The formal appeals process
The formal appeals process
The first step in the formal appeals process is to appoint a representative that will act on behalf of the organization. The representative may be an attorney, an HIM professional or any professional that can assist and provide expertise in processing of claims or assist the organization in the appeals process. Appointments are only good for one year and either a new representative will need to be appointed on a yearly basis or the same representative will need to renew their appointment status (CMS Appeals Fact Sheet, 2014). Medicare offers five levels in the Part A (inpatient) and B (outpatient) appeals process.
Appeal Level 1 – “Redetermination” request to Fiscal Intermediary (FI), Medicare Administrative Contractor (MAC) or Carrier. Hospitals have to file a request for “redetermination” within 120 day of the date they received the “Demand Letter” or the initial decision on a claim from the auditor. However, if hospitals want to stop recoupment of money they must send a request for redetermination within 30 days from the date they received the Demand Letter (AHA, 2009). Hospitals should include supporting documentation along with the Redetermination request. The FI/MAC has 60 days to conduct a review, decide and send out “Notice of Review Decision” or “Redetermination Decision” to the hospital. If FI/MAC decides the denial is legitimate but hospital disagrees with MACs decision, hospitals may continue to the second level of the appeals process where they can request reconsideration by a Qualified Independent Contractor (Easterling, 2011).
Appeal Level 2 – “Reconsideration” through Qualified Independent Contractor (QIC). Hospitals must file a reconsideration request within 180 days from the receipt of FI/MAC redetermination decision. Hospital must clearly explain why they disagree with the redetermination decision, provide a copy of redetermination decision along with any missing evidence and supporting documentation. This is the last level the hospital can submit additional supporting evidence. Evidence not submitted in this level may be excluded from consideration from proceeding appeals levels. QICs usually send a decision to all parties within 60 days however if a decision cannot be made within this timeframe then the hospital will be notified and may proceed to the next appeals level (Easterling, 2011). To file an appeal at the next level, the denied amount must be more than $140 in dispute and will increase to $150 in 2015 (CMS Appeals Fact Sheet, 2014).
Appeal Level 3 – “Administrative Law Judge (ALJ) hearing.” Hospitals have within 60 days from receipt of QIC reconsideration decision letter or after the QIC allowed timeframe has expired to file a “request for hearing”. The ALJ used to have 90 days to conduct hearings and send out an administrative law judge decisions (Easterling, 2011). However, due to recent increases in the number of hearing requests, claims received after April 1, 2013 have been delayed. Now ALJ asks that appellants give at least 22 weeks before resubmitting any requests to ALJ. ALJ will send their decision to the administrative QIC, which manages all the ALJ claim case files. If ALJ decides to overturn the denied claim in full or in part, the Administrative QIC will notify the MAC that it must pay the claim within 30-60 days. If ALJ cannot make a decision then provider will be referred to the Appeals Council (CMS Appeals Fact Sheet, 2014). However, at this level, CMS will recollect the denied amount plus interest (Easterling, 2011). Hospitals may also repay the money within 30 days and then filing an appeal. This strategy will prevent interest from accruing if the claim is denied (ACEP, n.d.).
Appeal Level 4 – Review by “Medicare Appeals Council.” Hospitals must file a request within 60 days of the ALJ ruling or after the ALJ timeframe has expired. The council will usually make a decision within 90 days from the receipt of the provider’s request. However Appeals Council has 180 days to make a decision if a hospital files a request for escalation to issue a decision. If the decision cannot be made the Appeals Council will refer the provider to the Federal District Court. If a decision is made the Appeals Council will forward their decision to the Administrative QIC. If the decision was to overturn a denied claim in whole or in part the Administrative QIC will notify the MAC and the MAC must pay the claim within 30 to 60 days. If the hospital disagrees with the Appeals Council decision or the timeframe has expired hospital may file for judicial review with the U.S. District Court.
Appeal Level 5 – Review in “Federal District Court.” Hospitals have 60 days from the receipt of Medicare Appeals Council decision or the timeframe for the Appeals Council has expired to file an appeal with the Federal District Court. The district court has no timeframe during which a decision must be made (CMS Appeals Fact Sheet, 2014). Any denied overpayments must be paid at this point (Easterling, 2011). The number of claims in the appeals process continues to grow and the average time for the appeals process is 18-28 months (Crump, 2014). According to the 2014 RacTrac Survey hospitals reported that 63% of claims are in the appeals process. The same survey reported that hospitals are appealing 50% of RAC denials and have a success rate of 66% (AHA Survey, 2014).
