Home Health & Hospice Week

Pre-pay claims denials are exempt.

You may be one of many providers that cheered when CMS limited the scope of review for appeals — but the new guidance only goes so far.

Reminder: Before Aug. 1, Medicare Administrative Contractors and Qualified Independent Contractors had “discretion while conducting appeals to develop new issues and review all aspects of coverage and payment related to a claim or line item,” the Centers for Medicare & Medicaid Services explained in MLN Matters article SE 1521 (see Eli’s HCW, Vol. XXIV, No. 31). “As a result, in some cases where the original denial reason is cured, this expanded review of additional evidence or issues results in an unfavorable appeal decision for a different reason.” But after that date, “for redeterminations and reconsiderations of claims denied following a post-payment review or audit, CMS has instructed MACs and QICs to limit their review to the reason(s) the claim or line item at issue was initially denied,” CMS says in the article.

The limit is very helpful for scenarios like this: Medicare paid your claim, but a Zone Program Integrity Contractor (ZPIC), Recovery Audit Contractor (RAC), Comprehensive Error Rate Testing (CERT) contractor or MAC reopened and reviewed the claim in a post-payment review or audit. The contractor decides to deny coverage of your claim. You appeal a denied claim following a post-payment review or audit by a MAC or a QIC. Your appeal is solid, and the MAC or QIC should provide you with a favorable redetermination or reconsideration. But instead, the contractor gives you an unfavourable appeal decision for a different reason after performing an expanded review of other issues or additional evidence. The new guidance prevents this.

Impact: “This change will likely result in fewer denials at redetermination and reconsideration, thereby relieving some of the ongoing backlog at the Administrative Law Judge review level,” stated a recent analysis by law firm Polsinelli. “Providers and suppliers were often frustrated because the original reason for denial had been cured (e.g., lack of documentation), but the claims were then denied for new reasons without any ability to explain or even know the issue prior to the denial.”

No-go: Beware that this new limitation for the scope of review applies only to certain claims, says Lanchi Bombalier, an associate attorney in the Atlanta office of Arnall Golden Gregory. For instance, the guidance applies to claims denied in a post-payment review or audit only; it doesn’t extend to appeals involving a claim or line item that a contractor denied on a pre-payment basis. In this case,

“MACs and QICs may continue to develop new issues and evidence at their discretion and may issue unfavorable decisions for reasons other than those specified in the initial determination,” CMS says. Also, CMS is still instructing contractors to follow existing procedures regarding claim adjustments

following favorable appeal decisions. This means that these adjustments will continue to process through CMS systems and could suspend due to system edits. For claims adjustments that don’t process to payment due to additional system-imposed payment limitations, conditions, or restrictions, you’ll receive new denials with full appeal rights.

Another stipulation: Also, if a MAC or QIC denied your claim on post-payment review because you failed to submit requested documentation, “the contractor will review all applicable coverage and payment requirements for the item or service at issue, including whether the item or service was medically reasonable and necessary,” CMS notes. In other words, if a contractor initially denied your claim for insufficient documentation, the contractor could deny your appeal if you submit additional documentation but it doesn’t support medical necessity.

No going back: The new instructions to contractors in SE1521 are effective for redeterminations and reconsideration requests that a MAC or QIC received on or after Aug. 1, 2015. CMS is not applying the instruction retroactively, so you cannot request a reopening of a previously issued redetermination or reconsideration specifically to apply this scope of review limitation.