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Nothing is more frustrating to a provider than having a claim denied, preparing a comprehensive appeal, submitting that appeal, and then having the appeal denied – not because the appeal wasn’t compelling or correct, but because the auditor found a second issue and the denial was upheld based on that new issue.

Fortunately, this frustration should be going away very soon. On Aug. 13, the Centers for Medicare & Medicaid Services (CMS) released MLN Matters SE 1521, “Limiting the Scope of Review on Redeterminations and Reconsiderations of Certain Claims.”

When a claim is denied by an auditor – whether it’s a Medicare Administrative Contractor (MAC), Quality Improvement Organization (QIO), Recovery Auditor (RAC), Zone Program Integrity Contractor (ZPIC), Supplemental Medical Review Contractor (SMRC), or Comprehensive Error Rate Testing (CERT) contractor – the appellant’s appeal is reviewed by a MAC as a redetermination. If the appellant is not satisfied with the result of that appeal, it may file a request for a second-level reconsideration by the Qualified Independent Contractor (QIC). An unfavorable QIC decision then can be appealed to a third level of review by an administrative law judge (ALJ), then on to the Medicare Appeals Council and finally to judicial review in U.S. District Court.  

As stated in the MLN Matters article, CMS has issued a technical direction letter (TDL-150407) to the MACs and QICs stating that “for redeterminations and reconsiderations of claims denied following a post-payment review or audit, CMS has instructed MACs and QICs to limit their review to the reason(s) the claim or line item at issue was initially denied” (technical direction letters are considered internal communications and are generally not released to the public).

This limitation only will apply to appeals received on or after Aug. 1, 2015, so appeals that were received by the MAC or QIC prior to that date can be reviewed for any or all reasons. Furthermore, this restriction will not apply to pre-payment audits, for which the MAC and QIC continue to have the discretion to deny for new reasons – nor will it apply to denials for no or insufficient documentation in cases in which the initial denying auditor did not have complete access to all information to review.

CMS also noted that if an appeal is successful and the claim processes but hits a claim edit, such as a frequency limit or Correct Coding Initiative edit that did not trigger during the original claim processing, that would be considered a new denial and providers could start the appeal process anew.

While communication from the denying entity to the MAC performing the redetermination and from the MAC to the QIC performing the reconsideration should happen without any appellant input, CMS has advised providers to include a copy of the audit or results review letter with the appeal to ensure that the MAC or QIC is aware of the initial denial reason and will not address other issues.

About the Author

Ronald Hirsch, MD, FACP, CHCQM is vice president of the Regulations and Education Group at Accretive Physician Advisory Services at Accretive Health. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the American Case Management Association and a Fellow of the American College of Physicians. 

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