Know the 5 Levels of the Medicare Appeals Process

Legal mallet and stethoscopeBy Douglas J. Jorgensen, DO, CPC, FACOFP

If you disagree with a Medicare payer’s audit findings, you may appeal (see Exclusions on Medicare and Limitations on Payment, 42 C. F. R. Part 405, Subpart I). This is important because if Medicare successfully prosecutes you for fraud, you may face civil monetary penalties of $10,000-$15,000 per occurrence; and, if fraud is proven you also lose any protection you may have had under the statute of limitations.

The five levels of Medicare Appeals are:

Level 1: Redetermination (no minimum monetary limit) – You must appeal and request a redetermination in writing within 120 days of notification. If you do not request a redetermination within 30 days, Medicare will begin withholding moneys from your current accounts receivable (A/R), and could begin notifying the beneficiary’s secondary and tertiary payers.

Level 2: Reconsideration (no minimum) – You must submit a request for reconsideration in writing within 180 days of the redetermination’s failure notification. Sixty days from notice of failure to succeed at the Level 1 redetermination, Medicare will begin withholding A/R to settle what is “owed” for the alleged overpayment, and will begin notification of secondary and tertiary insurers.

Level 2 appeals are conducted by a qualified independent contractor (QIC). In a QIC, a panel of physicians uses its clinical experience to consider the medical, technical, and scientific evidence on record to assist in a final determination.

You must provide a clear explanation of why you disagree with the audit findings and its supporting evidence and/or documentation. Failure to present the evidence now may make it inadmissible when needed during subsequent appeals.

Level 3: Administrative Law Judge (ALJ) (minimum amount is $130 for 2012) – If the provider fails the first two levels, an ALJ hearing is set that’s typically done via teleconference. Request for an ALJ hearing must occur in writing within 60 days from notification of a failed reconsideration. Sometimes, the ALJ will hear evidence on the case(s) in question more globally; sometimes he or she will want to go over each case, one by one.

Specific reasons why the defense disagrees with the Level 1 and 2 findings, cogent arguments, and expert witness testimony at this level is helpful because the ALJ will often seek clarification from the expert why the provider documented a certain way, or may ask the expert to explain why the defense disagrees with the first two levels of appeal. Medicare may not show up, and instead let the evidence from the redetermination panel and reconsideration QIC stand on Medicare’s behalf.

Level 4: Medicare Appeals Council (MAC) (no monetary minimum) – The MAC review occurs in the Departmental Appeals Board of the federal U.S. Department of Health & Human Services (HHS). To advance to this level, you must provide a written objection within 60 days of the ALJ decision.

Your objection must clearly outline and explain specifically what elements of the ALJ decision you oppose. The MAC limits appeals to those in writing (no teleconferences), unless the provider does not have legal counsel (which is ill-advised, especially at this level).

Level 5: Federal Court of Appeals ($1,350 minimum for 2012) – To proceed to this level, you must appeal in writing within 60 days of the MAC determination.

Fact findings, written interpretations, or rules are deemed conclusive if they are supported by substantial evidence. At this level, the argument must be clear and well documented. Legal counsel and representation are strongly encouraged.

See “The Medicare Appeals Process: Five Levels to Protect Providers, Physicians, and Other Suppliers” for more information.

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