Knowledge Base Article

It pains me to admit that my nursing school days are now decades in the past. With that said, there are still key mnemonics that helped me survive the information overload. One particular example is the five stages of coping or D.A.B.D.A. (Denial, Anger, Bargaining, Depression and Acceptance). As I began writing this article it struck me that the stages of coping must be similar to the stages hospital Appeals Coordinators are dealing with in regards to Medicare’s five stages of appeals.

Level 1: Redetermination by a Medicare Administrative Contractor (MAC) a.k.a. Denial

Once a claim has been denied by your MAC, and on internal review you can’t believe that the hospitalization was denied you would request a Redetermination. It is at this level that the MAC will perform a document review of the initial claim determination.

Level 2: Reconsideration a.k.a. Anger

At this point you can become both frustrated and irritated that the same MAC has denied what you believe to be a medically necessary hospitalization twice so you press on to the Reconsideration level. At this level a Quality Independent Contractor (QIC) will perform a document review of the Redetermination and a hospital may still submit any evidence not previously present to support the medical necessity for the admission.  

Level 3: Administrative Law Judge (ALJ) Hearing a.k.a. Bargaining

It is at this level that we will spend the most time on today.

This past July, Nancy J. Griswold, the Chief Administrative Law Judge for the Office of Medicare Hearings and Appeals (OMHA) made a statement before the United States House Committee on Oversight & Government Reform. Ms. Griswold reported that the OMHA adjudication capacity is approximately 72,000 appeals a year. However, “weekly appeal levels have ranged between 10,000 and 16,000 throughout FY 2014. As a result, OMHA had over 800,000 appeals pending on July 1, 2014. At current receipt and adjudication capacity levels, OMHA’s Central Operations, which is the focal point for all incoming appeals, is receiving one year’s worth of appeals every four to six weeks.”

So, what exactly does this translate into at the individual hospital level? According to the OMHA web page, “the average processing time for appeals decided in fiscal year 2014 is 414.8 days.” However, as you continue to look through their web page, by September of this year the average appeals processing time was 514.5 days.

Added to this delay is the recent release of Transmittal 543 where CMS asserts that “significant time and effort is spent by CMS and its contractors to ensure that review staff are making quality decisions. It is important for contractors to support and defend their medical review decisions throughout the appeals process, including at Administrative Law Judge (ALJ) hearings.” In line with this assertion this Transmittal instructs Medicare Administrative Contractors (MACs) “to support their medical review decisions through the ALJ level of appeal.”

Key Guidance in Transmittal 543 Effective October 27, 2014:

• For claim determinations made by the MAC they “shall assign a physician to participate or take party status “ at ALJ hearings,
• The Physician “is generally the primary individual overseeing and/or taking party/participant status, a contractor may elect to have an attorney or clinician take party or participant status, or another qualified individual if approved by the COR.”
• MACs shall determine a process to identify cases that they will participate in at the ALJ level of appeal. “Factors to be examined should include, but not be limited to policy implications, dollars at issue, source of the denial, program integrity matters, and the extent to which a particular issue is, or has been, a recurring issue at the ALJ level of appeal.”
• “MACs shall coordinate with the QIC to ensure timely notification of all ALJ hearings.”
• “For extrapolation cases, the MAC shall be prepared to discuss the background on how the provider/supplier was selected for review, results of the sample case adjudications, as well as matters related to the extrapolation process.”

Why include the MACs now? In part, this could be in response to the 2012 OIG report where the OIG found that improvements are needed at the ALJ Medicare Appeals level, that in FY 2010 the ALJ reversed the decisions of the QICs in favor of the appellants 56 percent of the time, and one recommendation made in this report was to “continue to increase CMS participation in the ALJ appeals.”

This is where the bargaining comes into play. As a hospital, should we stay the course with the appeal even though it may be more than a year before it goes before the ALJ, or should we consider one of the options currently being offered by CMS (Statistical Sampling Initiative, Settlement Conference Facilitation Pilot, or the Medicare Appeals Settlement Offer)?

Level 4: Medicare Appeals Council Review a.k.a. Depression

CMS instructs that “if you disagree with the ALJ decision, or you wish to escalate your appeal because the ALJ ruling timeframe passed, you may request a Medicare Appeals Council review.”

It is also at this level that it would be easy for depression to set in due to the fact that even though you continue to believe in the medical necessity of the case you are appealing you also realize that by now you have spent countless hours and more than likely at least two years or more championing your appeal.

Level 5: Judicial Review a.k.a. Acceptance

Escalation to this level can happen when “you disagree with the Appeals Council decision, or you wish to escalate your appeal because the Appeals Council ruling timeframe passed.” At this level, win or lose, you should be prepared that this is the end of the line for the case you have been defending.

Resources:

Transmittal 543: Defending Medical Review Decisions at Administrative Law Judge (ALJ) Hearings: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R543PI.pdf

Link to OIG November 2012 Report – Improvements are Needed at the Administrative Law Judge Level of Medicare Appeals: http://oig.hhs.gov/oei/reports/oei-02-10-00340.pdf

Link to Statement of Nancy J. Griswold, Chief Administrative Law Judge to the United States House Committee on Oversight & Government Reform: http://oversight.house.gov/wp-content/uploads/2014/07/CMS-Griswold-OMHA-Final.pdf

Link to Medicare Learning Network’s Medicare Appeals Process Fact Sheet (ICN 006562 August 2014): http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/MedicareAppealsprocess.pdf

Link to Statistical Sampling Initiative: http://www.hhs.gov/omha/statistical_sampling_initiative.html

Link to Settlement Conference Facilitation Pilot: http://www.hhs.gov/omha/settlement_conference_facilitation_pilot.html

Medicare Appeals Settlement: http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/InpatientHospitalReviews.html