In 2005, the Centers for Medicare and Medicaid Services (CMS) published an interim final rule making significant changes to the Medicare appeals processes.  CMS claims that the changes set forth in this final rule will “produce substantial improvements in the efficiency of the Medicare appeals process.”  These changes affect all levels of Medicare Appeals beginning January 1, 2006.  Key changes follow.

• Now, there is a single uniform appeals procedures for Part B (physicians and certain other entities reimbursed under the Physician Fee Schedule) and Part A (hospitals, nursing homes, home health, etc.) claims.
• The time frames for appeals decisions are compressed (60 days for first and second-level appeals; 90 days for subsequent ALJ and Medicare Appeals Council appeals).
• A new uniform second-level appeal to be conducted by Qualified Independent Contractors (QICs) using panels of physicians or other appropriate health care professionals replaces the Carrier-level hearing officers.
• Health care providers and suppliers must submit all relevant evidence to the QIC prior to the issuance of the QIC’s decision.  (Before now, providers could provide supplemental medical records or other documentation at any level of appeal.)  Failure to do so will preclude the provider or supplier from introducing such evidence in higher-level Administrative Law Judge (ALJ) or Medicare Appeals Council (MAC) appeals.
• The requirement that providers or suppliers have an “assignment of appeal rights” from a beneficiary in order to directly pursue appeals of Medicare determinations is now gone.

Other changes in the new rule address procedures for higher-level ALJ and MAC reviews.  While CMS has previously been allowed to provide informal input at ALJ hearings, the new rule specifically permits an ALJ to request CMS to participate in the hearings by filing position papers or providing testimony.  Further, CMS may on its own motion request to act as a party to an ALJ hearing, in which case it may call and cross-examine witnesses.  The result is likely to be that ALJ hearings will be more adversarial than before and that providers and suppliers will have to expend more time and effort in countering CMS’s motions and evidence presented.  Finally, the new rule requires that all ALJ hearings be conducted by videoconference unless the required technology is unavailable or other special circumstances warrant holding an in-person hearing. 

CMS has directed fiscal intermediaries to provide clear appeal instructions to providers and suppliers in their decision notices.  These new rules add much more formality to the Medicare appeals process, and they will require providers to fully prepare their cases at very early stages of the appeals process.  Providers should carefully review their processes for responding to Medicare denials and overpayments in light of these new rules.  Several attorneys in our Health Care Practice Group have specific knowledge in these areas and have been very successful in handling Medicare appeals for physicians and other health care clients.  So, as needed, please feel free to call the Taft attorney with whom you work most often or any of the Health Care Practice Group members listed to the right of this bulletin with any questions or if you need assistance with these matters.