CMS places some limits on review of Medicare claim denials

If you’ve ever appealed a Medicare claim denial only to see it struck down for new reasons that the reviewers found in the course of their review, help may be coming.

The Centers for Medicare & Medicaid Services (CMS) recently told its Medicare Administrative Contractors (MACs) and Qualified Independent Contractors (QICs) to change how they review certain claim denials. Specifically, CMS says they should limit their review of redeterminations and reconsiderations of claims denied following a complex prepayment review, a complex post-payment review, or an automated post-payment review to the reason or reasons the claim or line item was denied in the first place. 

CMS acknowledged that MACs and QICs generally have discretion while conducting appeals to develop new issues and review all aspects of coverage and payment related to the claim or line item. As a result, while the original reason for the denial may be resolved, this expanded review may result in a denial of the appeal for new reasons. The revised instructions prohibit the contractors from doing that in certain situations, which is good news for physicians and others who initiate such appeals.

However, MACs and QICs will still have the discretion to develop new issues and evidence for claims denied as a result of automated pre-payment review. MACs will also continue to follow existing procedures for adjusting claims after successful appeals, meaning CMS will process the adjustments and may suspend them because of system edits. Claim adjustments that remain unpaid because of additional system-imposed limitations (e.g., frequency limits or Correct Coding Initiative edits) may result in new denials with full appeal rights.

In addition, if a MAC or QIC conducts an appeal of a claim or line item that was denied on pre- or post-payment review because of insufficient documentation, the contractor will review all applicable coverage and payment requirements for the item or service at issue, which means the claim could subsequently be denied for lacking medical necessity. If you receive requests for additional documentation, please be careful to respond quickly and completely to prevent the possibility of expanded review of the whole claim.

Finally, CMS is applying the new guidance only to appeals received by a MAC or QIC on April 18 or later. Prior denials based on expanded evidence will not be reopened.

As noted, the CMS guidance provides some good news to physicians and other providers of Medicare services. But CMS has placed a number of limits on this guidance, and you will need to be aware of the phase and type of review (e.g., pre- or post-payment, automated or complex) to which a claim is subject and consider the possibility of subsequent system edits and denials when determining whether to appeal.  

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians