Appeals and Denied Claims Management
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Denial Process

Denials Process Overview

OVERVIEW

It is no longer uncommon for facilities to receive communications from Medicare review agencies requesting proof of skilled services. It is in the best interest of the facility to understand the process to manage the inquiry in a timely and detailed manner in order to minimize lost Revenue. Much of the following information has been provided by CMS to better understand the Medicare appeals process.

Section 521 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) included provisions aimed at improving the Medicare fee-for-service appeals process. Part of these provisions mandate that all second-level appeals (for both Part A and Part B), also known as reconsiderations, be conducted by Qualified Independent Contractors (QICs).

The Centers for Medicare & Medicaid Services (CMS) contracts with Medicare Administrative Contractors (MACs) to assist with local claims processing and the first level appeals adjudication functions.

Many times the process starts with an Additional Development Request (ADR). These can be triggered by items specific to the patient, such as the RUG score or ICD-9 code billed, or they can be part of a wide spread probe. Under probe reviews, contractors may examine 20 – 40 claims per provider for provider-specific problems. Contractors also conduct widespread prove reviews (involving approximately 100 claims) when a larger problem, such a as a spike in billing for a specific procedure, is identified.

It is not uncommon for an ADR to result in the denial of part or all of a claim. Once an initial claim determination is made, providers, participating physicians and other suppliers have the right to appeal.

  • Physicians and other suppliers who do not take assignment on claims have limited appeal rights.
  • Beneficiaries may transfer their appeal rights to non-participating physicians, or other suppliers who provide the items or services and do not otherwise have appeal rights. Form CMS-20031 must be completed and signed by the beneficiary and the non-participating physician or supplier to transfer the beneficiary’s appeal rights.
  • All appeal requests must be made in writing.

Medicare offers five levels in the Part A and Part B appeals process. The levels, listed in order, are:

  • Redetermination by a MAC
  • Reconsideration by a QIC 
  • Hearing by an Administrative Law Judge (ALJ)
  • Review by the Medicare Appeals Council within the Departmental Appeals Board, (hereinafter “the Appeals Council”)
  • Judicial review in U.S. District Court

redetermination is a review of the claim by the MAC utilizing personnel who are different from the personnel who made the initial determination. The appellant (the individual filing the appeal) has 120 days from the date of receipt of the initial denial to file an appeal. A minimum monetary threshold is not required to request a redetermination.

If the facility is dissatisfied with the result of the redetermination, they may request a reconsideration. A Qualified Independent Contractor (QIC) will conduct the reconsideration. The reconsideration process is an independent review of medical necessity by a panel of physicians or other health care professionals. A minimum monetary threshold is not required to request a reconsideration.

If at least $130.00 remains in controversy following the QIC’s decision, the facility may request an ALJ hearing within 60 days of receipt of the reconsideration. The facility must also send a notice of the ALJ hearing request to the QIC and verify this on the hearing request form or in the written request.

If the facility is dissatisfied with the ALJ’s decision, they may request a review by the Medicare Appeals Council. There are no requirements regarding the amount of money in controversy. The request for Appeals Council review must be submitted in writing within 60 days of receipt of the ALJ’s decision, and must specify the issues and findings that are being contested.

In general, the Appeals Council will issue a decision within 90 days of receipt of a request for review. That timeframe may be extended for various reasons, such as the case being escalated from an ALJ hearing. If the Appeals Council does not issue a decision within the applicable timeframe, you may ask the Appeals Council to escalate the case to the Judicial Review level.

If at least $1,260.00 or more is still in controversy following the Appeals Council’s decision, the facility may request judicial review before a U.S. District Court judge. The appellant must file the request for review within 60 days of receipt of the Appeals Council’s decision.

More information about the specifics of these areas is provided in the subsequent chapters of this manual.

MEDICARE ADMINISTRATIVE CONTRACTORS

The following information has been taken directly from:

https://www.cms.gov/Medicare/Medicare-Contracting/Medicare-Administrative-Contractors/Who-are-the-MACs-A-B-MAC-Jurisdiction-E-JE.html#Contract Award Information

In April 2006, the Centers for Medicare & Medicaid Services (CMS) began to award Medicare claims processing contracts (A/B MAC contracts) through competitive procedures. The first download below depicts the fifteen A/B MAC jurisdictions that have served as the foundation for CMS's initial series of 15 A/B MAC procurements.

Through the initial series of A/B MAC procurements, Medicare's claims processing operations have realized significant operational savings from the consolidation of state workloads and the efficiencies gained through integrating Part A and Part B functionality. CMS believes that the efficiency and effectiveness of its contracted Medicare claims operations can be further increased by consolidating some of the smaller A/B MAC workloads to form larger A/B MAC jurisdictions, further reducing the size range among the A/B MACs. In addition, CMS believes that reducing the number of A/B MAC contracts to ten will improve the efficiency and effectiveness of CMS's internal MAC procurement and contract administration processes.

To achieve its ultimate goal of ten A/B MAC contracts, over the next several years, CMS will consolidate the following ten A/B MAC workloads, comprising five pairings, to form five consolidated A/B MAC contracts.

  • A/B MAC Jurisdictions 2 and 3 (Alaska, Washington, Oregon, Idaho, North Dakota, South Dakota, Montana, Wyoming, Utah, and Arizona)
  • A/B MAC Jurisdictions 4 and 7 (Louisiana, Arkansas, Mississippi, Texas, Oklahoma, Colorado, and New Mexico)
  • A/B MAC Jurisdictions 5 and 6 (Minnesota, Wisconsin, Illinois, Kansas, Nebraska, Iowa, and Missouri)
  • A/B MAC Jurisdictions 8 and 15 (Kentucky, Ohio, Michigan, and Indiana)
  • A/B MAC Jurisdictions 13 and 14 (New York, Connecticut, Massachusetts, Rhode Island, Vermont, Maine, and New Hampshire)

Jurisdictions 2 and 7 were originally solicited in 2006, but will not be implemented based on their original solicitations. Rather, CMS will integrate these workloads into new solicitations that will, respectively, also incorporate the Medicare workloads performed by the existing A/B MAC Jurisdictions 3 and 4. The first solicitation will consolidate A/B MAC Jurisdictions 2 and 3, and the second solicitation will consolidate A/B MAC Jurisdictions 4 and 7.

CMS intends to re-compete five A/B MAC contracts/jurisdictions based on their present area boundaries, as the current A/B MAC contracts run their course. These five contracts/jurisdictions will not be increased or reduced in size by CMS's consolidation strategy. The five A/B MAC contracts/jurisdictions that will not be further consolidated are:

  • A/B MAC Jurisdiction 1 (California, Hawaii, Nevada, Pacific Islands)
  • A/B MAC Jurisdiction 9 (Florida, Puerto Rico, US Virgin Islands)
  • A/B MAC Jurisdiction 10 (Alabama, Georgia, Tennessee)
  • A/B MAC Jurisdiction 11 (North Carolina, South Carolina, Virginia, West Virginia)
  • A/B MAC Jurisdiction 12 (Delaware, Maryland, Pennsylvania, New Jersey, Washington DC)

THE DENIAL PACKET

In order to effectively manage a Medicare denial, the facility must work as a team to gather the pertinent information. The facility should assign a team leader to oversee the denial package and then all members of the team should review the medical record to ensure their pieces of the puzzle are present and complete.

The following team members should be included in the process:

  • MDS Coordinator
  • Director of Nursing and possibly unit managers
  • Head of the Restorative Nursing program
  • Director of Therapy and possibly any therapists involved in the patient’s care
  • Social Services
  • Dietary

It is important to read the ADR or denial letter thoroughly as the letters will assist the facility in gathering the appropriate information. The following is a list of items to include in the medical record. It is always in the facility’s best interest to include additional information not listed that will support the services provided.

  • Initial MDS and any MDS that corresponds to the billed dates of service.
  • All physician’s orders, MD certifications, and progress notes for the dates of service in question. 
  • History and Physical
  • MD re-certifications for skilled stay for billed dates. If the certification is signed by a Nurse Practitioner it is recommended the facility submit an attestation letter verifying no direct or indirect employment relationship with the SNF
  • Hospital records that validate a qualifying stay
  • Nurses’ notes
  • Care Plan
  • MAR and TAR
  • Any other documentation that relates to the condition for which services were rendered that skilled the patient for SNF coverage.
  • Documentation of all therapies provided, including evidence of MD supervision, evaluations, progress notes, and therapy billing logs.
  • All records for MDS look-back periods. This can be up to 30 days prior to the MDS.
  • Diagnostic testing and lab work
  • Documentation of adjustment to HIPPS codes resulting from MDS corrections
  • Signature log for all staff members documenting in the medical record during the dates in question, including printed name, credentials, and handwritten signature.

It is important to know the consequences if the facility does not submit all the necessary paperwork. The facility needs to review the packet carefully to avoid a technical denial based on missing information.

Once all the information has been gathered and checked by the individual team members, the team leader should double check the medical record. Always keep a copy of the packet sent to the reviewing agency. It is recommended the facility have a tracking system in place to monitor when the ADR or denial was received, when the packet was sent out, and the final results of the review. Sample tracking forms are included in this chapter.

Once the medical record has been thoroughly reviewed, a member of the team should write a letter to the reviewing agency explaining the services provided to the patient. The following chapters provide sample letters for each stage of review to assist in this process.

MEDICAL RECORD CHECKLIST

ADDITIONAL DOCUMENTATION REVIEW TRACKING LOG

DENIAL TRACKING FORM

[PRINT ON FACILITY LETTERHEAD]

SAMPLE

CORRECTIVE ACTION PLAN

Facility Name: _________________________________________________________

Provider Number: _________________ Original Review Date: _________________

Medicare Contractor Name: ______________________________________________

For each identified denial reason/adjustment cause, state the steps that will be taken to ensure compliance with the required policy / standard by the designated due date. This plan should include how your facility plans to ensure that complete medical records are submitted when requested to document the medical necessity of the services. In addition, you should include your plans on how to ensure that all components of skilled nursing facility services are medically necessary. (Use additional sheets as necessary.)

Denial/Adjustment reason sited: __________ Plan implementation Date: ________

Corrective Action to be implemented:

 

 

 


Denial/Adjustment reason sited: _________ Plan implementation Date: _________

Corrective Action to be implemented:

 

 

 

 

APPROVAL OF PLAN:

Administrator: __________________________ Date: _________________________

Director of Nursing Services: _____________________ Date: _________________

Other (specify): ________________________ Date: __________________________

SIGNATURE LOG

DENIAL VERBAGE EXAMPLES FROM MEDICAL REVIEW

"SNF - Insufficient Documentation ( total denial) Records received, documentation submitted did not include the documentation for the hospital look back period to support the 3-day qualifying stay for admission to a SNF." Resident was in the hospital from 6/27/07-7/16/07 for Sepsis and Altered Mental Status. The facility admitted resident on 7/16/07 and was placed on PT and OT. The only hospital records that were sent by the facility was the MAR that showed meds given from 7/10/07-7/16/07.

"SNF - Insufficient Documentation ( total denial) Records received, documentation submitted did not include the documentation for the hospital look back period to support the 3-day qualifying stay for admission to a SNF. Riverbend GBA has concluded that the therapy minutes recorded in the patient service record were rounded up to units, and units converted to minutes reported on the MDS. Per the RAI manual, this is not appropriate. The MDS instructions clearly require reporting the actual." The facility admitted resident on 6/5/07 and was placed on PT and OT. The only hospital records that was sent by the facility was the MAR that proved that patient received Lasix IV Push from 5/30/07 - 6/1/07 (MAR showed meds given from 5/30/07-6/5/07).