Appealing a Medicare Denial

If you have received a claim denial from your Medicare contractor you do have the right to submit an appeal.  If you do not take assignment on the claim, your appeal rights can be limited.

  See section at the bottom on Clerical Reopening when an appeal is not indicated.

First level of appeal: Redetermination

A redetermination is an examination of a claim by fiscal intermediary (FI), carrier, or MAC personnel who are different from the personnel who made the initial claim determination. The appellant (the individual filing the appeal) has 120 days from the date of receipt of the initial claim determination to file an appeal. A redetermination must be requested in writing. A minimum monetary threshold is not required to request a redetermination
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Second level of appeal: Reconsideration 

A party to the redetermination may request a reconsideration if dissatisfied with the redetermination decision. A qualified independent contractor (QIC) will conduct the reconsideration. The QIC reconsideration process allows for an independent review of medical necessity issues by a panel of physicians or other health care professionals. A minimum monetary threshold is not required to request a reconsideration.

Third level of appeal: Hearing by an administrative law judge (ALJ)
If at least $140 remains in controversy following the qualified independent contractor's (QIC's) decision, a party to the reconsideration may request an administrative law judge (ALJ) hearing within 60 days of receipt of the reconsideration decision. Appellants must send notice of the ALJ hearing request to all parties to the QIC for reconsideration. ALJ hearings are conducted by the Office of Medicare Hearings and Appeals (OMHA).

By clicking here you will find information on the OMHA website.

Fourth level of appeal: Review by the Medicare Appeals Council
If a party to an ALJ hearing is dissatisfied with the ALJ's decision, the party may request a review by the Medicare Appeals Council. There are no requirements regarding the amount of money in controversy. The request for Medicare Appeals Council review must be submitted in writing within 60 days of receipt of the ALJ's decision, and must specify the issues and findings that are being contested.

By clicking here you will find information on the Medicare Operations Division/Medicare Appeals Council.

Fifth level of appeal: Judicial review
If $1,400 or more is still in controversy following the Medicare Appeals Council's decision, a party may request judicial review before a Federal District Court judge. The appellant must request a Federal District Court hearing within 60 days of receipt of the Medicare Appeals Council's decision.
• The Medicare Appeals Council's decision will contain information about the procedures for requesting judicial review.

Additional resources

Within the CMS websites you will find information related to the five levels in the Part A and Part B appeals process.

• CMS Appeals Web resources

• CMS Appeals process flowchart

CMS resource materials available for download

• MLN - The Medicare Appeals Process Brochure

CMS Internet-only manuals: Publication 100-04

• Chapter 29– Appeals of Claims Decisions

• Chapter 34– Reopening and Revision of Claim Determinations and Decisions

Minor errors or omissions on some Part B claims can be corrected for reprocessing using the clerical reopening process.

There are two ways to initiate this process:

• Telephone reopening requests via the interactive voice response (IVR) allows providers/customers to request telephone re-openings on certain claims.  For the IVR reopening request help sheet, click here

• For reopening requests in writing, use the clerical reopening .

Common clerical errors consist of:

• Mathematical or computational mistakes

• Transposed procedure or diagnostic codes

• Inaccurate data entry

• Misapplication of a fee schedule

• Computer errors

• Denial of claims as duplicates which party believes incorrectly identified as duplicate

• Incorrect data items such as provider number, modifier, date of service

How Does the American Taxpayer Relief Act Affect You?

MEDICARE PHYSICIAN PAYMENT UPDATE

The Centers for Medicare and Medicaid Services (CMS) will continue to pay physicians at 2012 levels through 2013. Physician payments were scheduled to be cut 26.5 percent.

2013 is the second consecutive year with no inflation increase in physician payments. Medical claims reimbursement for some services will be the same as they were in 2011.

Revisions were made to the reporting requirements under the Physician Quality Reporting System (PQRS) for payment adjustments beginning in 2015 for eligible professionals who report data on quality measures. Under a new provision, a professional will be deemed to meet data submission requirements for the Program, if he or she “satisfactorily participates” in a qualified clinical data registry. Clarification is required by The Secretary of the Department of Health and Human Services on how reporting requirements are to be met and to define a “qualified clinical data registry”.

MULTIPLE SERVICE PAYMENT POLICIES FOR THERAPY SERVICES

CMS has a number of policies that limit payment when multiple procedures are furnished on the same day. Under the American Taxpayer Relief Act, the multiple procedure payment reduction has been increased to 50 percent for therapy services furnished on or after April 1, 2013.

OVER PAYMENTS

The time frame in which CMS may recoup over payments made for items and services was lengthened from 3 years to 5. Under this provision, providers are deemed to be “without fault” for any over payments “subsequent to the fifth year following the year in which notice was sent” as to the amount paid.

EXTENSION OF TWO MEDICAL ASSISTANCE PROGRAMS

Two programs specifically for low-income Medicaid beneficiaries have also been extended through 2013. State Medicaid plans will provide assistance to those with dual eligibility in the form of premium support for Part B services for qualifying Medicare beneficiaries that have incomes between 120% and 135% of the poverty level. The Transitional Medical Assistance Program provides low-income families with the ability to continue Medicaid coverage on a temporary basis once they become employed and collect earnings that otherwise disqualify them from eligibility. There is an increase in the amount allocated to the program in 2013, with $485 million available for the period from January 1, 2013, to September 30, 2013, and $300 million available for the period from October 1, 2013, to December 31, 2013.

LOW-VOLUME HOSPITAL ADJUSTMENT

The Medicare Program provides a percentage increase for each payment to certain qualifying low- volume hospitals. Due to the substantially broadened eligibility criteria, many more hospitals qualify for these additional payments.

MEDICARE-DEPENDENT HOSPITAL PROGRAM

Medicare-Dependent Hospitals (MDHs) are typically small rural hospitals with a substantial Medicare patient population that rely significantly on Medicare payments. They will continue to receive the increased Medicare payments through October 1, 2013. CMS has indicated that it will issue instructions to hospitals that forfeited or lost this status effective October 1, 2012, on how to regain MDH status.

PHYSICIAN WORK GEOGRAPHIC ADJUSTMENT

The Geographic Practice Cost Index (GPCI) floor of “1.0” for the work component of physician payment rates will continue through 2013. Medicare adjusts payments to physicians through the GPCI to reflect the varying cost of delivering physician services in different locations. These GPCIs are applied to the three calculation components of a procedure’s relative value unit: work, practice expense, and malpractice. The “floor” of 1.0 for the work component of the formula means that physician payments would not be reduced in a geographic area just because the relative cost of physician work fell below the national average.

OUTPATIENT THERAPY SERVICES

There is an annual per-Medicare-beneficiary cap of $1,500 for outpatient therapy services (physical and speech therapy combined, and separately to occupational therapy. In 2006, an exceptions process whereby Medicare beneficiaries can request and be granted an exception to the caps, and receive an unlimited amount of therapy services to the extent deemed medically necessary by Medicare was established. The exceptions process, which effectively suspends the cap has been extended through December 31, 2013.

Additional protection to beneficiaries affected by this cap has been added to protect Medicare beneficiaries from liability for items and services furnished to them if the Medicare beneficiary and the provider did not know, and could not have been reasonably expected to know, that the item or service would be non-covered.

Medical Office Workflow Step 6: Accounts Receivables

If you followed the advice given in the previous articles, you have properly identified the patient benefits, obtained the necessary authorizations, and carefully produced clean claims.  If you missed the blogs discussing these important steps, follow these links:  Step 2, Step 3, Step 4.

Each one of these steps is an integral part to keeping a “young” Accounts Receivables (ARs) balance.  They ensure the quickest turn-around time for your claim payments which keeps your cash flow smooth and predictable.

You may wonder why I use the reference “young” when speaking of ARs.  One of the most common ways to evaluate your practice cash flow situation is by analyzing the open balances by their aging.  The aging is most often broken down into “buckets” of 30 day increments: 0-30 days, 31-60 days, 61-90 days, 91-120 days, 121-150 days and 151 days and over.  As the aging increases, the balances should decrease with the highest amounts, hopefully, always in the 0-60 days’ categories.

An optimum strategy for keeping your ARs the most current involves two main tasks: 

                      Reviewing all rejected/denied claims as soon as received.  In the case of electronic transactions, claims that contain bad data are pre-screened at the claims clearinghouse and are often seen back in your practice management software within 24 hours for quick correction and resubmittal.  Electronic claims that pass on to the payer can be processed within just a few days by receiving an ERA right into your medical billing system.

Iridium Suite Practice Management software optimizes the advantages of electronic claims responses and remittances with unique warning system.  The user will see visual alerts when claims have been rejected or an ERA contains a denial.  These tools assist office staff to be continually aware of situations that negatively affect your Accounts Receivables. 

                   Regular monitoring of all claims dated over 61 days for activity by office staff or payer.  Whether you have just had no payer response or you are waiting on a reply to some type of re-submittal, you must evaluate your aging Accounts Receivables for proper activity.  For instance, a claim sent with records for appeal should prompt a call to the payer at least every 4 to 6 weeks for a status update.

Iridium Suite Practice Management software is designed for paperless AR follow up with an entire module in the software dedicated to sorting and prioritizing your ARs the way you like to see them.  Specific payers or issues can be divided up and assigned to individual office staff allowing for tracking of progress and positive resolutions. 

The best plan for an efficient and productive medical office is to have a workflow process in place.  Hopefully you can implement the recommendations from this 6 part series to help you and your staff to create an office environment where each person can fulfill their duties with ease and confidence.

Medical Office Workflow Step 5: Payment Posting

Once your charges have made it out the door, you should expect to see payer responses in as little as 5 days for electronic claims transactions and 3 weeks for paper claims.  You may receive these responses electronically, which is commonly referred to as an Electronic Remittance Advice (ERA) or on paper.  The appropriate payments can also be received electronically via Electronic Funds Transfer (EFT) or by paper check.

Iridium Suite Practice Management software imports the ERA and often can adjudicate the payments automatically in the indicated patient's account.

  Information regarding denials is attached to the designated services with complete details allowing medical office staff to research and choose the best action in order to resolve the denial with the payer.

Click here to get the white paper “Understanding Explanation of Benefits Statements.”

Whether or not your medical billing software has the ability to automatically post your ERA’s, you will need to have a full understanding of the terminology used on any format of payer remittance.  The “Amount Paid” column is of course the most self-explanatory; it is the details that accompany the non-payment amounts that are much trickier to navigate.

  The explanations for non-payment amounts are indicated by using a combination of the Claim Adjustment Group Code (two alpha characters)and a Claim Adjustment Reason Code that can be numeric or alpha-numeric.  There are 5 Claim Adjustment Group Codes:

CO          Contractual Obligation – most commonly refers to un-allowed amounts based   on the payer’s contractual fee schedule amount.

CR          Corrections and Reversal – used to indicated a reprocessing of a claim that was overturned on appeal or denying a previously approved service

OA          Other Adjustment – default code used when others may not be applicable

PI           Payer Initiated Reductions – may reflect a penalty imposed by the payer

PR          Patient Responsibility - typically applies to amounts for deductible, copayments and coinsurance per patient policy

For more details on Claim Adjustment Group Codes follow this link: http://www.iridiumsuite.com/mbs-blog/what-are-eob-claim-adjustment-group-codes

Claim Adjustment Reason Codesrange from 1 to W2 and help to define the adjustment, by communicating why a claim or service line was paid differently than it was billed.

 For a complete list of claim adjustment reason codes, visit Washington Publishing Company's website by clicking here.

Now that you understand the terminology, you can begin to post your remittance:

As you match on the service date and procedure, you will enter the appropriate indicated amounts for payments, contractual write off amounts, and patient responsibility.  The patient responsibilities, such as co-pays, co-insurance and deductibles, are allocated to the next responsible financial party; this may be the patient or another insurance company.

 Once you have completed entering the data for the service line, the remaining balance should be $0 for the payer you are processing.  Any allowed amount, but not paid, would now be showing as the responsibility of another party, either patient or an additional payer.

Identify a DENIAL by a $0 allowed amount.  You should never assume without verification that a $0 allowed amount has been processed correctly by the payer.  Carefully review the adjustment code against payer payment policies, NCCI edits, your billing records for the account and the patient’s medical record.  Only when you are convinced the service has been denied appropriately should you accept this write-off amount.

Medical Office Workflow Step 4: Collecting Your Charges and Filing Claims

By properly registering your patient and verifying their benefits, you have laid the groundwork for correct claims reimbursement.  See these previous articles for more information:  New Patient Checklist and Proper Insurance Verification.

You now need to establish a reliable process for collecting charge date and filing claims.  One of the best ways to accomplish this is to utilize your Practice Schedule.  You will want to verify you have received a charge slip or “superbill” for each patient that has been marked as seen on your schedule. 

Integrating multiple systems can enhance your work environment and improve efficiency. A medical billing software that is able to directly import charge data from your EHR will eliminate the need for manual charge entry from “superbills”.

Iridium Suite Practice Management software now comes with the Connectivity Clearinghouse enabling connections to multiple EHR systems.

To prevent denials and receive proper reimbursement:

·         Be aware of any services/procedures you provide that may conflict with others or be bundled together according to NCCI (National Correct Coding Initiative) edits.

Iridium Suite features a built-in claim scrubber that has many capabilities, so a biller can be confident that coding violations will be caught before the claim is generated. 

This article contains additional information on preventing common claim denials: http://www.iridiumsuite.com/mbs-blog/prevent-these-high-volume-claim-denials

·         Stay informed of your commercial payers’ Medical Policies and government payers Coverage Guidelines. 

 These two articles can provide more detailed guidelines on payer’s policies:  Reviewing Commercial Carriers Medical Policies/Clinical Guidelines and Understanding Medicare Fiscal Intermediaries.

Now that you have entered your “clean claims”, it is time to get them off to the payer.  Filing your claims can be done:

via paper on the standard HCFA-1500 claim form,

 or sent electronically. 

Sending claims electronically utilizes Electronic data interchange (EDI). EDIis the structured transmission of data between organizations by electronic means.  Claims are batched in the medical billing software, and then transmitted in an electronic format directly to the payer or to a clearinghouse.

Iridium Suite utilizes EDI to improve your claims processing in the following ways:

·         Ability to track the Electronic Claims from receipt by the clearinghouse to the acknowledgement and acceptance by the payer.

·         Electronic claims are pre-screened for certain errors with notices being sent back to the medical practice within days for quick correction and resubmittal.

·         Due to their formatting, electronic claims are much more quickly processed by the payer, reducing the wait for reimbursement in some cases from weeks to days.

Medical Office Workflow Step 3: Obtaining Procedure Authorization

During your insurance verification process, you became aware that one or more of the services you will be either providing or ordering for your patient require an authorization.

For a guide on Proper Insurance Verification follow this link: http://www.iridiumsuite.com/mbs-blog/medical-office-workflow-step-2-proper-insurance-verification.

If you have no current method in place for obtaining authorizations, use the following suggestions to create your office process.

           1 Gather all pertinent patient information: name, date of birth, insurance policy number and contact information for the authorizing entity.

 The authorizing entity can be the insurance company, but more and more frequently payers are contracting out to third party organizations to perform this function.

 2 Obtain the following data:  accurate diagnosis including the ICD9 or 10 code, copies of related medical records, the history and physical report from your physician, and the procedure(s) ordered with the appropriate CPT code(s).

Because you will need accurate medical data on your patient and in some cases actual office notes to provide to the authorizing entity, your hands may be tied in regards to the speed in which the authorization can be obtained.  For this reason, it is always helpful when possible to schedule the services enough into the future as to allow for processing time.

3  Now that you have the basics you are ready to begin the authorization process.  Follow the guidelines indicated by the authorizing entity to complete your authorization request.  This can vary from phoned in requests, to online or faxed submissions.  Make sure to complete any forms as accurately and thoroughly as possible. 

It is helpful to compile a file on authorization processes for each authorizing entity you encounter.  This allows you to have the information readily available again and again.

  

4 Now you wait.  With online submissions, you may have your authorization within seconds or minutes.  Other authorizing entities may take 24-48 business hours as their standard turn around.  You may even on occasion experience a week or more time between the request and the response. 

If you fail to get a response in the time specified by the entity, do not wait idly by.  Call or email as follow up.  You may discover the request was incomplete so you are able to provide the additional needed information.   Unfortunately, sometimes it is just floundering around on someone’s desk and you have to make sure it is brought to their attention.

5 Once you have received your authorization make sure to pass it on to the appropriate party:  the billing staff in your office for an in office procedure, the hospital or outpatient facility, or the diagnostic center. 

You are .  Hopefully we have taken some of the mystery

 out of obtaining authorizations for your patients.

Medical Office Workflow Step 2: Proper Insurance Verification

For successful claims processing and payment, it all starts with the proper verification of insurance coverage and benefits.

Follow the guide below to ensure you are gathering all the necessary information to create a complete and accurate patient benefit profile.

Basic information needed before contacting the insurance company:

1.       First and last name of patient and the subscriber (if other than the patient)

2.       Patient’s date of birth

3.       Policy number as shown on the insurance card

(The insurance card is one piece of essential information your patient should bring on their first visit.  Please see this New Patient Checklist other important documents, etc.)

4.       Diagnosis or chief complaint

5.       CPT codes for anticipated procedures

Ask these questions to build your patient benefit profile:

1.       What are the effective dates of the current policy?

2.       Are they any pre-existing conditions limitations?

3.       What are the benefits for the anticipated service?

a.       Does a deductible apply (see b) or only a copayment (see d)?

b.      If there is a deductible, how much is the deductible and how much is met?

c.       After the deductible, what is the co-insurance amount?

d.      How much is the copayment?

e.      What is the annual out of pocket maximum and how much is met?

f.        Do the deductible and copayments apply toward meeting the out of pocket maximum?

4.       Does this policy require any type of authorization of the anticipated service(s)?    If yes, make sure to obtain the proper contact information for that internal department or outside agency.

If you are unaware of the entities process for obtaining authorizations, immediately contact them by phone or review available information on their website.  This is a huge time saver to have this information on hand before you may actually need it. 

5.       Is there an annual, lifetime or per illness/diagnosis maximum benefit?  If so, how much has been met?

If some of the above terms seem confusing, refer to the table below for helpful explanations.

Q:	A:
Pre-existing Condition	Most often occurs with a lapse of insurance coverage.  The new insurer can refuse to cover a condition that was diagnosed before the effective date of the policy.
Deductible	Amount the subscriber is responsible to pay before insurance will pay their portion.
Copayment	A flat rate assigned to specific procedures that the subscriber is required to pay.  Most commonly to office visits and outpatient diagnostic procedures.
Coinsurance	The percentage of the charge that is the subscriber’s responsibility.  Refers to benefits like”80/20”, the insurance pays 80%, the patient pays 20%.
Out of pocket Maximum	This is the total patient’s out of pocket financial responsibility designated by the payer.  Once the subscriber has met this amount, services then become covered at 100% by the payer.
Benefit Maximum	This is the monetary payment limit set on the subscriber’s policy.  Once this maximum is reached the payer has no more financial liability and the subscriber must pay for the rendered services.

Iridium SuitePractice Management software from Medical Business Systems has an integrated insurance Real Time Eligibility function that can do most of this work for you.  See how Iridium Suite can help you “work smarter not harder”.