Get Ready Now for 2006 Medicare Appeals

LEGAL GRIND

The Medicare appeals process was revamped by Congress in 2000, and those changes were refined under the Medicare Modernization Act of 2003. The Centers for Medicare and Medicaid Services (CMS) began implementing new appeals procedures for Part A providers (such as home health agencies) on May 1, 2005. Part B suppliers will follow on Jan. 1, 2006. As a result, suppliers will see big changes to Medicare appeals starting in January. It is worthwhile to start thinking now about how those changes will affect your business.

Congress' intent was to streamline the process so appeals move more quickly toward a final resolution. While the law requires a quicker resolution of an appeal at every level, it may be some time before the shorter timeframes are fully realized because of the difficulty in implementing the system overhaul. From the suppliers' perspective, you will need to learn new terminology for the different appeal levels. There will also be important changes in the procedural rules at each level. The transition of the administrative law judges (ALJs) to the Department of Health and Human Services (HHS) will be taking place later this year and will overlap with the shift to the new appeals process.

One big structural change is that the process will be the same for both Part A and Part B appeals. Home health agencies, DME suppliers and physicians will operate under the same rules and procedures instead of the two separate systems that have existed until now. There will be new acronyms to learn as well. For example, everyone will have a MAC — Medicare administrative contractor — for claims processing instead of fiscal intermediaries and DMERCs. MACs will only adjudicate claims. Because one goal of the legislation is to separate claim adjudication from appeals, other specialized contractors called QICs, or qualified independent contractors, will have responsibility for appeals.

The first hearing level is a redetermination, a carrier-level review of a denied claim. Contractors will have 60 days to issue a decision on the redetermination. Suppliers who want to appeal an unfavorable redetermination have 180 days to file a request for reconsideration with a QIC. The reconsideration takes the place of what we refer to today as the "fair hearing." An important change for this level of appeal is that the hearing will be "on the record." In other words, reconsiderations will not include an in-person hearing, as is the case with fair hearings today. The rules require the QIC review panel to include physicians or others with medical or legal credentials. QICs have 60 days to issue a decision on the reconsideration.

Perhaps the most significant appeals change is that all relevant evidence must be submitted at the QIC appeal. Relevant evidence that is not submitted to the QIC will be excluded from subsequent appeals unless a supplier can show "good cause" for not including the evidence. This is a radical change from today's process, where suppliers can continue to supplement the record at each level of appeal. This new rule places the burden on suppliers to make sure the record at the QIC is complete to preserve their rights in subsequent appeals.

Suppliers unhappy with a QIC decision may appeal to an ALJ. ALJ hearings will likely be different from today's. Although parties may request in-person ALJ hearings, most hearings will take place by video conference. The new procedure also allows CMS to enter as a party in an ALJ hearing. These hearings will be adversarial and may require more evidence development than they do now. Finally, ALJs will be subject to a 90-day deadline for rendering a decision.

The Medicare Appeals Council is the last level of administrative appeal following the ALJ decision. After that, a supplier can file an action in federal court.

This article originally appeared in the June 2005 issue of Mobility Management.

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