LymphActivist's Site
Dedicated to Lymphedema Patients and the Therapists Who Treat Them
LymphActivist's Site
Dedicated to Lymphedema Patients and the Therapists Who Treat Them
LymphActivist's Site
Dedicated to Lymphedema Patients and the Therapists Who Treat Them
MEDICARE STEALTH LEVEL APPEALS
A recent Medicare appeal case with which I am involved took an interesting turn, illustrating a new and particularly disturbing ploy that CMS is taking to avoid having to reimburse Medicare beneficiaries for reasonable and necessary medical supplies.
The Centers for Medicare & Medicaid Services (CMS) contracts with private insurance companies to perform many functions on behalf of the Medicare program, including processing claims for Medicare payment and carrying out the first level of the Medicare claims appeals process. CMS relies on a network of Medicare Administrative Contractors (MACs) to process Medicare claims and to serve as the primary operational contact between the Medicare Fee-For- Service program and health care providers enrolled in the program.
There are four Durable Medical Equipment MACs (DME MACs) which cover the U.S. and administer durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) claims and payments. The initial determination and the Redetermination (Appeal Level 1) are made by the Medicare Administrative Contractor (MAC) of Jurisdiction.
A Reconsideration (Appeal Level 2) is an independent review of the administrative record (including the initial determination and redetermination) by another CMS contractor, the DME Qualified Independent Contractor (DME QIC).While QICs are, by definition, independent of the MACs, they all are responsible to CMS, an operating division of the U.S. Department of Health and Human Services (HHS).
At Appeal Level 3 the appeal is transferred to the Office of Medicare Hearings and Appeals (OMHA) which reports directly to the HHS Secretary, independent of CMS. OMHA administers the nationwide Administrative Law Judge (ALJ) hearing program for Level 3 Appeals arising from individual claims for Medicare coverage and payment under Medicare Parts A, B, C and D. In approximately 56% of the cases I have been following or of which I have been a part, the ALJ’s decision, after reviewing the case file, was favorable to the Appellant.
In my 15 years of assisting lymphedema patients appeal their garment denials through Level 4, it has always been my impression that the ALJ’s decisions at Level 3 were final and binding on all parties unless one of the parties, usually the Appellant, Provider, Supplier or the Insurer, files an appeal of the decision to the Medicare Appeals Council (Level 4). The Council rules on whether there was an error of law made by the ALJ, and their decision has all of the weight and authority of the Secretary of the Department of Health and Human Services (Secretary).
CMS has been forced to make changes in the appeal process in recent years to reduce the number of appeals reaching Level 3, and to reduce the favorable decision rate by ALJs. UNFAVORABLE Redeterminations peaked at 68.8% in 2015, and have reduced to 52% in FY2018. UNFAVORABLE Reconsiderations by the DME QIC have reduced from approximately 90% in FY2011-2014, and have dropped to 55% in FY2018. These reductions in UNFAVORABLE decisions reduce the percentage of cases that reach the ALJs.
However, FULLY FAVORABLE ALJ decisions have dropped from 53.2% in FY2012 to 15.0% in FY2019. PARTIALLY FAVORABLE decisions have dropped from 6.4% to 1.6% in the same years while DISMISSALS rose from 12.5% to 60.6%. This writer can only speculate how CMS has been so effective in changing the performance of its contractors and of the professional adjudicators in OMHA so drastically.
Methods of further reducing ALJ-overturned denials are becoming more common with the increased activity of the Administrative QIC (AdQIC). One of the functions of this contractor is to “analyze ALJ decisions for possible Department Appeals Board (DAB) review”. Valid bases for Referral of an ALJ decision to the DAB are: 1) an error of law material to the outcome of the claim; 2) broad policy or procedural issue of public interest; 3) decision not supported by the preponderance of evidence, and: 4) abuse of discretion. These cases are referred to the DAB Medicare Appeals Council by CMS for initiating its own review of whether the ALJ made an error of law, or made a decision that would lead to an error of law. This effectively creates another pathway to reduce the number of ALJ reversals of MAC denials, i.e. by auditing FAVORABLE decisions and claiming that the ALJ made an error of law which led to an incorrect decision.
This “stealth level” of appeal has some sinister overtones. In my opinion, after working on over 100 similar appeals of denials of compression garments and bandages for treatment of lymphedema patients, there are a number of negative consequences of referring this case to the DAB Medicare Appeals Council (Council):
I have recently had a case selected by the AdQIC for referral. This case is interesting as it illustrates the perniciousness of the stealth level of appeal. The case involves the purchase of four compression sleeves and four gauntlets in December 2017 by a lymphedema patient with bilateral upper extremity lymphedema. The total amount in dispute is $1564.43.
After an initial denial and redetermination by the DME MAC, and support of the denial by the DME QIC, the case was heard by the ALJ in April 2019. Sixteen months from date of service to ALJ hearing is unusually short, reflecting CMS’s and OMHA’s successful efforts to expedite appeals filed by beneficiaries. Kudos on this effort.
The Code of Federal Regulations 42 C.F.R.§ 405.924 requires the DME MAC to determine “if the items and/or services furnished are covered under title XVIII.” The initial denial and QIC confirmation were made on the basis that these items did not meet the coverage requirements for durable medical equipment (DME) benefits [§1861(s)(5)] in spite of the fact that the beneficiary requested reimbursement on the basis that these items were prosthetic device benefits per [§1861(s)(8)], a completely different benefit category than DME.
The beneficiary sent in 50 pages of explanation and evidence in support of her claim. The DME MAC and QIC submitted no evidence whatsoever that these items did not meet the requirements for prosthetic devices. The ALJ considered the appeal based on the evidence in the case file and made the FULLY FAVORABLE (to the beneficiary appellant) decision “based on the administrative record including the hearing record” per 42 C.F.R. § 405.1000.
The AdQIC referral to the DAB was made on the basis that there was an “error of law material to the outcome of the claim”. The 12 pages of the AdQIC Referral started out with a restatement of the case and the ALJ’s decision (5 pages), a restatement of the relevant laws, statutes and CMS policies (3.5 pages) and discussion and conclusion (3 pages) by the AdQIC attorney. The discussion had four major flaws, in my layman’s opinion: 1) it introduced other appeal decisions on similar cases; 2) the three UNFAVORABLE cases introduced were faulty as they were based on an incorrect interpretation of the coverage criteria for prosthetic devices; 3) its arguments were based largely on disputing illustrative analogies instead of examining whether the evidence in the record supported the claim, and ; 4) ignored scientific and clinical evidence in the record on how the compression sleeves restore the faulty lymph collection and transport in the beneficiary’s arms and hand.
It is unknown whether the Council will take the AdQIC’s request and reopen the case. It is also unknown whether they will consult with medical experts if they do reopen the case so that the evidence in the case record can be understood and used to lead to a decision based on the evidence rather than on inappropriate analogies.