Home Health & Hospice Week

Sweeping restructuring could make Medicare appeals faster but harder.

By this fall, your chances of securing an independent ALJ hearing are likely to get slimmer.

Home care providers have had great success getting denied claims paid at the administrative law judge level. Attorney Denise Fletcher of Brown & Fortunato in Amarillo, TX estimates up to 80 percent of her clients see cases overturned by ALJs.

But that could change once the ALJs come under the Department of Health and Human Services umbrella by October, worries attorney Lester Perling with Broad and Cassel in Ft. Lauderdale, FL. Although the ALJs won't be housed directly within the Centers for Medicare & Medicaid Services, CMS still is likely to have a strong influence on them in their new home.

CMS already tries to influence ALJs by furnishing in-services and other "educational" vehicles, Perling says. Now that the ALJs are under HHS' rule, those might become mandatory.

Home care providers have good cause to worry about ALJs' independence, judges Bob Wardwell with the Visiting Nurse Associations of America. "I know how irritating ALJ reversals have been" to CMS, says Wardwell, a former top CMS official. "CMS would like to see these decline through better 'educating' ALJs in how CMS interprets policy," Wardwell tells Eli.

Evidence: One major sign of CMS' intent to exert influence is a provision in the interim final rule on Medicare appeals changes published in the March 8 Federal Register. ALJs and the new qualified independent contractors (QICs) both must give "substantial deference" to local coverage determinations (LCDs), local medical review policies (LMRPs) and Medicare program guidance such as manuals, CMS claims in the regulation.

This requirement "can definitely create new obstacles to fair decisions," warns William Dombi, vice president for law with the National Association for Home Care & Hospice's Center for Health Care Law.

The provision is at least an improvement over the proposed rule, which said QICs and ALJs were "bound" by LCDs, LMRPs and CMS guidance.

QICs Could Be Mixed Bag for Appeals

The ALJ move is just one of many appeals changes CMS proposed in the interim final rule. The changes required by legislation aim at making the appeals process faster and more efficient, but they could make appeals tougher for providers instead.

One of the biggest changes is implementing the new QICs. These second-level appeals contractors aim to offer a more independent review of provider appeals than the intermediaries or carriers that made the claims determinations in the first place. The QICs will take the place of fair hearing officers at durable medical equipment regional carriers and will create a whole new level of appeals for home health agencies and hospices.

QICs "will not only reassure appellants of the independence of the reconsideration process, but also offer them for the first time routine reconsideration, by a panel of physicians or other health care professionals, of all medical necessity issues, "CMS cheers in the rule.

CMS expects that over time, providers will request fewer ALJ and Departmental Appeals Board Medicare Appeals Council appeals as they receive more independent reviews from QICs, the agency says.

Experts are cautiously hopeful that the QICs really will bring some independence into the earlier appeals stage. But they also remain skeptical, given that the QICs will, after all, be just another CMS contractor. "It's only human nature to be concerned about what the person who is writing your check wants," Perling notes.

And providers want more details about exactly who will be staffing the QIC review panels. Fletcher is hopeful that a panel of health professionals will be able to more accurately review medical necessity issues. But if the reviewers have little to no experience with the items at issue - for example, a nurse with hospital pediatric experience reviewing a claim for a power wheelchair for an elderly person - their health care background may not matter.

CMS maintains that the final rule is not the place to discuss the particulars of the QIC structure.

Submit Evidence Now or Never

One of the most burdensome changes for providers will be the requirement for "full and early presentation of evidence." Providers must submit any and all evidence for the appeal at the second level to the QICs, CMS instructs.

This is a huge change for Part A providers, who never even had a second level of appeals before and just went straight from the redetermination to the ALJ hearing, Perling notes.

Suppliers rely heavily on documentation from physicians to support their claims, and that documentation is notoriously difficult to obtain, Fletcher worries. "Physicians don't just hand over their medical record," she points out. "You have to work hard to get your evidence together, and that takes a while."

Providers will have the opportunity to submit additional documentation while the QIC is considering the case, the rule states. But every time you submit new documentation, you push back the decision timeframe by an additional 14 days.

The rule seems particularly unfair, because CMS and its contractors are free to submit evidence at the ALJ level, observers protest.

CMS and its contractors also now can participate in the ALJ hearings, including invoking party status and therefore calling witnesses, cross-examining existing witnesses, etc. "That is a huge change from the current structure," Dombi stresses. The arrangement "could definitely put providers that are not represented by counsel at a big disadvantage."

Will Appeals Get Faster?

Observers applaud the new appeals decision timeframes - if they really work. Suppliers that have been hit with overpayments or coverage denials especially will benefit from the quick decisions, Dombi predicts. Some of Fletcher's clients wait more than three years to reclaim incorrect overpayments, she says.

"Anything to make appeals faster and better is good," Fletcher says. "But I have my doubts these changes will help with that."

CMS seems to have already laid out a number of loopholes for the deadlines. Besides the 14-day extension for new evidence at the QIC level, providers also waive the 90-day ALJ timeline if they want a face-to-face rather than teleconference hearing, Dombi points out.

And if QICs, ALJs and the MAC don't make the decisions in time, they must send a notice to providers giving them the chance to escalate the case up to the next level. But there are good reasons to not escalate the case, CMS points out in the rule. For example, if you skip the ALJ level and proceed to the MAC level, you'll never get a face-to-face hearing.

Technical Errors Remain Unresolved

Observers are disappointed that the provision in MMA requiring a simple correction for technical errors rather than an appeal has resulted in little to no change. CMS is interpreting the provision to fall under the clerical error procedure it already has in place, where contractors reopen the claims and correct them for clerical errors such as computational mistakes or incorrect data entry.

"I have to wonder why Congress went to all the trouble to legislate the technical corrections provision when CMS has stated that their policy always allowed the kinds of correction(s)" legislated, Wardwell says. "Either Congress was misguided ... or CMS is minimizing the scope of the provision to their existing policy."

Contractors can decide whether a problem counts as a clerical error and therefore whether to reopen a claim to correct it, CMS says. Because of that discretion, providers may have to file an appeal anyway to protect against an unfavorable reopening decision that comes too late, Dombi predicts. 

Editor's Note: The interim final rule is at www.access.gpo.gov/su_docs/fedreg/a050308c.html. CMS will take comments on the reg until May 9.