The Centers for Medicare & Medicaid Services (CMS) recently instructed Medicare Administrative Contractors (MACs) and Qualified Independent Contractors (QICs) that, for redeterminations and reconsiderations of claims denied following a post-payment review or audit, they should limit their review to the reason(s) the claim or line item at issue was initially denied.

MACs (such as Cahaba) and QICs (such as C2C Solutions) are responsible for handling redetermination and reconsideration requests, respectively, filed by providers and suppliers in relation to Medicare Part A and Part B appeals.  MACs and QICs generally have discretion while conducting appeals to develop new issues and review all aspects of coverage and payment related to a claim or line item.  In some cases, this results in situations where the original denial reason is cured, but an expanded review of additional evidence or issues results in an unfavorable appeal decision for a different reason.  Under this new CMS instruction, MACs and QICs will limit their review to the reason or reasons the claim or line item at issue was initially denied.  Importantly, however, there are several caveats to this new instruction:

  • First, the instruction applies only to redeterminations and reconsiderations of claims denied following a post-payment review or audit (where claims were initially paid by Medicare and subsequently reopened and reviewed by a CMS contractor and revised to deny coverage, change coding, or reduce payment).   The instruction does not apply to a claim or line item denied on a pre-payment basis and, in those cases, MACs and QICs are free to develop new issues and evidence at their discretion and issue unfavorable decisions for reasons other than those specified in the initial determination.
  • Second, if a MAC or QIC conducts an appeal of a claim or line item that was denied on post-payment review because a provider, supplier, or beneficiary failed to submit requested documentation, the contractor will review all applicable coverage and payment requirements for the item or service at issue, including whether the item or service was medically reasonable and necessary.  Accordingly, claims initially denied for insufficient documentation may be denied on appeal if additional documentation is submitted and it does not support medical necessity.
  • Third, the instruction applies only to redetermination and reconsideration requests received by a MAC or QIC on or after August 1, 2015.  It does not apply retroactively, and appellants are not entitled to request a reopening of a previously issued redetermination or reconsideration for the purpose of applying CMS’ new guidance.

While there is hope that this new rule will hopefully enure to the benefit providers and suppliers that appeal post-payment review findings, some experts believe that—as a result of this new guidance—the original post-payment reviewers will now go further than they traditionally have and deny claims and items for multiple reasons, if multiple reasons exist rather than stopping at the first issue that can be used to deny or down code a claim.  Only time will tell.

The attorneys at Chilivis Grubman handle all types of Medicare, Medicaid, and private payor audits and audit appeals.  If we can assist you with these or any other healthcare issues, please contact us at (404) 262-6505 or