According to the General Services Administration (the government's accounting arm) as many as 90 percent of the decisions by Medicare about whether services are medically necessary are made by workers with only a high school education and no medical training or background.
With 400 claims per worker per day — one every 72 seconds — it's no wonder they make so many mistakes. In addition, the dozens of carriers processing Medicare claims have widely different ways of interpreting Health Care Financing Administration policy.
In South Carolina, for example, only the top 25 services are screened for medical necessity and only 1.4 services are denied per 1,000 allowed. However, in Southern California, the carrier screens the top 67 services and denies 23.1 per 1,000 allowed. With this level of inconsistency, it makes good sense to keep going back to Medicare for more when the payment is disappointing.
Medicare appeals are actually pretty easy to process, at least up to a point. Still, there are specific steps in the protocol that have to be followed exactly in order.
Follow the steps
If you skip a step, you may win your case, but you won't get any more money. That's because, as a cost-saving measure, HCFA requires all Medicare carriers to settle claims at the lowest possible administrative level. If you preclude them from doing so by going straight to the top, you forfeit your right to any additional payment.
The decision to appeal a claim up the chain of command will rest in part on the amount of money at stake and the value of the case as a precedent for future, similar cases in your practice. The Medicare appeal process is a little like the IRS tax dispute resolution process: the higher you go in the hierarchy, the more likely you are to get what you want.
It's instructive to push a claim up the food chain at least once. You will learn a lot about your Medicare intermediary and the officials at your regional HCFA office. You will get the names and phone numbers of people you meet along the way. Be nice to them; not many people are. If you are polite, the people you meet will be more likely to remember you and be helpful in the future as you encounter new problems with claims. Here are the appeal protocol steps, in order, with comments about what you will encounter at each one.
File the claim. Wait for a response. If the claim is denied in full for lack of specific information, you will need to resubmit it with the clarifications. If anything on the claim was paid, however, you may direct an inquiry — a request for informal review — to the carrier. If, for example, you have identified a problem that is affecting a large number of your claims, or if you have questions about Medicare policies or procedures, an inquiry is probably the best way to start.
Unlike other levels of appeal, there are no formal rules for submitting and processing an inquiry. It usually takes less than the 30 days (or more) that it requires to resolve your issue at a higher level. Remember, a written inquiry will get you a written response; a phone inquiry won't. Getting it in writing is useful if you want to rely on the finding for future Medicare claims.
The review. This is your first formal notification of appeal or protest of your carrier's inadequate processing of a claim. It should be done in writing — by letter or using HCFA form 1964 (request for review) — and must be filed within six months of the date on the explanation of Medicare benefits (EOMB). There is no dollar limit; any payment may be appealed by the practice provided you accepted assignment of benefit.
State your case briefly. Tell the carrier why you are entitled to more money and exactly how much you want. Include a copy of the original claim, the EOMB, and attachments that might be helpful.
Medicare hearing. If your request for review is unsuccessful, your next step is to request a hearing, sometimes referred to as a Medicare "fair hearing." Some physicians are cynical about the fairness, since the hearing is conducted by a hearing officer employed by the insurance intermediary that originally handled your claim and appeal.
Actually, most hearing officers are trying to do an impartial job and you should expect to be treated well. It's smart to go into the hearing with a positive attitude. You may be wrong, but at least you won't cause them to dislike you from the outset.
Your hearing may be conducted in person in your office or the carrier's office, on the telephone, or "on the record" (an exchange of letters). Your request for a hearing must be filed within six months of the findings of your review.
At this stage, your claim must be for more than $100, but you may group several claims to add to that total. Include copies of all your paperwork relating to the request for review and the carrier's response. Your cover letter (or HCFA form 1065) should state any additional points you wish to make, including why you think the review finding was in error or unresponsive.
Be prepared. The hearing officer is required to resolve disputes within HCFA policy, but will generally favor the carrier unless you prove your case. You will need facts — both about the patient and the Medicare rules and regulations. The physician rendering the service should be giving the testimony, but your resident Medicare expert can go with you to help.
Administrative law judge. If the hearing officer rules against you, or the amount offered in additional payment is unsatisfactory, you can ask for an independent authority to hear the case. An administrative law judge (ALJ) from the Social Security Administration hears these cases.
This is the first level of review where a Medicare employee or contractor does not make the decision. The amount in dispute must be greater than $500 and the request for an ALJ hearing must be filed within 60 days of an adverse ruling at your hearing. Instructions on how to request an ALJ hearing will be included with your hearing ruling.
The ALJ is usually not from the health care industry, so you will be making your points to a layman, in ninth-grade English. This actually works to your advantage in most cases. The carrier is usually represented by a physician who is rarely from your specialty and who may be retired. Prepare a one-page synopsis of the points you want to cover.
Take your CPT and ICD-9 code books as well as the Medicare-fee schedule. Be ready to show how you coded the services and how the carrier paid you. You should also have the patient's chart, but it's best to keep it concealed until you need it.
Medicare Appeals Council. Again, if the dispute is over $500 or more, you have 60 days to file an appeal of the ALJ's ruling to the Appeals Council at the Social Security Administration. Generally, this is the body that oversees the ALJ process. It also has the power to reopen the case and overturn everything you have won along the way.
Federal District Court. If you are not satisfied at the Appeals Council level for claims that total at least $1,000, you may sue the Medicare carrier in Federal District Court. You will need a lawyer.
Frequently, the problem is miscommunication. The claims analysts at the Medicare carrier "just don't get it." Repeated problems with the same kind of claim can often be solved when the doctor writes or calls the carrier's medical director, explaining the problem and requesting a policy review.
So, if your carrier is unresponsive or is misinterpreting HCFA policy, complain to the regional director of HCFA for your state. They are very responsive, and you probably will have the attention of your carrier in the future, too. Your file might just be tagged for VIP treatment. Medicare carriers don't like a lot of complaints about them going to HCFA; those contracts are too juicy to lose.