As Medicare Conditional Payment Appeal Rules for Plans/Payers Become Effective 4/28/15, CMS to Host Webinar to Explain New Process and Offer Tips and Suggestions for Plans/Payers

RG Helios Professional Pictures (2)On April 22, 2015, the Centers for Medicare and Medicaid Services Financial Services Group (CMS) published a memo announcing the latest changes on “Appeal Rights for Applicable Plans for Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation.”

By way of background, the memo indicates that “on February 27, 2015, CMS issued a final rule implementing certain provisions of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act). This final rule established a formal appeals process for applicable plans in situations where the Secretary seeks Medicare Secondary Payer (MSP) recovery directly from an applicable plan. The rule is effective on April 28, 2015 and applies to demand letters issued on or after April 28, 2015.”

As defined in the new regulations, “applicable plans include liability insurance (including self-insurance), no-fault insurance, and workers’ compensation laws or plans. The SMART Act further requires that the Medicare beneficiary who received the items and/or services in question be notified of the applicable plan’s intent to appeal. The final rule can be found at 80 FR 10611, February 27, 2015.”

If an MSP recovery demand is issued to the beneficiary as the identified debtor, the beneficiary has formal administrative appeal and judicial review rights. Prior to this regulation however, “recovery demands issued to the applicable plan as the identified debtor had no formal administrative appeal rights or judicial review.” However these new rules change that as” the appeals process established in the final rule parallels the existing process for claims-based beneficiary and other appeals for both non-MSP and MSP, and is used for appeals involving both prepayment denials as well as overpayments.”

The memo explains that the final rule establishes a formal multilevel appeal process for applicable plans where MSP recovery is pursued directly from the applicable plan. This process includes:

  • An “initial determination” (the MSP recovery demand letter),
  • A “redetermination” by the contractor issuing the recovery demand,
  • A “reconsideration” by a Qualified Independent Contractor,
  • A hearing by an administrative law judge (ALJ),
  • A review by the Departmental Appeals Board’s Medicare Appeals Council, and
  • Judicial review.

The memo makes it clear that “the applicable plan is the only entity with appeal rights/party status when Medicare pursues recovery directly from the applicable plan. The beneficiary is not a party to applicable plan appeals. However, CMS is required to provide notice to the beneficiary of the applicable plan’s intent to appeal and will provide such notice if the applicable plan files a request for a redetermination.”

The memo also explains that “proper proof of representation must be submitted in writing prior to or with a request for appeal in order for an attorney, agent or other entity to file an appeal on behalf of an applicable plan or act on behalf of an applicable plan with respect to an appeal that has been requested.” Appeal requests without proper proof of representation will be dismissed. “Proper proof of representation may be submitted with a request to vacate the dismissal, but the better course of action is to make sure that proper proof of representation has been submitted when requesting a redetermination.” Separate proof of representation is required even where an applicable plan may have identified an agent for recovery correspondence as part of the Medicare, Medicaid & SCHIP Extension Act of 2007 Section 111 reporting process.

The memo indicates that “the applicable plan may appeal the amount of the debt and/or the existence of the debt. However, the regulation does not permit applicable plans to appeal the issue of who is the responsible party/correct debtor. Requests for appeal on the basis that the applicable plan is not the correct debtor will therefore be dismissed. Medicare’s decision regarding who or what entity it is pursuing recovery from is not subject to appeal.”

CMS’ memo can be found here.

In order to assist and inform interested parties and stakeholders, CMS also announced it will be presenting a webinar on “Applicable Plan” Appeals. The presentation will include “an introduction to the appeals process (as the process is new to applicable plans), information on the appeals process specific to applicable plans, and tips/suggestions to applicable plans regarding the recovery process, including appeals.” The webinar will be held on April 28, 2015 at 1:00 PM Eastern time, and sign-ups are now open. CMS has asked that those planning on attending begin logging in approximately 15 minutes before the start time, due to the large number of anticipated participants.

For those of you interested in learning more about what this new appeals process means for payers, please visit  this article on workcompwire.com where I discuss that the MSP Act has always provided the Medicare beneficiary with the right to seek an appeal if he or she disagreed with the amount of the reimbursement sought by Medicare. However, despite considering workers’ compensation plans, liability and no-fault insurers, and self-insurers as primary payers, the MSP Act did not include an appeals process for these non-group health plans (NGHPs). If a payer disagreed with Medicare’s assessment of a conditional payment owed, there was no formal process for an appeal. In 2013, the Strengthening Medicare and Reimbursing Tax Payers (SMART) Act proposed an amendment to the MSP, which would give NGHPs the right to appeal and a formal appeals process when Medicare pursued a recovery directly from them. After more than a year of collecting and considering public comment, CMS published the final rule, which becomes effective April 28, 2015. Finally, employers, carriers, and administrators in the workers’ compensation system will have a process to voice their disagreement or concerns with the items and amount of Medicare reimbursement.

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