Practice Management Alert

The Medicare Part B appeals process requires appellants to begin at the first review step and complete each step before proceeding to the next appeal level. Each step in the process has certain timely filing limits. Some have minimum dollar limits for the amount in controversy. For example, to appeal a claim to the fair hearing step, the appeal request must be made within six months of the review determination and have an amount in controversy of at least $100.
 
To calculate the amount in controversy, take the amount charged for the services and subtract the Medicare allowable for the service and any unmet deductible and coinsurance amounts. In the Medicare Carriers Manual, CMS offers the following formulas:

Step 1:    
   
   Total amount charged for services
 - Total amount allowed for services
  ____________________________
   Difference

 Step 2:

    Difference (from above)
  - Unmet deductible
  _____________________
    Balance = Amount in controversy,
    if services are not subject to coinsurance

 Step 3 for services subject to coinsurance:
     Balance (from above)
   x .80  (80 percent)
     ____________________
     Amount in controversy

For example, an appellant received an unfavorable decision at the review step and wants to proceed to the fair hearing step. The monetary threshold for a fair hearing is $100 or more in controversy. The claim at issue involved $500 in charges, $325 of which was allowed by Medicare. The patient's deductible has been met. To determine the amount in controversy calculate:

    $500
  - $325
    $175
    x .80
    $140
 
The amount in controversy in this example would be $140, which more than meets the fair hearing threshold. But, if the patient had not met the annual $100 deductible and the amount was subject to coinsurance, the fair hearing dollar threshold in controversy would not be met. The calculation in that case would be:

   $500
  -$325
   $175
  -$100
     $75
   x .80
     $60

However, a request for a fair hearing may include multiple claims, and claims may be combined to meet the amount in controversy requirements. You can combine two or more claims if each claim has gone through the review step, a determination on each has been received, and the request for the hearing is timely for all of the claims included in the request. The request for a fair hearing must be made within six months of the date of the review determination.
 
If you intend to aggregate claims to meet the threshold limits, your letter requesting the hearing must clearly state that you are aggregating claims to meet the amount in controversy requirement and list the specific claims that are being grouped. If your letter fails to include those items, the carrier's hearing officer is under instructions from CMS to view the claims separately and dismiss those that fail to meet the minimum dollar limit. The Medicare Carriers Manual states, "If an appellant's request for a hearing does not specifically state that the claims are being aggregated or does not list the specific claims that are being aggregated, treat each claim as an individual request for a hearing, dismissing those that do not meet the amount in controversy."
 
Although claims can be aggregated to meet the minimum dollar limit, the hearing officer does not have to address them in a single hearing or a single ruling. The officer may conduct separate hearings and render separate decisions. The hearing officer also has the authority to decide whether aggregation requirements have been met.
 
Note: CMS issued an update of the Medicare Carriers Manual on Nov. 15, 2001. Part 3 of the manual discusses the appeals process and can be viewed online at www.hcfa.gov/pubforms/progman.htm by selecting Carrier Manual.