By William H. Maruca, Esq.

Published August 2001

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The new appeal entities, designated "Qualified Independent Contractors" (QICs), will be required to utilize panels of physicians or other appropriate health care professionals in their decision-making. After the first level of internal carrier review, the provider must request reconsideration by a QIC within 180 days. The QIC must issue decisions within 30 days of receiving a request for review (with a possible 14-day extension at the request of the appellant). If the QIC does meet the 30-day deadline, the appellant may skip this step and appeal directly to an Administrative Law Judge (ALJ). There is no minimum amount in controversy for bringing an appeal to a QIC. The QICs must consider clinical experience and medical, technical and scientific evidence in cases that involve medical necessity. The QICs must issue detailed written explanations of the basis of its decisions, and those explanations will be made public.

BIPA makes a major improvement over the current system by expressly stating that the QICs are not bound by carrier local medical review policies.

Currently, a physician or other provider must first appeal a Medicare payment decision or audit determination through a Fair Hearing Officer. The Fair Hearing Officer is required to apply the carrier’s policies, including Local Medical Review Policies. Since these policies are often at the heart of the dispute, this can be a frustrating step. Only after a Fair Hearing can the provider seek an appeal before an ALJ. The ALJs are employed by the Social Security Administration and may consider, but are not required to follow, local carrier policies.

Under current law, Medicare appeals differ for claims filed under Part A (hospital services) and Part B ([physician and ancillary services). In Part A appeals, the first step of appeal is an intermediary reconsideration, the second step is to an Administrative Law Judge (ALJ); the third step is to the Departmental Appeals Board (DAB), and finally, an appeal may be brought to Federal Court.

In Part B appeals, current law provides for two levels of appeal at the carrier level: carrier review and then a carrier fair hearing before a hearing officer. Performance standards for carriers require most reviews to be completed within 45 days and most fair hearings to be completed within 120 days. Fair hearing decisions may be appealed to an ALJ, then to the DAB, and finally to Federal court. The amounts in controversy are $100 for a carrier fair hearing, $500 for an ALJ appeal (except for home health, which is $100), and $1,000 for Federal court. Suppliers that have accepted assignment, and beneficiaries, have their own appeal rights. Providers may appeal in their own name only in certain circumstances. Also, providers and suppliers may represent the beneficiary in an appeal.

In both Part A and Part B appeals, current law imposes no deadlines on either the DAB or the ALJ to hear appeals. Further, in both Part A and Part B cases, where a provider or supplier represents the beneficiary, the provider/supplier must waive the right to receive payment for such representation. In certain cases, the provider/supplier must also waive the right to receive payment from the beneficiary for the service provided.

Under BIPA, a physician who disagrees with a local carrier policy will be able to challenge that policy at the first level of review.

BIPA also creates a 72-hour expedited review for patients who are about to be discharged from a hospital or other facility, or where a facility plans to terminate services and a physician certifies that such termination would put the patient’s health at significant risk.

The method for establishing both national coverage policies as well as local policies, which vary from carrier to carrier, is also changing for the better.

HCFA requires decisions on requests for National Coverage Determinations (NCDs) to be made within approximately 90 days of a request. A decision could include a national coverage determination, a national non-coverage decision, a referral for a technology assessment, or referral to the Medicare Coverage Advisory Committee (MCAC). NCDs are valid throughout the Medicare system and are binding on ALJs and the new QICs.

Effective October 1, 2001, BIPA will change the procedure for making NCDs where a patient in need of an item or service requests a NCD. It places a 90-day deadline on action by the Secretary of Health and Human Services and this deadline cannot be extended due to receipt of additional information. In general, when making any NCD, the Secretary must ensure that the public has an opportunity to comment on a NCD prior to its implementation and must identify the basis for the determination, including response to public comments and any underlying assumptions.

In place of the largely unregulated Local Medical Review Policies, BIPA requires that Local Coverage Determinations (LCDs) made by carriers be reviewed by an SSA ALJ, who may take evidence, consult with the appropriate scientific and clinical experts, and is to look at the reasonableness of the determination. LCDs are defined as area-wide determinations by intermediaries and carriers regarding coverage under the "reasonable and necessary" clause of the statute. Both NCDs and LCDs will be subject to court review.

These changes will be welcomed by all providers who have ever had to appeal Medicare payment decisions through the current system and have been frustrated by local carrier policies that vary from place to place and are frequently counterintuitive at best and of questionable merit at worst.

Under the current system or under the improved system, a physician should always have qualified guidance when navigating the complex process of Medicare Part B appeals. As before, the best approach when initially submitting claims or when appealing payment decisions is to anticipate what carrier personnel are looking for and give it to them clearly, accurately and completely. In the appeal/post-payment review setting, this may mean having your charts reviewed by an outside expert (which should always be done through your attorney to ensure attorney-client privilege), and providing currently-dictated (never backdated) narrative summaries of each chart and additional relevant information such as lab and diagnostic test results, medication lists, hospital discharge summaries, and reports from other physicians managing the patient’s care to help establish the level of service provided and its medical necessity.

William H. Maruca, Esq., is a shareholder with the Pittsburgh law firm of Kabala & Geeseman.