October 23, 2017
By: Roy Edroso
Some alternatives in the Medicare appeals process may save you time and money once you get to the third level – but if you’re not bringing a strong enough case, that savings may vanish.
In January, CMS changed the way Medicare appeals are administered and conducted by OMHA (Office of Medicare Hearings and Appeals) (PBN blog 1/13/17). Most of the changes, such as limiting the number of entities that can take part in appeals hearings to one and letting adjudicators issue fully favorable decisions without a hearing or even prior notice to the appellants, are “tweaks” to speed up proceedings and help cut through OMHA’s enormous backlog of cases, says Andrew Selesnick of the Buchalter law firm in Los Angeles.
Alternative to ALJs
But a major change in the rule was the admission of attorney adjudicators (AAs) to deal with some cases normally handled by administrative law judges (ALJs) at the third level of appeal, after the provider loses at the first (redetermination) and second (reconsideration) levels. AAs are licensed attorneys who can review a case, assess facts and make decisions. But they can’t conduct hearings or perform certain other ALJ functions such as calling in an OMHA expert.
CMS says the change “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.” Note: OMHA had more than 650,000 pending appeals as of October 2016.
“If all the issues can be decided by reviewing the record, without need for live testimony, cross examination or oral argument, the attorney adjudicator process would be a way to expedite a determination,” says William H. Maruca, a partner with the Fox Rothschild law firm in Pittsburgh. But “if you plan to introduce testimony or raise new issues that were not raised in the prior appeal,” it won’t save any time, as attorney adjudicators are supposed to refer cases that need hearings to an ALJ.
Some changes better for big loads
The final rule also made some changes to the appellant’s ability to challenge findings from OMHA’s “Statistical Sampling Initiative,” including a requirement that appellants give a reason for each sample claim they challenge. The sampling initiative, which began in 2014, allows providers headed to the ALJ to have several of their reconsideration decisions reviewed at once. Sampling allows a panel of OMHA reviewers to boil down large caseloads – between 250 and 10,000 claims – much as a Medicare auditor would, based on a random sample of claims whereupon one or more ALJs will rule on the cases as if it were one large case.
It would seem to be a time-saving alternative for cases involving hundreds of claims – and also for caseloads in which individual claims may not rise to the “amount in controversy” (AIC) of $160 required to hold the appeal.
Many providers will have large numbers of cases going through the system at once, says Wayne J. Miller, health care law attorney and partner at Compliance Law Group in Los Angeles. “RAC [recovery auditor] and ZPIC [zone program integrity contractor] audits often look at many years of billings so that their audits can result in very large overpayments involving hundreds of claims,” says Miller. “Often too their audits are cursory and can have a lot of errors. A provider may have significant cost in pursuing these cases — but at the same [time] may have such a large potential liability that providers are essentially forced to appeal.”
However, says Miller, “if the case involves medical necessity or appropriate code use issues — which is often the case -the sampling option may help or hurt the appellate provider depending on how representative the chosen samples are.” Also, if the case doesn’t go the provider’s way, “the provider may have to spend more time and money evaluating, and if necessary challenging, the sampling process, in addition to dealing with the substantive issues on appeal — so the overall cost and time in pursuing these cases may increase” rather than decrease, says Miller.
Choosing appropriately matched cases for sampling with a strong rationale for appeal may increase your chances of a favorable outcome, says Selesnick.
“When we litigate in court, we are always seeking a common issue – no judge is interested in wading through a claim-byclaim process,” says Selesnick “For example, we get denials on Part C (Medicare Advantage) cases because there was no pre-authorization. If they all came through emergency room, you might be able to group those together and make the argument that since they were all emergencies, unstable for transfer, the pre-authorization shouldn’t be required. Those you might do it, especially if there’s a decent volume and money at stake.”
Be careful of bad precedent
Some of the allegedly time-saving features in the final rule you won’t have much to say about – for example, “precedential” decisions. The HHS Departmental Appeals Board (DAB) is authorized to designate some decisions from the fourth level of appeal, Medicare Appeals Council, to be used as guidance for similar cases, “providing clear direction on repetitive legal and policy questions, and in limited circumstances, factual questions” in cases involving “recurring legal issues.”
“It could be helpful, but the problem is hard cases make bad law,” says Selesnick. “People aren’t well-versed in what precedent means or how it applies, as opposed to a court of appeals. … When you go before a court of appeals, you may disagree with the decision, but when they make it, you can see they know what they’re doing. They recognize what to do when things have to serve as guidance. I’m not satisfied that that sort of system has been set up in Medicare.”
Selesnick’s recommendation to CMS: “Do a study of how many cases were affirmed at level 1, and if it’s a hugely high percentage, if they see it’s a rubber stamp, they should just cut out that whole level of bureaucracy and get everyone closer to where they want to be.”
Used by permission of Part B News