Medicare appeals process gets overhaul

June 1, 2005

Providers may want to be aware of changes published by the Center for Medicare and Medicaid Services (CMS) that substantially overhaul the appeals process, in part, to reduce the time frames for adjudicating fee-for-service Medicare claims appeals. A process that now exceeds 1,000 days must be reduced to 300 days.

Providers may want to be aware of changes published by the Center for Medicare and Medicaid Services (CMS) that substantially overhaul the appeals process, in part, to reduce the time frames for adjudicating fee-for-service Medicare claims appeals. A process that now exceeds 1,000 days must be reduced to 300 days. The final rules also established a uniform process for Medicare Part A and Part B appeals in four stages before a federal appeal.

LEVELS OF APPEAL All first level Medicare appeals are now called "redeterminations" and will be conducted by fiscal intermediaries (FIs) and carriers within 60 days of receipt of a request. There are also new requirements for improved notice for redeterminations, including specific reasons for the decision and a summary of relevant clinical or scientific evidence used in making the decision.

Second level appeals are called "reconsiderations" and are conducted by Qualified Independent Contractors (QICs). As of May 1, all redeterminations involving Medicare Part A services, such as services furnished by hospitals, skilled nursing facilities, and home health agencies, are now subject to a new second level of appeal-reconsideration by a QIC. Beginning January 1, 2006, appeals for redeterminations carried out by Medicare carriers that pertain to Medicare Part B appeals (e.g., those involving physician services and durable medical equipment items) will be also subject to QIC reconsiderations, which replaces the current "fair hearing" process for Medicare Part B claims.

To compensate for the limited number of sites, the majority of hearings will be held with videoconference equipment or by telephone. A beneficiary who wants to appear in person before a judge must show that "special or extraordinary circumstances exist." The HHS defended its new policy of using videoconference equipment by stating that such equipment would enable judges "to complete more cases" within the required 90-day deadline. "Video teleconferences will allow hearings to be provided more timely, with vastly more access points than Social Security currently provides through its offices," stated Michael O. Leavitt, the secretary of Health and Human Services. But others have expressed concern, stating that face-to-face hearings are valuable for the judges and beneficiaries alike.

The fourth level of appeal is a review by the Medicare Appeals Council (MAC), which is part of the Departmental Appeals Board (DAB) of HHS. The MAC is the final administrative appeal review for all Medicare cases before a review by a federal district court. A dissatisfied party has 60 days to request a review of an ALJ decision and the MAC review must be completed within 90 days of receipt of a request, with some exceptions. The MAC is supposed to conduct a de novo review, meaning that only evidence in the record will be considered unless a new issue is raised on appeal. The parties have no right to a hearing at the MAC level. A party, including CMS if it was a party at the ALJ level, may request an oral argument. The MAC may grant the request if the claim raises an important question of law, policy, or fact that cannot be decided on written submissions. Generally, a MAC decision is a prerequisite for proceeding with an appeal in federal court.

CMS is currently reviewing the new appeals process to determine which aspects will apply to Medicare Advantage Plans

This column is written for informational purposes only and should not be construed as legal advice.

Barry Senterfitt is a partner in the insurance industry practice of Akin Gump Strauss Hauer & Feld LLP, and is located in the firm's Austin, Texas, office.