Publications

Changes in Part B Medicare Appeals under BIPA

By: Robert S. Iwrey, Esq., Wachler & Associates, P.C. Royal Oak, Michigan

First there was the BBA, then HIPAA, then the BBRA and now BIPA. The recently enacted Medicare, Medicaid and SCHIP Benefit Improvement Act of 2000 (BIPA) significantly revises the Medicare appeals process. Section 521 of BIPA, which is supposed to take effect October 1, 2002, establishes a new uniform process for handling all Medicare Part B appeals and specifies time frames for filing appeals and rendering decisions.

Under BIPA, Initial Determinations by the Secretary must be concluded no later than 45 days from the date the Secretary receives a claim for benefits. The current system allows the carrier 60 days to reach an initial payment decision on a non-clean claim. Under BIPA, a provider dissatisfied with the Initial Determination would have 120 days to request a "Redetermination" by the carrier, which must be completed by the carrier within 30 days of the request. Under the current system, such a request must be filed within 180 days of the Initial Determination, is referred to as a "Carrier Review," and must be completed by the carrier within 45 days.

If dissatisfied with the results of the Redetermination, under BIPA, an appeal may be had by requesting a "Reconsideration" within 180 days of the adverse Redetermination. Under the current system, a provider can appeal the Carrier Review within 180 days by requesting a "Carrier Fair Hearing" before a fair hearing officer. Such officers are generally employees of the carrier and their decisions are governed by the carrier's applicable local medical review policies. Moreover, an appeal to a fair hearing officer is only available if the denials total $100 or more. Under BIPA, the Carrier Fair Hearing will be replaced with a Reconsideration by a new legally created position known as a "Qualified Independent Contractor" (QIC). Under BIPA, CMS (formerly HCFA) must maintain contracts with a minimum of 12 QICs. The QICs conducting the hearings will be physicians or other health care professionals, not affiliated with the carriers, and will not be bound by local medical review policies. Therefore, providers will be able to challenge the application of local medical review policies that the providers deem unfair. Under the current system, such challenge is unavailable until the next level of appeal before an administrative law judge (ALJ). Under the current system, fair hearing officers have 120 days to conduct their appeal. However, under BIPA, the QICs will have only 30 days and are not required to hold a hearing. As such, providers appealing carrier Redeterminations hope that these appeal hearings will be more akin to a peer review process, with the QICs having a more empathetic approach based upon their practical experiences. Importantly, a provider can appeal denied claims to a QIC regardless of the dollar amount in question.

The next level of appeal under both systems is an ALJ Hearing, which must be requested within 60 days. ALJs are bound only by laws and regulations, not by CMS's administrative directives to carriers or local medical review policies. Under the current system, this level of appeal is only available if the denials total $500 or more. Under BIPA, this level of appeal is available if the denials total $100 or more. Under the current system, the ALJ is not bound by any time limitations. As present, it takes 441 days, on average, to adjudicate a Medicare Part B case. Under BIPA, ALJs would have 90 days within which to render a decision.

The final administrative level of appeal under both systems is to the Medicare Appeals Council (MAC), which must be requested within 60 days of the ALJ decision. Under the current system, the MAC is similar to an appeals court, reviewing ALJ decisions for legal sufficiency and whether the ALJs exceeded their legal authority. At present, the MAC has no time limitation as to when a decision must be rendered. Under BIPA, the MAC must render a decision within 90 days and appears to have a de novo approach to its review.

Under both systems, if the dispute is not satisfactorily resolved through the administrative process, and if contested amounts are greater than $1,000, a provider will be able to request judicial review by filing with the U.S. District Court.

Overall, BIPA mandates new and shorter time limits at nearly every level of appeal. Noncompliance with these time limitations could lead to the matter moving up to the next levels of appeal. Critics say that, due to these shorter time limits, cases may reach the District Courts without decisions and case development from prior administrative levels of appeal. Some believe that the Courts will simply remand these cases back to the Medicare Appeals Council (MAC) for lack of full administrative review. However, this would render the 90-day MAC time ineffectual as those cases will be sent back to a level that could not process them timely in the first place. Others believe that the Court will conclude that because the Medicare program failed to meet its time limits, appellants should win their appeals.

On January 1, 2002, the OIG recommended that CMS delay the implementation of Section 521 of BIPA until the agency can resolve problems that make the current system backlogged, overwhelmed and untimely. At present, there is pending legislation in the Senate that would delay certain appeal provisions until 2003.