies to matters such as simple billing denials and overpayment determinations.

This article will only focus on the Medicare Part B appeals process as it applies to billing done by physicians and other Part B health care providers. A slightly different process applies to the denial or revocation of a Medicare provider enrollment number (which has also been the source of increasing enforcement for technical violations) but which is beyond the scope of this article.

The five (5) levels of appeal that comprise the standard Medicare appeals process for denials of claims or requests for overpayments are as follows:

  • First level of appeal – redetermination by a Medicare carrier.
  • Second level of appeal – reconsideration by a Qualified Independent Contractor (QIC).
  • Third level of appeal – hearing by an Administrative Law Judge (ALJ).
  • Fourth level of appeal – review by the Medicare Appeals Council.
  • Fifth level of appeal – judicial review in Federal District Court.

Once an initial claim determination (or an overpayment determination) is made, providers have the right to appeal.  In the first level of appeal, a request for redetermination is filed for an examination of the claim by Medicare carrier personnel (e.g. Highmark Medicare Services in Pennsylvania, New Jersey and Delaware) who are different from the personnel who made the initial claim determination.  The individual or entity filing the appeal (the appellant) has 120 days from the date of receipt of the initial claim determination to file an appeal.  A request for redetermination must be made in writing, and the appellant should attach any supporting documentation to its redetermination request that would support its position.  The appellant can use the CMS form provided for this process (currently form CMS-20027) or it can make the request in writing by including information related to the dispute specified in the rules.  There is no minimum monetary threshold to make a request for determination.  Contractors will generally issue a decision on the request for redetermination within 60 days of the receipt of the redetermination request.

If a physician is dissatisfied with the decision at the redetermination level, he or she can proceed to the second level of appeal, which is a request for reconsideration.  A QIC conducts the request for reconsideration, which must be filed within 180 days of receipt of the notice of redetermination.  This request can be made on the appropriate CMS form (currently CMS-20033) or it can be made otherwise in writing but must contain certain basic information that is relevant to the request.

The request should clearly explain why the appellant disagrees with the redetermination.  In addition, a copy of the redetermination decision and any other useful documentation should be sent to the QIC, although the appellant does not have to resubmit any information that was already submitted to the contractor that made the initial redetermination.  It is important for the appellant to submit any information that it feels is relevant to the consideration of the request for reconsideration, as evidence not submitted at the reconsideration level may be excluded from consideration at subsequent levels of appeal unless the appellant shows good cause for not submitting the evidence through the first two levels of appeal.

In general, the QIC sends its decision to all parties within 60 days of the receipt of the request for reconsideration.  The decision of the QIC will contain detailed information on further appeal rights if the decision is not fully favorable to the appellant.

Please note that CMS is no longer permitted to recoup overpayments to a provider made during the first and second levels of appeal.  While recoupment is prohibited until completion of the second level of appeal, interest will continue to accrue on the amounts in question and will be due and payable to CMS in the event that the appeal is lost.

If an appellant is still dissatisfied with the decision at the reconsideration level, the third level of appeal is the request for an ALJ hearing, which must be made within 60 days of the receipt of the reconsideration decision.  The specific details regarding the procedures for requesting an ALJ hearing are generally found in the QIC’s decision on the request for reconsideration, but a standard CMS form (currently CMS – 20034 A/B) may be used to formally request an ALJ hearing.

ALJ hearings are hearings are generally held either by telephone or by video-teleconference.  An in-person hearing may be requested, but the appellant must demonstrate good cause for such a request and the ALJ will determine whether an in-person hearing is warranted based on the facts of a specific case.  The physician appealing the matter may also request that the ALJ make a decision on the record without having a hearing.  The ALJ is responsible for setting all of the hearing preparation procedures and timeframes.

In order to request an ALJ hearing, the minimum amount in controversy is $130 in 2010, although claims for more than one beneficiary can be combined to reach this limit.  The amount in controversy that is required to request an ALJ hearing is increased annually by the percentage increase of the medical care component of the Consumer Price Index for All Urban Consumers.

The ALJ generally issues a decision within 90 days of the receipt of the hearing request, although this timeframe may be extended for a variety of reasons (such as submission of additional evidence not included with the hearing request, failure to send notice of the request for a hearing to all parties, the initiation of discovery if CMS is a party, etc.).

If either party to the ALJ hearing is dissatisfied with the ALJ’s decision, the party may request a review by the Medicare Appeals Council.  There are no requirements regarding the amount in controversy at this level since a party only gets to this level if it meets the minimum requirements for an ALJ hearing.  The request for review by the Medicare Appeals Council must be submitted in writing within 60 days of the ALJ’s hearing decision notice and the request must specify the issues and findings that are being contested.  The ALJ decision will provide specific details regarding the procedures to follow when filing a request for Medicare Appeals Council review.

The Medicare Appeals Council will generally issue a decision within 90 days of the receipt of a request for review, although this deadline can be extended for various reasons (similar to those noted above at the ALJ hearing level).  As is the case with the other levels of appeal (starting with requests for reconsideration), if the Medicare Appeals Council does not issue a decision within the applicable timeframe, the appellant may ask the Medicare Appeals Council to escalate the case to the next level (here, the judicial review level).

The fifth and final level of appeal in the standard Medicare appeals process is judicial review in Federal District Court.  If there is $1,260 or more in controversy following the decision of the Medicare Appeals Council, the appellant can request judicial review before a Federal District Court judge.  Such a request must be made within 60 days of the receipt of the Medicare Appeal Council’s decision.  The amount in controversy increases annually in the same manner as the amount in controversy for an ALJ hearing, and as is the case with an ALJ hearing, claims may be combined to reach the minimum amount in controversy.

The foregoing sets forth a basic overview of the Medicare appeals process.  The process does not often start to produce a real benefit to the appellant until level two, as many redetermination decisions follow (i.e., do not overturn) the determination of the initial claim decision.  Depending upon the amount of the claims that have been denied or whether the appeals process is being used to dispute an overpayment determination, a physician may want to utilize a health care attorney or consultant with experience in the Medicare appeals process to assist him or her, which also may involve the engagement of a billing expert to support the physician’s position and to advise him or her as to the best arguments to make during the appeals process.

Michael R. Burke, Esquire is a shareholder with the health care law firm of Kalogredis, Sansweet, Dearden and Burke, Ltd. located in Wayne, PA.

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