MAC Misinterprets NCD, Denial Ensues

Loyal readers of RACmonitor will recall that two weeks ago, David Glaser was brutally honest with NGS about their, to say it kindly, poor performance dealing with a provider after an audit and supposed overpayment. It truly sounded like a comedy of errors.

Well, it is my turn to call out a Medicare Administrative Contractor (MAC), and this time it is Palmetto. I was asked about a denial for a pacemaker. The pacemaker placement was not emergent; it was scheduled and performed as outpatient, so it was not a question of admission status. Rather, Palmetto was claiming that the National Coverage Determination (NCD) was not met. The Centers for Medicare & Medicaid Services (CMS) does have NCDs for pacemakers: 20.8.3, which addresses single-chamber and dual-chamber permanent cardiac pacemakers, and 20.8.4, which covers leadless pacemakers (which, by the way, are only covered by Medicare as part of a clinical trial).

For regular pacemakers, the NCD states, “The following indications are covered for implanted permanent single-chamber or dual-chamber cardiac pacemakers:

1. Documented non-reversible symptomatic bradycardia due to sinus node dysfunction; and
2. Documented non-reversible symptomatic bradycardia due to second-degree and/or third-degree atrioventricular block.”

Now, that seems pretty self-explanatory. Two indications numbered one and two. In fact, the NCD lists the 12 conditions for which a pacemaker is not covered, also citing them sequentially.

And keep in mind, this hospital and their medical staff are great. For NCDs with specific criteria, they have developed checklists. If a physician schedules a procedure, as occurred here, they are required to fill out the checklist and document which indication is met. And the physician did just that, circling “yes” to indicate that the patient has “documented non-reversible symptomatic bradycardia due to sinus node dysfunction” and “no” to indicate they did not have “documented non-reversible symptomatic bradycardia due to second-degree and/or third-degree atrioventricular block.” Oh, don’t we wish all of our doctors were so helpful?

So, what happened? As part of a routine Palmetto audit, the medical records were requested to confirm that medical necessity for the procedure was present. Medical records were promptly sent, and surprisingly, the claim was denied for lack of medical necessity. The hospital reviewed the record, then found that the appropriate documentation was present, including the checklist. They were mystified.

But then they read the rationale from Palmetto for the denial. Palmetto denied the pacemaker because they stated that per the NCD, the patient needed to have both sinus node dysfunction and second- or third-degree atrioventricular block.

If you look at the NCD wording, you can see that CMS put the word “and” at the end of the first indication to delineate the two indications. But Palmetto took that “and” way too literally – and totally inappropriately – to mean that both conditions needed to be present. Now, of course, you would think that the first appeal would get things straightened out. Oh no. Palmetto doubled down on the denial, again insisting that both conditions needed to be present.

It goes without saying that the hospital will write another appeal and submit it, but this should not have happened. Appealing denials does not occur magically. It takes time and effort that could have been devoted to beneficial activities.

Now, I am sure that Palmetto will blame CMS for putting the “and” in the NCD, but common sense needs to play some role here. So, as David said, in regard to NGS, if you work for Palmetto, or at a CMS regional office that supervises Palmetto, I hope you can help hospitals and stop such inappropriate denials.