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From Health Law Daily, October 23, 2014

New Rules for Medicare Provider Administrative Law Hearings

By Richard P. Kusserow, CEO of Strategic Management & Wolters Kluwer Outside Contributor

Over the last year, I have been reporting on problems with the administrative appeals process. One of the major issues has been the complaint from providers that the adjudication of Medicare Administrative Contractors’ (MACs) denials by administrative law judges (ALJ) has been heavily in favor of providers and, as such, causing a lot of wasted time and effort. CMS has now issued Transmittal 543, Change Request 8501, in which it instructs MACs to defend their denials at the ALJ level of review. By this action, CMS is putting MACs on notice that they now have the obligation to support Medicare claims denial decisions, either as a participant or a party, at the ALJ hearing level. These changes have an effective date of October 27, 2014. Now MACs will have to be prepared to participate in administrative hearings concerning medical review decisions. This means that MACs will have to assign a Medical Director, a MAC-employed physician, to participate in or assume party status involving its claim determinations. The stated purpose of this by CMS to ensure the agency and its contractors “are making quality decisions.”

CMS draws a distinction between a MAC’s “participation” and “party” status in the ALJ hearing process. It states that participation includes the filing of position papers, providing testimony, and responding to questions by the ALJ or appellant, as appropriate. A MAC with participation status cannot call its own witnesses or cross-examine other parties’ witnesses. A MAC must make its election to participate and must provide written notice of its election within 10 calendar days of the hearing notice.

A MAC must receive CMS’s prior approval before electing party status. (If a MAC does not receive such approval, it may elect to proceed as a participant.) CMS will assign high priority to cases involving program integrity issues and/or a significant dollar amount of disputed overpayments. Party status permits a MAC to call witnesses, cross-examine other witnesses, and serve certain discovery. A MAC with party status may also file position papers and must be prepared for questioning by the ALJ or other parties.

An important element to any ALJ hearing is the Notice of Opportunity. The new Manual revisions require notification of hearing requests to MACs, as well as a process for MAC physicians to select the cases in which to participate. A MAC will also have to establish a process to determine which cases should be selected for participation at the ALJ level of appeal. The factors a MAC should consider in making such a determination include:

  • Policy implications;

  • The amount of money at issue;

  • The source of the denial;

  • Program integrity matters; and

  • Whether the issue in dispute is or has been a recurring issue at the ALJ level of appeal.

Tom Herrmann, a former ALJ on the HHS Medicare Appeals Council, states that “CMS action will likely prompt significant changes to the format of ALJ hearings, potentially making the hearings more adversarial in nature. It will increase the obligations of both the MACs and providers to have necessary supporting documentation. It also means that providers will have an increased obligation to have a solid legal and factual basis to support the assertion that the claimed services should be covered and paid by Medicare. The failure of a provider to have submitted all supporting evidence at the reconsideration level of appeal will create greater difficulty in being successful at the ALJ level of review. ”

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening. Connect with Richard Kusserow on Google+ or LinkedIn.

Copyright © 2014 Strategic Management Services, LLC. Published with permission.

Companies: Strategic Management Services, LLC

MainStory: TopStory ClaimsAppealsNews CMSNews MedicareContractorNews PaymentNews PartANews PartBNews

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