Orthopedic Coding Alert

Medicare payers turn appeal rules upside down in 2006

Orthopedic reimbursement professionals responsible for Medicare appeals have a number of changes in store in 2006. Medicare's new Part B fee-for-service appeal procedures went into effect Jan. 1, 2006, so any appeals you-ve filed from that date forward might be handled differently than in the past. Read on to determine how you should change your appeals this year.

Independent Contractors Will Now Process Level II Appeals

One of the most significant changes to the appeal procedures is that CMS has designated qualified independent contractors (QICs), which are a handful of organizations Medicare has selected to act as independent reviewers of appeals. QIC review replaces the Part B Carrier Hearing in the Medicare fee-for-service appeal process.

DME changes: CMS has designated Q2Administrators as the QIC responsible for reviewing Part B and durable medical equipment (DME) reconsideration requests. Q2A's Ohio office processes Part B reconsiderations for the East region of the United States, and the South Carolina office processes Part B reconsiderations for the West region, as well as DME reconsiderations for the entire United States. Addresses and appeal filing instructions are available at www.q2a.com.

An online search feature at this Web site also allows providers to confirm the date an appeal was received by Q2A, appeal status, and decision deadline.

Under the new regulation, QICs must ensure that medical-necessity denials are reconsidered by a panel of -physicians or other appropriate healthcare professionals.- The panel must also include professionals qualified to assess the regulatory aspects of the claim.

CMS is hopeful that using independent review organizations with physician reviewers will increase confidence in the appeal process and even reduce the number of appeals taken to higher levels.

-We believe that the implementation of requirements that ensure appellants of both the fairness of the decision-making process and the accuracy and consistency of the decisions reached can eventually lead to measurable reductions in the need for the elevation of appeals to the slower, more costly levels of the appeals system (for example, ALJ hearing and MAC or federal court review),- states the appeal regulations interim rule published March 8, 2005.

Any QIC's reconsideration decision must be based on clinical experience and medical, technical and scientific evidence, to the extent applicable to the appeal. QICs are bound by National Coverage Determinations, CMS manuals, and federal Medicare statutes and regulations. QICs must also give substantial deference to local medical review policies and local coverage determinations. However, QICs have some flexibility not to apply local carrier policies if they explain in their decision why they didn't apply the policy.

You Must Submit All Evidence by Level II

New Medicare appeal regulations require that you must submit all evidence to support the appeal at the Level II -reconsideration- level or sooner, absent -good cause for late filing of evidence.- Absent good cause, the failure to submit evidence will prevent providers from introducing new material at subsequent levels of the appeals process.

Many healthcare appeal advocates believe that this penalty for early presentation of evidence is harsh, according to the comments recorded in the Federal Register interim rule. As a result, CMS added a provision to allow beneficiaries-appellants to submit documentation that was specified as missing in the notice of redetermination at any time during a pending appeal without the need for good cause. However, this exemption does not apply to providers or to beneficiaries who are represented by providers during the appeal process.

The provider must file Level II appeals within 180 days of receipt of the Level I denial decision. Therefore, if a Level I appeal did not contain complete information, all information, including letters of medical necessity, medical records, and any applicable testimony, must be gathered quickly and submitted at the next level of appeal.
 
Mandatory Decision-Making Time Frames

Old way/new way: Under the previous Medicare process, appeals generally took three to five years to reach resolutions at the highest level of appeal. With new time constraints in place at each level, an appeal should take about 18 months to make its way through the entire process.
 
Both Level I redetermination and Level II reconsideration decisions must be made within 60 days. Level III appeals are still decided by the administrative law judge (ALJ), but in the past, there was no time limit for a decision during this step. However, ALJs must now make a decision within 90 days. The Medicare Appeal Council decides Level IV, and has 90 days to do so.

Remember: If the QIC or ALJ fails to process appeals in a timely manner, the regulations specify that such appeals qualify for immediate escalation. You must notify  the responsible processing party that a deadline is imminent. Once the party receives the notification, they must take action on the denial by announcing a decision or escalating the file to the next level.

-Reopenings- Available for Minor Error Correction

Medicare representatives who conducted recent training sessions on the new appeal procedures have indicated that they expect -redeterminations- to be confused with -reopenings.-

Here's the difference: During a reopening, the orthopedic surgeon would phone the carrier to correct minor clerical errors and omissions. You might also use a reopening to submit missing documentation. You have only 120 days after the initial claim determination to request either a redetermination or a reopening.

While the payer must make a redetermination decision within 60 days, no such deadline applies to reopenings. This poses a potential problem when the surgeon is uncertain whether to request a redetermination or reopening, because the time for filing each runs consecutively. Requesting a reopening in lieu of a redetermination may result in the timely filing period to be tolled without a decision.

Further, some carriers may not accept a redetermination request if the initial claim requires a correction or an adjustment. Before submitting an appeal, billers should research all possible reasons for denied or noncovered charges. Identifying the reason for the denied or non-covered charge is crucial to determining whether to file a reopening or a redetermination.

CMS Can Act as a Party in Upper-Level Appeals

The new regulations formally grant CMS (and/or its contractors, including the carrier and/or QIC) the authority to participate in hearings or act as a party to ALJ and MAC hearings. Further, if CMS is unsatisfied with an ALJ decision, CMS can seek review by the Medicare Appeals Council.

If CMS does act as a party in a review, it will have the opportunity to submit evidence, call witnesses, and cross- examine witnesses.

A CMS fact sheet regarding these changes is at www.cms.hhs.gov/appeals/factsheet.pdf.

Tammy Tipton is the owner of Appeal Solutions Inc., a claims resolution consulting firm based in Blanchard, Okla.