Understanding the Medicare Appeal Process: Getting Your Claims Paid

Nothing is more frustrating than submitting a claim for payment and having the claim denied. Whether the reason is as simple as an incorrect beneficiary name, inappropriate bundling or a question of medical necessity, this initial determination of a claim from the contractor is the bane of existence for many urologists' offices. It takes time and effort of the billing staff to determine if the determination was appropriate. In order to get these denied claims paid, there are certain appeals processes for both Medicare and commercial insurers which are different and must be followed.

• 2006 Medicare Appeal Process Changes
• Who Can Request an Appeal?
• Reopening for Minor Errors and/or Omissions
• Initial Determination
• Requests for Appeal Must Be in Writing
• Medicare's New Redetermination Notice
• Five-tiered Appeals Process
• Is An Appeal Worth It?

2006 Medicare Appeal Process Changes

Section 521 of the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), enacted by Congress, provides for significant changes to the Medicare claims appeal procedures implemented by the Centers for Medicare & Medicaid Services (CMS). These statutory appeals provisions dramatically reduced the time frames for deciding fee-for-service medical claims appeals to 300 days from more than 1,000 days. In addition, CMS substantially overhauled the process to include requirements for appeal decision notices, the required time frame of when providers or suppliers can present any evidence to support the appeal and establishes a process for correcting minor errors and omissions on Medicare claims. These changes were effective May 1, 2005 for fiscal intermediaries (Part A) and January 1, 2006 for contractors (Part B).

NOTE: Medicare Contracting Reform (MCR) Update—In Section 911 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Congress mandated that the Secretary of the Department of Health and Human Services replace the current contracting authority under Title XVIII of the Social Security Act with the new Medicare Administrative Contractor (MAC) authority. This mandate is referred to as Medicare Contracting Reform. Medicare Contracting Reform is intended to improve Medicare's administrative services to beneficiaries and health care providers. All Medicare work performed by Fiscal Intermediaries and Contractors will be replaced by the new A/B MACs by 2011. Providers may access the most current MCR information to determine the impact of these changes and view the list of current MAC's for each jurisdiction.

Who Can Request an Appeal?

Several entities have a "right of appeal" under the insurance process. These include:

• beneficiary (A beneficiary may transfer their right of appeal to a physician by using form, CMS 20031).
• institutional provider
• participating provider or supplier of medical services
• non-participating provider or supplier of medical services

Reopening for Minor Errors and/or Omissions

CMS has created a new process to handle claims that are rejected due to minor "mistakes." If a claim is rejected because of minor errors or omissions, requests for adjustments resulting from clerical errors must be handled as "reopenings." A redetermination is not required for the corrections of these typographical or mathematical errors. The claim should not be appealed but must be corrected through the contractor's reopening process. The corrected information can be relayed by either telephone or in writing to the contractor. Each contractor, however, may implement their own policy on the reopening process. The reopening may be requested by either the office or the contractor and may be done up to one year from the time the claim was submitted. In situations where a provider, supplier or beneficiary requests an appeal and the issue involves a minor error or omission, irrespective of the request for an appeal, contractors shall treat the request as a request for reopening. For more information on the reopening process, view the CMS document [pdf].

Initial Determination

Once an initial determination has been made unfavorably due to medical necessity or inappropriate bundling or reductions in payment, a request for an appeal may be made. An appellant is any entity that begins the appeals process. It is important to check the claim for validity of the denial and determine that it is appropriate to request an appeal. Make sure all supporting information is collected before starting the process.

Requests for Appeals Must be in Writing

As of January 1, 2006, all requests for claim appeals must be in writing. The request should go to the contractor with complete information: patient name, Medicare insurance number, details about the services to be appealed, name and signature of the provider. In order to assist appellants with this process and to expedite the appeal process, Medicare has developed a Medicare Redetermination Request Form (CMS 20027) for first-level appeals or redeterminations. If this form is completed, there should be adequate information to begin the appeals process. Click here to access a sample Medicare Redetermination Request Form from the CMS web site. Each level of appeal must be completed for each claim in issue prior to proceeding to the next level of appeal.

Medicare's New Redetermination Notice

Under the Medicare Modernization Act of 2003 (MMA), Medicare requires contractors to implement a new Medicare Redetermination Notice (MRN) that is clear and understandable to the beneficiary or provider. The MRN will include a summary statement about the appeal decision, summary of the facts, decision section, explanation of the decision, who is responsible for payment, a section explaining what policy was used to make the decision and identify documentation required to appeal to the next level, an additional relevant information section and information on the next level appeal rights and where to file for the next level. Each contractor can develop their own MRN but it must include this information. This letter must be sent to anyone who appeals a Medicare claim, whether the appellant is a beneficiary or a medical provider.

View more information about the new appeals process

Five-tiered Appeals Process

Once the initial determination has been made as unfavorable, there are five levels for which an appeal can be made. To start the appeals process, a request for redetermination must be filed with the contractor.

1. Redetermination. The CMS contractor will issue a newly designed Redetermination notice giving information on why the claim was denied. There is no minimum amount in controversy (AIC) or monetary threshold. The appellant has 120 days from the date of the initial determination to file a request for redetermination. The contractor has 60 days to make a decision on the request. This is the only level of appeal performed at the contractor level.
2. Reconsideration.
   • Medicare created a new level of appeal performed by Qualified Independent Contractors (QIC). The QIC conducts the reconsideration of claim denials made by fiscal intermediaries, contractors and quality improvement organizations. QIC review panels were created using "physicians or other appropriate health care professionals" to reconsider all claims involving medical necessity issues. The reconsideration level of review is a paper review; CMS states clearly in the preamble to the final regulations that QICs will not be conducting hearings.
   • There is no minimum AIC required for this level. The appellant has 180 days to file for reconsideration. The QIC's decision on the reconsideration must be completed within 60 days. There is a requirement for providers and suppliers to present any evidence for an appeal no later than the QIC reconsideration level, unless there is good cause that prevented the timely introduction of the evidence. The QIC will send the appellant or their representative a Notice of Reconsideration explaining how they made their decision and how to file a subsequent appeal to the next level if needed. To request a reconsideration from a QIC, use the CMS 20033, Request for Reconsideration form [pdf].
3. Administrative law judge (ALJ). There is a minimum of $130 AIC in this level. The appellant has 60 days to submit a request for review by an ALJ. Appellants must also send notice of the ALJ hearing request to all parties to the AIC reconsideration and verify on the hearing request form. Obtain a copy [pdf] of the Request for Review of Administrative Law Judge Decision (ALJ) Medicare Decision/Dismissal, DAB 101. ALJ hearings are held by video-teleconference or by telephone. If there is good cause, an in-person hearing may be requesting and will be approved on a case by case basis. The ALJ has 90 days to make a decision. This may be extended based on a variety of reasons. If the ALJ does not issue a decision within the designated timeframe, the case may be escalated to the Appeals Council level by request.
4. Appeals Council Review. There is no AIC at this level. The appellant has 60 days to file and the MAC has 90 days to make a ruling on the claim. Again, this request must be done in writing and must specify the issues and findings that are being contested. The MAC provides the final administrative review of claims for entitlement to Medicare and individual claims for Medicare coverage and payment filed by beneficiaries or health care providers and suppliers.
5. U.S. District Court. There is an AIC of $1,300 or more at this level. The complaint appealing a Medicare denial must be filed in federal district court within 60 days of receipt of the MAC decision. It must be filed in the district in which the beneficiary/provider resides by an attorney.

View a chart detailing the five levels of Medicare appeals [pdf].

Five Levels of Appeal for Medicare

Appeal: Is It Worth It?

When appealing a claim, it is important to consider how long it would take a staff person to file the appeal and how much the claim is worth. If it is determined that the claim is worth more than the resources it takes to file the appeal, then proceed with the appeal. It is important to research the original claim to make sure the contractor's denial is appropriate. Make sure all the information was correct and that the medical necessity is appropriate for the service(s) billed. Make sure to check edit packages to see whether multiple services are allowed to be billed separately. If there seem to be a number of similar claims which need to be appealed, it might be beneficial to design a template to fill in claim specific information to reduce the time it takes to file the claim. Contact the contractor to see if it is possible to submit multiple appeals with one request.

Below is additional information to assist you in the appeal of your denied claims. In all cases, it is important that you include the claim number, the patients name and ID as well as the date of service on each page of submitted documentation.

For concurrent care denials: Submit the narrative documentation to support that the physician is a different specialty/subspecialty and treating a different body system. You will also need medical documentation, which supports the need for the services (e.g. office records and progress notes).

For overutilization denials: Submit medical documentation that clearly shows why the patient required more than the standard number of services during the specified time period.

For services not medically necessary based on a diagnosis code: Submit specific ICD-9 diagnosis codes or narrative documentation outlining why the services were medically necessary.

For routine screening denials: Submit ICD-9 codes or narrative showing the sign, symptom, complaint or diagnosis, which warranted the service.

For surgery within the postoperative period of another surgery: Submit corrected billing which denotes either modifier -78, Return to the Operating Room for a Related Procedure During the Postoperative Period, or modifier -79, Unrelated Procedure or Service by the Same Physician During the Postoperative Period.

For a visit on the same day or within a postoperative period of surgery: If the visit was performed on the same day as the surgical procedure and it was a significant, separately identifiable service from the surgery, submit a review request with modifier -25, Significant, Separately Identifiable E&M Service by the Same Physician on the Same Day of the Procedure or Other Service. If the visit was during the postoperative period and was unrelated to that procedure, the appeal should be filed with modifier -24, Unrelated E&M Service by the Same Physician During a Postoperative Period, and should include narrative documentation to support the need for the visit. A separately identifiable ICD-9 diagnosis code submitted on the Medicare claim would suffice as documentation.