New Medicare Appeals Rules

Recently, there was an announcement of a drastic change in the way all medical service providers will appeal denied Medicare claims. On March 8, 2005, the Department of Health and Human Services (DHHS) and the Center for Medicare and Medicaid Services (CMS) published an Interim Final Rule in the Federal Register, titled “Changes to the Medicare Claims Appeal Procedures,” regarding the Medicare program. Some of the provisions contained in this Rule come from the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA).

The Rule, as published, is 80 pages long and contains many changes, both large and small, to the Medicare appeals rules. The major changes are to the structure of the appeals process, including the following: Under the new Rule, there will be a uniform appeals process for all Part A and B claims; no longer will the appeals process vary between carriers. As part of this new process, a new position will be created for a qualified independent contractor (QIC), to conduct reconsiderations of claim denials made by fiscal intermediaries, carriers and quality improvement organizations. There will only be four of these QICs nationwide. There will also be a QIC appeals panel made up of medical professionals, which will reconsider cases involving medical necessity issues. The time frame for making decisions on administrative appeals has also dramatically decreased; a process which could previously take more than three years must now be completed in no more than 300 days. And finally, if the carrier or fiscal intermediary denies your claim, and that denial is upheld by the QIC or QIC appeals panel, you can still appeal the denial to an Administrative Law Judge (ALJ); however, the ALJ will no longer be a Social Security ALJ, but an DHHS ALJ, whose sole responsibility will be Medicare appeals.

There are also many other, less noticeable changes. However, even some of these smaller details may greatly affect how appeals are filed and handled by medical service providers, such as ambulance services. One such change is that you must present all evidence (medical records, etc.) that supports your appeal at or beneath the QIC hearing level. You will no longer generally be able to bring in new evidence at the ALJ level. This and other changes will force medical professionals to be very thorough when filing appeals for their denied claims.

There is good news and bad news between the lines of this new Rule. The good news includes the reduction in time that it takes for an appeal to be decided. In an industry where receipt of Medicare payments is often necessary to keep operations up and running, a shortened appeals process will be a welcome change. However, the bad news is that there are new hoops that you must jump through to make sure you win your appeal. This may lead to many services not appealing claims, or not properly appealing claims, and thereby losing money they are owed. Finally, there are provisions of the new Rule that are difficult to categorize as good or bad, such as creation of the new DHHS dedicated ALJs. This could be a good thing for medical providers, in that ALJs will now be more familiar with Medicare policy; however, Medicare may now be more aggressive in arguing its side of these appeals.

Discussing the issue of Medicare appeals gives me the opportunity to raise a side issue: Just because an ambulance claim is denied does not mean that it should not have been paid. Ambulance claims constitute a relatively small portion of all Medicare claims, and therefore the ambulance industry is not top priority when it comes to training the Medicare carrier’s employees. Also, ambulance claims do not use the same coding procedure as virtually every other healthcare industry does. These things often lead to improperly denied claims for ambulance service. By following the proper appeal procedures and making the appropriate medical or legal/coverage arguments, often-denied ambulance claims can be recovered. Of the claims that I handle on appeal on behalf of ambulance service clients, the vast majority are successful. The new rules will make the appeals process a little more difficult to navigate, but don’t let that discourage you from seeking payment for claims you feel were appropriate.

The published Rule is an “interim” final rule and was effective as of May 1, 2005; CMS accepted comments on the Rule until May 9, 2005. Therefore, in the next few months, there should be an additional publication in the Federal Register that will address some of the comments and questions, as well as any changes that CMS deems appropriate. Even though the Rule is currently effective, it will take a while to get it implemented. The target date for implementation for Part A claims was May 1, 2005, and for Part B claims it is January 2006.

To read the entire Federal Register publication, go to:

Nothing in this article should be construed as legal advice. For specific, up-to-date legal advice about the laws mentioned in this article or about your state’s laws, consult an attorney.