Medicare Update

CMS Publishes Final Rule on Medicare Part A/B Claims Appeal Procedures

On December 9, 2009, the Centers for Medicare & Medicaid Services (CMS) published a Final Rule addressing its March 8, 2005 Interim Final Rule on Medicare Part A/B claims appeal procedures.

In the Final Rule, CMS responds to various comments on the March 8, 2005 Interim Final Rule (Interim Final Rule). However, it appears that CMS makes few (if any) substantive changes from the Interim Final Rule. Instead, CMS makes numerous technical changes (e.g., adding the word "calendar" in front of the word "day" or "days"). However, the devil is often in the details and substantive changes could possibly emerge.

The Final Rule is effective on January 8, 2010.

Subscribe to Medicare Update, follow me on Twitter @MedicareUpdate, and become a fan on Facebook.

Can Medicare Claims Be Aggregated for Purposes of ALJ Hearings?

From time to time, I receive a series of the same or similar inquires related to the Medicare program.

Most recently, I have received a few inquires regarding Medicare Part A and B appeals and the amount in controversy (AIC) threshold for Administrative Law Judge (ALJ) hearings. In particular, whether claims or appeals can be aggregated to satisfy the AIC threshold.  The AIC threshold amount for ALJ hearings is $120, and the AIC threshold amount for judicial review is $1,220, for calendar year 2009. 

The statutory authority for aggregating claims or appeals to satisfy the AIC threshold for ALJ hearings can be found in Section 1869(b)(1)(E) of the Social Security Act. The Secretary of the Department of Health and Human Services has also promulgated regulations at 42 C.F.R. 405.1006 regarding aggregation.

If the AIC threshold for an ALJ hearing is a possible issue, appellant(s) may want to examine and consider the aggregation provisions of 42 C.F.R. 405.1006 and any appeal and/or aggregation instructions issued by the Centers for Medicare & Medicaid Services (CMS) and its administrative contractors.

Note: CMS recently published a Notice announcing the annual adjustment to the AIC threshold amounts for ALJ hearings and judicial review. According to Notice, the AIC threshold amount for ALJ hearings will be $130, and the AIC threshold amount for judicial review will be $1,260, for calendar year 2010. 

Subscribe to Medicare Update, follow me on Twitter @MedicareUpdate, and become a fan on Facebook.

Related articles by Zemanta

• CMS to Adjust Amount in Controversy Thresholds for Medicare Appeals (medicareupdate.typepad.com)

CMS to Adjust Amount in Controversy Thresholds for Medicare Appeals

Today, the Centers for Medicare & Medicaid Services released a display copy of a Notice announcing the annual adjustment to the amount in controversy (AIC) threshold amounts for administrative law judge (ALJ) hearings and judicial review under the Medicare appeals process.

According to Notice, the AIC threshold amount for ALJ hearings will be $130, and the AIC threshold amount for judicial review will be $1,260, for calendar year 2010.  These amounts are based on the 26.3 percent increase in the medical care component of the consumer price index (CPI) from July 2003 to July 2009. The adjustment to the AIC threshold amounts for calendar year 2010 will be effective for requests for ALJ hearings and judicial review filed on or after January 1, 2010.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) requires that the AIC threshold amounts for ALJ hearings and judicial review be adjusted annually. In brief, the MMA requires that the AIC threshold amounts be adjusted by the percentage increase in the medical care component of the CPI for all urban consumers for July 2003 to the July of the preceding year involved, and rounded to the nearest multiple of $10.

The Notice is scheduled to appear in the Federal Register on September 25, 2009.

UPDATE: The Notice as it appears in the Federal Register can be found here.

Subscribe to Medicare Update, follow me on Twitter @MedicareUpdate, and become a fan on Facebook.

CMS Delays Publication of Final Rule on Medicare Appeal Procedures

On February 27, 2009, the Centers for Medicare & Medicaid Services (CMS) published a Notice in the Federal Register extending the timeline for finalizing the Interim Final Rule (with comment period) entitled "Medicare Program: Changes to the Medicare Claims Appeal Procedures."

The Interim Final Rule (with comment period) implemented changes to the Medicare appeal procedures brought on by the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 as well as the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

Under the regular timeline for the publication of a final rule, CMS was required to publish a final rule responding to public comments on the Interim Final Rule (with comment period) no later than March 1, 2008.  However, in February 2008, CMS extended the timeline for publishing the final rule until March 1, 2009.  The Notice further extends the timeline for the publication of the final rule until March 1, 2010.

According to the Notice, CMS believes that it is necessary to delay the publication of the final rule "in order to afford the President's appointees and designees an opportunity to further review and consider the laws and policies that will be set forth in the final rule."

However, CMS points out that the Interim Final Rule (with comment period) remains in effect through March 1, 2010 (unless the final rule is published and becomes effective before March 1, 2010).

OIG Releases New Report on Office of Medicare Hearings and Appeals

On January 28, 2009, the Department of Health and Human Services' Office of Inspector General (OIG) released a report entitled "Medicare Administrative Law Judge Hearings: Update, 2007-2008."

The report compares the performance of the Office of Medicare Hearings and Appeals (OMHA) during its first year and third year of operation. In brief, the OIG found that:

• From its first to third year of operation, the OMHA's caseload increased by 37 percent and the proportion of cases subject to the 90-day decision requirement also increased.  Interestingly, the OIG reports that about one quarter of the caseload increase was attributable to appeals associated with the Medicare Recovery Audit Contractor Demonstration.
• There was little change in the hearing formats used and the type of primary appellants from the OMHA's first to third year of operation. 
• OMHA improved the timeliness of its decisions from its first to third year of operation.  In fact, during its third year of operation, the OMHA had 20,916 cases with a 90-day decision requirement and decision dates in the appeals system.  The OIG reports that the OMHA decided 94 percent of these cases on time.
• OMHA improved the quality of data in the appeals system from its first to third year of operation. 

The report is based on an analysis of data from the appeals system for the OMHA's third year of operation, including cases received by the OMHA between June 1, 2007 and May 31, 2008.  The report was requested by the Senate Finance Committee and serves as a follow-up study to the OIG report entitled "Medicare Administrative Law Judge Hearings: Early Implementation, 2005-2006."

Related Post: OIG Reports on Office of Medicare Hearings and Appeals

CMS Revises Instructions on Good Cause and Medicare Claim Reopenings

On January 16, 2009, the Centers for Medicare & Medicaid Services (CMS) released Transmittal 1671, which revises part of the Medicare Claims Processing Manual (Pub. 100-04) and addresses what constitutes new and material evidence as it relates to good cause for reopening a Medicare claim.

In Transmittal 1671, CMS also establishes policies related to good cause reopenings, including a requirement that a Medicare contractor clearly document in the case file the new and material evidence that represents good cause for reopening. CMS also states that "[a] contractor's decision to reopen based on the existence of good cause, or refusal to reopen after determining good cause does not exist, is not subject to appeal." In doing so, CMS cites 42 CFR 405.926(l) and 405.980(a)(5), which indicate that the decision to reopen (or not reopen) is not an initial determination, is final and not subject to appeal.

In making such a statement, CMS may be reinforcing at least 2 recent Medicare Appeals Council (MAC) decisions (See In the case of Providence St. Joseph Medical Center and In the case of Memorial Hospital of Long Beach) in which the MAC found that CMS expressly declined to establish an evidentiary burden of proof for reopenings in the Interim Final Rule, which revised the Medicare appeals process. The MAC also found that the enforcement mechanism for good cause standards lies with CMS's evaluation and monitoring of Medicare contractor performance, not the appeals process.

Bottom line. Medicare providers and suppliers may find it difficult to successfully challenge a Medicare contractor's good cause finding as part of the Medicare appeals process unless there is a change in Medicare policy or the MAC decisions are overturned or superseded. 

Background:

Pursuant to 42 CFR 405.980(b), a Medicare contractor may reopen and revise an initial determination or redetermination between 1 year and 4 years from such determination for good cause.  According to 42 CFR 405.986(a)(1), "good cause" may be established when there is new and material evidence that:

• Was not available or known at the time of the determination or decision; and 
• May result in a different conclusion.

As reflected in 42 CFR 405.986(a)(2), "good cause" may also be established when the evidence considered in making a determination or decision clearly shows on its face that an obvious error was made at the time of the determination or decision.

OIG Examines Evidentiary Criteria for Reinstating Medicare Billing Privileges

The Department of Health and Humans Services Office of Inspector General (OIG) recently released an October 2008 report entitled South Florida Durable Medical Equipment Suppliers: Results of Appeals.

In the October 2008 report, the OIG examines the number of South Florida suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) that were removed from the Medicare program, appealed and were later reinstated by hearing officers.  As part of that examination, the OIG investigated the evidence that hearing officers reviewed for the suppliers that were reinstated and the number of suppliers that were later removed from the Medicare program or indicted for fraud.

As the OIG revealed in its March 2007 report, entitled South Florida Suppliers' Compliance With Medicare Standards: Results From Unannounced Visits, the OIG made unannounced visits to 1,581 DMEPOS suppliers in the Miami-Dade, Broward and Palm Beach counties of Florida.  The purpose of the visits was to determine whether the suppliers were compliant with 3 Medicare standards.  Of those 3 Medicare standards, the OIG focused on 5 requirements, which state that suppliers must:

• Maintain a physical facility;
• Be accessible during business hours;
• Have a visible sign;
• Have hours of operation posted; and
• Maintain a primary business telephone listed under the name of the business.

Based on the unannounced visits, it was determined that 491 of the DMEPOS suppliers failed to meet Medicare supplier standards, which resulted in the Centers for Medicare & Medicaid Services (CMS) revoking the supplier's Medicare billing privileges.  The OIG's October 2008 report reveals that:

• 243 of the 491 DMEPOS suppliers appealed the revocations and received administrative hearings, and that hearing officers reinstated the Medicare billing privileges for 91 percent of these suppliers.
• Hearing officers reinstated the Medicare billing privileges based on a variety of evidence (e.g., photographs, affidavits, utility bills and leases) because there are no criteria regarding the types of evidence necessary to reinstate supplier billing privileges.
• Two-thirds of the DMEPOS suppliers whose Medicare billing privileges were reinstated have subsequently had their privileges revoked or inactivated, and that the U.S. Attorney's Office has indicted 18 individuals connected to 15 of the reinstated DMEPOS suppliers. 

In the October 2008 report, the OIG recommends that CMS strengthen the appeals process by developing criteria regarding the types of evidence required for hearing officers to reinstate suppliers' Medicare billing privileges.  According to the October 2008 report, CMS agreed that it should consider establishing guidelines regarding the evaluation of evidence that a hearing officer will review.

CMS Releases Frequently Asked Questions on PRRB Appeals

The Centers for Medicare & Medicaid Services (CMS) recently posted a Frequently Asked Questions (FAQ) document on the CMS website related to the new Provider Reimbursement Review Board (PRRB) rules and the Final Rule, which revised the Medicare regulations governing PRRB appeals.  CMS's release of the FAQ document follows the release of a series of alerts addressing the new PRRB rules and Final Rule.  The alerts can be found on the PRRB Instructions page of the CMS website.

South Carolina Hospitals Challenge Recoupment of Medicare Overpayments

In a pending legal action, 37 South Carolina hospitals allege that the Centers for Medicare & Medicaid Services (CMS) unlawfully recouped over $20 million in alleged Medicare overpayments.

Specifically, the hospitals claim that CMS, through Palmetto GBA, LLC (Palmetto) and Wisconsin Physicians Service Insurance Corporation (WPS), recouped the alleged overpayments in contravention of Section 935 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA). 

Simply stated, Section 935 of the MMA requires that, if a provider or supplier (collectively "provider") seeks a reconsideration by a qualified independent contractor (QIC) on an Medicare overpayment determination, CMS and its contractors may not recoup the Medicare overpayment until the date the decision on the reconsideration has been rendered.  In fact, Section 935 of the MMA (set forth at 42 U.S.C. 1395ddd(f)(2)), states in part the following:

"In the case of a provider of services or supplier that is determined to have received an overpayment...that seeks a reconsideration by a qualified independent contractor on such determination..., the Secretary may not take any action (or authorize any other person, including any medicare contractor,...) to recoup the overpayment until the date the decision on the reconsideration has been rendered..." 

The hospitals were notified of the alleged overpayments by HealthDataInsights, Inc. (HDI) as part of the Medicare Recovery Audit Contractor (RAC) demonstration project.  The HDI letters indicated that the hospitals would receive a remittance notice reflecting the exact overpayment amount and withhold, and stated that the hospitals could appeal the overpayment decision by filing a "request for redetermination within 120 days of the date your receive the remittance notice from your fiscal intermediary." However, the hospitals allege that, in many instances, the alleged overpayments were recouped either at or before the time that the notice letters were received, giving the hospitals no time to file a redetermination request before recoupment. 

According to the legal action, it is the hospitals position that Section 935 of the MMA precludes recoupment until a provider has had an opportunity to appeal through the redetermination and reconsideration levels of the Medicare appeals process. In support of that position, the hospitals point to, among other things, House Report 108-391 of the MMA, which states in part the following:

"The Secretary is prohibited from recouping any overpayments until a reconsideration-level appeal (or a redetermination by the fiscal intermediary or carrier if the QICs are not yet in place) was decided, if a reconsideration was requested..."

This legal action again raises a question regarding whether CMS's apparent policy on recoupment is in conflict with Section 935 of the MMA and/or Congressional intent.

The current Medicare appeals process is a basically a 4 step administrative appeals process.  The first level of appeal is known as "redetermination" and the second level of appeal is known as "reconsideration."  A provider has 120 days from an initial determination to request a redetermination.  Following the receipt of a redetermination, a provider then has 180 days to file a reconsideration request. 

In order to implement Section 935 of the MMA, CMS published a Proposed Rule on September 22, 2006, but has still not promulgated a final rule.  CMS has also issued various program instructions. Most recently, CMS released Transmittal 141 and a revised MLN Matters article number MM6183.

When an overpayment determination is made, Transmittal 141 and MM6183 suggest that providers will be sent overpayment demand letters advising how to stop recoupment. Transmittal 141 and MM6183 also suggest that recoupment will begin on the 41st day from the date of the first demand letter if a valid redetermination request is not received within 30 days of the date of the demand letter.

CMS intends to handle unfavorable redetermination decisions in a similar manner.  According to Transmittal 141 and MM6183, recoupment will begin no earlier than the 61st day (and no later than the 76th day) from the date of a redetermination notice unless a valid reconsideration request is received within 60 days of the date of a subsequent demand letter.  However, recoupment will stop at whatever point that a timely, valid redetermination or reconsideration request is received, but Medicare will not refund any recoupment already taken.

Therefore, absent some intervening event, CMS's policy on recoupment appears to effectively shorten the redetermination and reconsideration appeals periods for providers seeking to avoid having to repay an alleged overpayment pending appeal.  This is something that providers should keep in mind as the rollout of the permanent Medicare RAC program moves forward.

CMS to Adjust Amount in Controversy Thresholds for Medicare Appeals

Today, the Centers for Medicare & Medicaid Services published a Notice in the Federal Register announcing the annual adjustment to the amount in controversy (AIC) threshold amounts for administrative law judge (ALJ) hearings and judicial review under the Medicare appeals process.

According to the Notice, the AIC threshold amount for ALJ hearings will be $120, and the AIC threshold amount for judicial review will be $1,220, for calendar year 2009.  These amounts are based on the 22.3 percent increase in the medical care component of the consumer price index (CPI) from July 2003 to July 2008. The adjustment to the AIC threshold amounts for calendar year 2009 will be effective for requests for ALJ hearings and judicial review filed on or after January 1, 2009.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) requires that the AIC threshold amounts for ALJ hearings and judicial review be adjusted annually.  In brief, the MMA requires that the AIC threshold amounts be adjusted by the percentage increase in the medical care component of the CPI for all urban consumers for July 2003 to the July of the preceding year involved, and rounded to the nearest multiple of $10.