The Medicare appeals process is experiencing a sustained increase in the number of appeals, as highlighted earlier this year by the Texas Association for Home Care and Hospice and Liles Parker PLLC. This increase, coupled with only modest increases in funding, has created a significant backlog of appeals at the third and fourth levels of appeal.
In an effort to stem the ever-increasing tide of claim appeals, the Centers for Medicare & Medicaid Services (CMS) recently issued new guidance to its Medicare Administrative Contractors (MACs) and Qualified Independent Contractors (QICs) who help review claims regarding the conduct of requests for redetermination and reconsideration. Upon second review, new or additional denial reasons may not be added.
Effective August 2015, MACs and QICs may no longer review claims denied during post-payment audits and develop their own bases for unfavorable appeal decisions. Instead, the contractors are now required to review claims in light of the denial reason set forth by the entity that performed the initial audit. This should significantly decrease the number of claims held hostage for payment in the administrative appeals process backlog. However, this rule will not be applicable in cases where claims were denied on a post-payment basis because the providers failed to submit medical records.
It is important to emphasize that Administrative Law Judges (ALJs) who conduct hearings at the third level of the appeals process are not subject to this rule as well. Medicare regulations are clear that ALJs are free to conduct de novo reviews of claims and are not bound by the decisions of prior adjudicators or auditors.
To help address the backlog of appeals, the U.S. Department of Health and Human Services (HHS) announced on June 28 proposed changes to the Medicare appeals process that would streamline administrative appeal processes, increase consistency in decision making across appeal levels and improve efficiency for both appellants and adjudicators.
The HHS three-pronged strategy includes:
1) Investing new resources at all levels of appeal to increase adjudication capacity and implement new strategies to alleviate the current backlog.
2) Taking administrative actions to reduce the number of pending appeals and encourage resolution of cases earlier in the process.
3) Proposing legislative reforms that provide additional funding and new authorities to address the appeals volume.
The proposed regulatory changes are the latest in a series of administrative actions designed to reduce the number of pending appeals and encourage resolution of cases earlier in the Medicare appeals process. The proposed changes demonstrate HHS’s continuing commitment to addressing the Medicare appeals workload challenges, and is one part of HHS’s comprehensive effort to address the appeals workload through every available administrative means under current statutory and budgetary authorities.
In addition to these administrative actions, the President’s Fiscal Year 2017 budget requests additional funding to bring the capacity to address claims in line with current appeal volume. The budget request also includes a comprehensive legislative package aimed at both helping HHS process a greater number of appeals and encouraging resolution of appeals earlier in the process.
We estimate that the backlog of appeals could be eliminated by FY 2021 if the Administration could implement the administrative authorities set forth in HHS’s proposed changes, in conjunction with the proposed funding increases and legislative actions outlined in the President’s FY 2017 budget.
In Part 6, we will take a look at Recent Civil Liability – False Claims Act.