Home Health News

It will still be several months before home care providers begin to experience Recovery Audit Contractor activity. As we have explained in previous articles, each contractor must first file an application with CMS for permission to examine home care agencies. Following that, that must provide training in the region they intend to enter.

The permission requirement stems from the law creating the RACs. It limited their activities to exactly what was done during the 3-year demonstration project. Since no home care agencies were approached by the demonstration contractors, the permanent contractors cannot work in home care, or hospice, without CMS approval. Regarding the training requirement, we have heard of only two instances so far where a contractor attempted to provide it, one in New Jersey and one in Ohio. In both instances, the trainers seemed to know little or nothing about home health care.

While waiting, we continue to help readers brush up on the basics of the appeals process following existing payment denial methods. Though RACs will take your money in new ways and for new reasons, the process of recovering it will be the same. The following is from a guide CMS published recently, informing Medicare beneficiaries and providers about their rights and responsibilities under today’s appeals rules.

Appeal Rights under Original Medicare
Individuals enrolled in Original Medicare may file an appeal if they believe Medicare should have paid for, or did not pay enough for, an item or service that they received. An individual’s appeal rights are on the back of the Medicare Summary Notice (MSN) mailed to Medicare beneficiaries after they receive services. The MSN explains why a bill was not paid and how to file an appeal. The providers and suppliers of services that file claims on behalf of Medicare beneficiaries may also file appeals.

Background on Medicare Contractors
CMS contracts with private insurance companies to perform many functions on behalf of the Medicare program, including processing claims for Medicare payment and carrying out the first level of the Medicare claims appeals process. Historically, these companies have been known as fiscal intermediaries (FIs) for Part A services and carriers for Part B services; however, as directed by section 911 of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003, both Part A and B work is being integrated under new entities called Medicare Administrative Contractors (MACs). For more information on MAC implementation, see: http://www.cms.hhs.gov/MedicareContractingReform.

Original Medicare (Fee-For-Service) Appeals Process
Once a Medicare contractor makes an initial decision about whether a service is covered by Medicare and how much to pay for the claim, Medicare beneficiaries, providers and suppliers have the right to appeal these decisions. By law, Medicare offers five levels in the Part A and Part B appeals process. The levels, listed in order, are:

• Redetermination by the Medicare payment processor – FI, carrier, or MAC
• An individual, provider, or supplier must file an appeal within 120 days of the initial decision on a claim.
• The FI, carrier, or MAC must issue its decision within 60 days.
• Reconsideration by a Qualified Independent Contractor (QIC)
• An individual, provider, or supplier must file an appeal within 180 days of the redetermination.
• The QIC must issue its decision within 60 days.
• Hearing by an Administrative Law Judge (ALJ)
• An individual, provider, or supplier must file an appeal within 60 days of the QIC’s reconsideration, provided that the case involves at least $120 in dispute.
• The ALJ must issue a decision within 90 days.
• Review by the Medicare Appeals Council within the Departmental Appeals Board.
• An individual, provider, or supplier must file an appeal within 60 days of the ALJ’s decision.
• The Medicare Appeals Council must issue a decision within 90 days.
• Judicial Review in U.S. District Court–An individual has 60 days to file for judicial review, provided that at least $1,180 remains in dispute.

Additional detail on each level in the appeals process is available from CMS and has been posted at: http://www.cms.hhs.gov/OrgMedFFSAppeals.

Redeterminations
In 2007, FIs and MACs processed over 186 million claims* for services furnished by hospitals, skilled nursing facilities, home health agencies, and other providers. Of these claims, approximately 8%, 14.5 million, were denied (e.g., services not covered, services not medically necessary, etc.). FIs and MACs carried out approximately 240,000 Part A redeterminations in 2007, meaning that about 1.7% of these denials resulted in requests for an appeal.

Carriers and MACs processed over 978 million claims, of which nearly 16%, 155 million, were denied. Carriers and MACs carried out approximately 2.5 million Part B redeterminations in 2007, representing about 1.6% of all denied Part B claims. CMS has published a document with more information about redeterminations at:
http://www.cms.hhs.gov/OrgMedFFSAppeals/02_RedeterminationbyaMedicareContractor.asp#TopOfPage

*While these include claims for Medicare Parts A & B, for ease of reference, the CMS report refers to all appeals of these types of claims as “Part A.”

Redetermination Categories

Redetermination Dispositions

A “favorable” decision means that the appeal was successful and the claim in dispute was paid. An “unfavorable” decision means that an appellants’ appeal was denied. Calculation of the reversal rates above excludes cases that were dismissed.

Reconsiderations

All reconsiderations are adjudicated by the Qualified Independent Contractors (QICs). There are two Part A QICs, two Part B QICs and one DME QIC. The QICs processed approximately 400,000 appeals in 2007.
More information about reconsiderations is available at: http://www.cms.hhs.gov/OrgMedFFSAppeals/03_ReconsiderationbyaQualifiedIndependentContractor.asp#TopOfPage