LEEDer Group Inc.
8508 North West 66th St.
Miami, Florida 33166 USA

Phone: 305.436.5030
Fax: 305.436.0086
E-mail Address: info {at] LEEDerGroup [dot] com

2015-08 CMS Limits Scope of Review

CMS Limits Scope of Review on Redetermination and Reconsideration

by Jeffrey S. Baird, JD, and Joshua I. Skora, JD • August 24, 2015

AMARILLO, TX – One of the most difficult and frustrating aspects of being a DME supplier is dealing with Medicare post-payment reviews, audits and overpayment determinations. The experience of a large audit can be daunting and expensive.

Typically, the audit process begins with an ominous letter from a Zone Program Integrity Contractor (ZPIC), Recovery Auditor Contractor (RAC), Comprehensive Error Rate Testing (CERT) contractor or DME Medicare Administrator Contractor (MAC) requesting additional documentation for a set of claims to confirm that the claims were properly payable. The supplier is not told what the issues are, so the guessing game begins. Once the supplier provides the requested documentation, the waiting game begins. Suppliers may receive a formal overpayment determination within 30-60 days, or the process could linger for over a year.

The overpayment determination will outline the reasons why claims were denied. The supplier then has 120 days to appeal the overpayment determination by requesting a redetermination. The redetermination review is conducted by an employee of the ZPIC, RAC or DME MAC who did not partake in the initial determination. If the redetermination confirms the initial findings, the supplier may request reconsideration, within 180 days from the redetermination decision, by a Qualified Independent Contractor (QIC). If the QIC confirms the determination, a supplier may appeal the decision to an Administrative Law Judge, then to the Departmental Appeals Board, and finally to federal district court.

It has been CMS’s policy, up until now, that redetermination and reconsideration appeals were reviewed de novo, which means that the appeal was a new and independent review of a claim regardless of the reasoning outlined in the initial overpayment determination. For example, if an initial overpayment determination stated that claims were improper because of reasons A, B and C, upon redetermination or reconsideration the reviewer, for the first time, could argue that the claims were improper because of reasons D and E. This presented significant “moving target? problems for suppliers, because their claims would be deemed improper for new reasons and suppliers had limited opportunity to fully articulate responses.

Fortunately, in a new Medicare Learning Network (MLN) Matters Special Edition Article, CMS has instructed its contractors and QICs that they must now limit the scope of their review of post-payment audits to the reasons articulated in the initial overpayment determination. The MLN Matters reasoned that because MACs and QICs have discretion while conducting appeals to develop new issues and review all aspects of coverage and payment related to a claim or line item, unfavorable appeal decisions could occur even if the original denial reasons were cured.

But, CMS made it clear that if an initial denial was based on insufficient documentation, a subsequent appeal may still deny the claim if the additional documentation provided does not support medical necessity. And, “[i]f an appeal involves a claim or line item denied on a pre-payment basis, MACs and QICs may continue to develop new issues and evidence at the their discretion and may issue unfavorable decisions for reasons other than those specified in the initial determination.? Finally, CMS’s instructions to limit the scope of review applies to redetermination and reconsideration requests received by a MAC or QIC on or after Aug 1, 2015. It will not be applied retroactive.

This is an important development in how MACs and QICs are able to review previously denied claims. If, moving forward, suppliers are able to provide documentation and medical records that cure the initial reasons for denial, the inquiry should be over and suppliers should be paid or overpayment determinations reversed.

Above article stated that the “redetermination review is conducted by an employee of the ZPIC, RAC or DME MAC who did not partake in the initial determination.? While a redetermination is conducted by an employee who was not involved in the original determination, redeterminations are handled by a fiscal intermediary (FI), carrier, or Medicare Administrative Contractor (MAC). In the case of durable medical equipment, the DME MAC is responsible for conducting redetermination appeals. ZPICs and RACs do not conduct redetermination appeals.