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July 8, 2009

Five Could Get You Three in the Appeals Process

By
lfotheringill120dsBy: Linda Fotheringill, Esq.

 

Many providers are planning to appeal all claims wrongfully denied by the RACs, and also are attempting to calculate the financial impact of potential RAC denials within their facilities. Therefore, the time frame within which one can expect a final decision is critical to forecasting.

 

Unfortunately, due to the variable nature of the five-level Medicare appeals process, it is not possible to nail down such a window. For instance, the reviewing entities (i.e., Fiscal Intermediaries/MACs, Qualified Independent Contractors, Administrative Law Judges, and the DAB/Medicare Appeals Council[1]) are given 60-to-90 day time frames to reach their decisions.  However, these entities cannot always meet those time goals and the provider's only recourse in such a case  is to advance to the next level, which may not be advantageous. Furthermore, Providers may wish to file all appeals promptly, but may not be able to do so due to sheer volume or staffing issues. Therefore, each claim easily could take anywhere from 12 to 24 months to go through to a decision at Level Five (the American Hospital Association provides a beautiful flow chart of the Medicare appeals process on its Web site.)

 

If there is any silver lining to this situation, it may be that most claims more than likely will be resolved by Level Three (if not before), which is the Administrative Law Judge Hearing. In my opinion, there will be relatively few claims that are appropriate to appeal to Level Four and Level Five, which will shorten the time frame for final determinations.

 

Why do I say this?

 

First, this has been the case historically in the RAC Demonstration. According to the January 2009 "Update to the Evaluation of the 3 YearDemonstration," of 42,794 appeals made on a total of 274,952 Part A claims with overpayment determinations, only 197 claims went to Level Four. There was only a 32.8 percent favorable determination rate for providers across  all appeal levels (statistics were not provided as to whether any claims were filed in U.S. District Court - Level Five.)

 

Another factor to keep in mind is that in order to go to Level Four, the Medicare Appeals Council Review, your request must be granted by the Medicare Appeals Council ("AC"). In other words, the AC can take a number of actions, including denying or dismissing your request for review.  In general, the AC will only review a case if:

 

(1) There appears to be an abuse of discretion by the administrative law judge;

(2) There is an error of law;

(3) The action, findings or conclusions of the administrative law judge are not supported by substantial evidence; or

(4) There is a broad policy or procedural issue that may affect the general public interest.

 

Finally, it has been my personal experience that most administrative law judges do their best to consider carefully evidence presented in order to come to a thoughtful conclusion about the case. The ALJ's decision is provided in a detailed written format and rarely contains opinions that rise to the level of an "abuse of discretion", "an error of law", or a conclusion "not supported by substantial evidence".

 

What Does This Mean? It means that many, if not most, of your RAC denials which involve determinations as to whether medical necessity criteria were met may not meet the AC standard for review of the ALJ decision (assuming, of course, that your ALJ carefully considered the evidence and appropriately applied the law.)

 

In short, this means that Level Three more than likely will conclude the appeal process for most of your claims. Hopefully, you will receive a favorable determination from the ALJ, and you can begin the process of recouping your lost revenue

 

About the Author

 

Linda Fotheringill, Esq, is a founding member of Washington West, LLC, and is a nationally recognized expert on denial and appeals management. Ms. Fotheringill successfully assists hospitals across the country, overturning "hopeless" denials and generating millions of dollars in otherwise lost revenue.

 

Contact the Author: l.fotheringill@washingtonwest.com

 


[1]

The Departmental Appeals Board (DAB) is a Board established in the Office of the Secretary of the U.S. Department of Health and Human Services (DHHS) whose members act in panels to provide impartial review of disputed decisions made by operating components of the Department or by its ALJs. The Medicare Appeals Council is a division of the DAB.

 

Linda Fotheringill, Esq.

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