Knowledge Base Article

It is a curious thing what seems to “stick with you” from your college years. It is even more curious that Elisabeth Kubler-Ross’ five stages of grief is one of those things that for me, stuck. With that in mind, I have been known to attribute the five levels of Medicare Appeals to the five stages of grief.

On January 17, 2017, CMS published a Final Rule making changes to the Medicare Appeals process. More specifically, “this final rule revises the procedures that the Department of Health and Human Services (HHS) follows at the Administrative Law Judge (ALJ) level for appeals of payment and coverage determinations for items and services furnished to Medicare beneficiaries, enrollees in Medicare Advantage (MA) and other Medicare competitive health plans, and enrollees in Medicare prescription drug plans, as well as appeals of Medicare beneficiary enrollment and entitlement determinations, and certain Medicare premium appeals. In addition, this final rule revises procedures that the Department of Health and Human Services follows at the Centers for Medicare & Medicaid Services (CMS) and the Medicare Appeals Council (Council) levels of appeal for certain matters affecting the ALJ level.”

The effective date of the rule is March 20, 2017. With the release of this Final Rule, will hospitals find relief from the grief they have been subjected to over the past several years? That remains to be seen. But for now, let’s look at a couple of highlights from the Final Rule.

Background

Overview of Appeals Process

• Under section 1869 of the Act, the Medicare claims appeal process involves redeterminations conducted by the Medicare Administrative Contractors (which are independent of the staff that made the initial determination).
• The next level is a Reconsiderations conducted by Qualified Independent Contractors (QICs).
• The Medicare Prescription Drug, Improvement, and Modernizations Act (MMA) of 2003 required the transfer of responsibility for the ALJ hearing level of the Medicare claim and entitlement appeals process from SSA to HHS. OMHA ALJs began adjudicating appeals in July 2005, based on section 931 of the MMA.
• The OMHA, a staff division within the Office of the Secretary of HHS, administers the nationwide ALJ hearing program for Medicare claim, organization and coverage determination, and entitlement and certain premium appeals.
• “ALL of the appeals discussed in this final rule can be appealed to the ALJs at the Office of Medicare Hearings and Appeals (OMHA) if the amount in controversy requirement and other requirements are met after these first and/or second level of appeals.”

Recent Workload Challenges

• At OMHA, the number of requests for an ALJ hearing or review increased 1,222 percent, from FY 2009 through FY 2014
• Growth in appeals have been attributed to the following:
• Expanding beneficiary population and utilization of services,
• Enhanced monitoring for payment accuracy in the Medicare Part A and Part B (fee-for-service) programs,
• Growth in appeals from State Medicaid agencies for beneficiaries dually enrolled in both Medicare and Medicaid; and
• Implementation of the Recovery Audit program nationwide in 2009
• OMHA ALJ Productivity
• FY 2009: There was an average of 471 decisions and 80 dismissals per ALJ.
• FY 2014: There was a record average of 1,048 decisions and an additional 446 dismissals per ALJ.
• As of September 30, 2016, OMHA had over 650,000 pending appeals, while OMHA’s adjudication capacity – based on a maximum sustainable capacity of 1,000 appeals per ALJ team – was approximately 92,000 appeals per year.
• HHS has three-prong approach to address the increasing backlog
• Request new resources
• Take administrative actions to reduce the number of pending appeals; and
• Propose legislative reforms that provide additional funding and new authorities to address the volume of appeals.

“In this final rule, HHS is pursuing the three-prong approach by implementing rules that expand the pool of available OMHA adjudicators and improve the efficiency of the appeals process by streamlining the processes so less time is spent by adjudicators and parties on repetitive issues and procedural matters. In particular, we believe the proposals we are finalizing in section II.A.2 below to provide authority for attorneys to issue decisions when a decision can be issued without an ALJ hearing, dismissals when an appellant withdraws his or her request for an ALJ hearing, remands as provided in §§405.1056 and 423.2056 as finalized in this rule or at the direction of the Council, and reviews of QIC and IRE dismissals, could redirect approximately 24,500 appeals per year to attorney adjudicators, who would be able to process these appeals at a lower cost than would be required if only ALJs were used to address the same workload (see section VI below for more details regarding our estimate).”

Precedential Final Decisions of the Secretary

Finalized Proposal: The Chair of the Departmental Appeals Board (DAB) will have authority to designate a final decision of the Secretary issued by the Council as precedential.

CMS perceives that benefits of this finalized proposal include:

• “This would provide appellants with a consistent body of final decisions of the Secretary upon which they could determine whether to seek appeals.”
• “It would assist appeal adjudicators at all levels of appeal by providing clear direction on repetitive legal and policy questions, and in limited circumstances, factual questions.”
• “In the limited circumstances in which a precedential decision would apply to a factual question, the decision would be binding where the relevant facts are the same and evidence is presented that the underlying factual circumstances have not changed since the Council issued the precedential final decision.”

To help ensure appellants and other stakeholders are aware of Council decisions that are designated as precedential…

• Notice of precedential decisions would be published in the Federal Register, and the decisions themselves would be made available to the public.
• Designated precedents would be posted on an accessible website maintained by HHS, and
• Decisions of the Council would bind all lower-level decision-makers from the date that the decisions are posted on the HHS website.
• Make precedential decisions binding meaning “the precedential decision would be binding on CMS and its contractors in making initial determinations, redeterminations, and reconsiderations.

CMS notes that “the designation of a decision as precedential does not create a new law or policy. By designating decisions as precedential, the DAB Chair is merely providing for consistent legal interpretation and analysis of CMS’s existing laws, rule and policies…the mission of the DAB is to provide impartial, independent review of disputed decisions in a wide range of HHS programs under more than 60 statutory provisions. The DAB Chair will continue to advance that mission when designating precedential Council decisions.”

Attorney Adjudicators

Finalized Proposal: CMS proposed and finalized without modification changes to provide authority for attorney adjudicators to issue decisions when a decision can be issued without an ALJ conducting a hearing under the regulations, to dismiss appeals when an appellant withdraws his or her request for an ALJ hearing, to remand appeals as provided in §§405.1056 and 423.2056 or at the direction of the Council, and to conduct reviews of QIC and IRE dismissals.

Also finalized was §405.902 which defines an attorney adjudicator as a licensed attorney employed by OMHA with knowledge of Medicare coverage and payment laws and guidance.

In FY 2015, OMHA ALJs addressed approximately 370 requests to review whether a QIC or IRE dismissal was in error. Also adding to the ALJs’ workload are remands to Medicare contractors for information that can only be provided by CMS or its contractors under current §§405.1034(a) and 423.2034(a), and for further case development or information at the direction of the Council. Staff may identify the basis for these remands before an appeal is assigned to an ALJ and a remand order is prepared, but an ALJ must review the appeal and issue the remand order, taking the ALJ’s time and attention away from hearings and making decisions on the merits of appeals.

CMS estimated in the proposed rule that, based on FY 2015 data, the proposal to expand the pool of adjudicators at OMHA could redirect approximately 23,650 appeals per year to attorney adjudicators. Basing the estimates on FY 2016 data, CMS now estimates the impact to be approximately 24,500 appeals per year.

While this article highlights two issues within the Final Rule it is important to note that this Rule covers many additional areas (i.e. amount in controversy required for an ALJ hearing and CMS and CMS contractors as participants or parties in the adjudication process). For this reason, it is important that key stakeholders within your facility take the time to read this Final Rule.

Resources:

Federal register / Vol. 82, No. 10 / Tuesday, January 17, 2017 / Rules and Regulations at https://www.gpo.gov/fdsys/pkg/FR-2017-01-17/pdf/2016-32058.pdf

CMS Medicare Parts A & B Appeals Process (ICN 006562 May 2016) at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/MedicareAppealsProcess.pdf

Link to 1/17/2017 Federal Register document: https://www.federalregister.gov/documents/2017/01/17/2016-32058/medicare-program-changes-to-the-medicare-claims-and-entitlement-medicare-advantage-organization