Medicare Compliance & Reimbursement

A final rule published in the Nov. 7 Federal Register rounds out the arsenal available to Medicare beneficiaries and others to request or appeal local and national coverage determinations.

The rule implements portions of Section 522 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000. It lays out procedures for "aggrieved parties" - i.e., beneficiaries "in need of the items or services that are the subject of the coverage determination" - to seek "review" of national and local coverage determinations. An NCD is a determination by the Department of Health and Human Services Secretary as to whether or not a particular item or service is covered by Medicare, while an LCD is a similar determination made by, and applying only to, a local Medicare contractor.

NCD review requests are to be heard by the HHS Departmental Appeals Board. LCD review requests go first to an administrative law judge, and then the losing party may appeal to the board. The Centers for Medicare & Medicaid Services rejected suggestions that it be prohibited from appealing decisions to the board because of concerns about conflicts of interest and burden on beneficiaries, saying in the rule's preamble that governmental appeal rights can "ensure that ALJs are applying the statute and regulations correctly, even if we rarely employ this strategy."

The BIPA procedure for requesting review of NCDs differs from the non-BIPA procedure for seeking "reconsideration" of NCDs that CMS set forth in a Sept. 26 final rule. In the rules' preambles, CMS explains that the reconsideration process is outside strict BIPA timetables and is focused on allowing all interested parties to share relevant clinical and scientific information with agency experts, who can then make appropriate modifications to coverage policy.

By contrast, the NCD review process is more adjudicatory. Parties other than aggrieved parties may participate only by aiding the beneficiary or, when permitted, in an amicus curiae role. (Amicus participation is never allowed in LCD reviews.) In NCD and LCD reviews, neither the ALJ nor the board may rewrite the relevant coverage policy, although a policy that has been held invalid in a review proceeding will not be applied prospectively to other beneficiaries."

As before, beneficiaries may also choose to appeal only their individual claim denials, without challenging entire coverage policies. However, they are unlikely to see these appeals completed within the timeframes mandated by Section 521 of BIPA, which took effect October 1, 2002.

The General Accounting Office found "a substantial gap between carriers' current performance and that required by BIPA's standards," which CMS says it needs more administrative funding to implement. For example, GAO said, "at the first level of appeals - the carrier review - carriers completed about 91 percent of their fiscal year 2001 reviews within CMS' current 45-day time frame, but they completed only 43 percent within BIPA's 30-day deadline.