Knowledge Base Article

This week hails the first week of official summer and it is hot – very hot here in the Deep South. Thank goodness for air conditioners! When I was a child I often visited my grandparents during the summer and we would sit outside because they did not have central air. It was not uncommon for “good news bees” to buzz around us (officially known as yellow jacket hover fly). My grandmother said they meant you were going to hear some good news. I thought it was good news enough that these flying insects didn’t bite or sting like so many others. To celebrate the arrival of summer let me share some “good news” from Medicare.   It is not often that Medicare publications and updates are considered good news by providers. And even rarer is when good news gets even better.

In September 2015, I wrote an article about MLN Matters Article SE1521 that limits the scope of review on redeterminations and reconsiderations of certain claims. In the MLN Matters Article, CMS instructed Medicare Administrative Contractors (MACs) and Qualified Independent Contractors (QICs) to limit their review to the reason(s) the claim or line item at issue was initially denied. They should not issue unfavorable decisions for reasons other than those specified in the initial determination. As a reminder, redeterminations are the first level of appeal and are submitted to the MAC. If the MAC upholds their original denial during a redetermination, the provider may pursue a second level of appeal, a reconsideration, with the QIC.

Limiting the scope of appeal reviews was good news for hospitals and other providers, but a revised version of SE1521 offers even better news. In the original article, the limited scope of review only applied to post-payment determinations. The revised article (revised May 9, 2016) expands the limited scope of review to complex prepayment reviews as well as complex and automated post-payment reviews. This has the potential for serious impact as most MAC medical reviews seem to be performed on a prepayment basis.

There are still some exceptions to the limited reviews of which providers need to be aware. Claims overturned on appeal by a favorable decision to allow payment will still be subject to system imposed payment limitations, conditions or restrictions (for example, frequency limits or Correct Coding Initiative edits) which could result in new denials. These new denials will have full appeal rights.

Also, if the original reason for denial of a pre- or post-payment review was failure to submit requested documentation, upon appeal the contractor will review for all coverage and payment requirements, including medical necessity. This means “claims initially denied for insufficient documentation may be denied on appeal if additional documentation is submitted and it does not support medical necessity.” This seems fair to me, because not submitting requested documentation should not happen. If your hospital has denials for failing to submit documentation, a thorough review and correction of your Additional Documentation Request (ADR) process is needed.

The original SE1521 applied to redetermination/reconsideration requests received by a MAC or QIC on or after August 1, 2015, and was not applied retroactively. Likewise, the revised article will not be applied retroactively – it applies to redetermination and reconsideration requests received by a MAC or QIC on or after April 18, 2016. CMS also clarifies that “appellants will not be entitled to request a reopening of a previously issued redetermination or reconsideration for the purpose of applying this clarification on the scope of review. CMS encourages providers and suppliers to include any audit or review results letters with their appeal request. This will help alert contractors to appeals where this instruction applies.”

So let’s celebrate Medicare’s good news and enjoy a hot and sunny summer!