The Medicare Appeals Backlog

The Medicare appeals backlog is significant and has been increasing in recent years. Between 2010 and 2014 the number of Administrative Law Judge (ALJ) appeals grew 936%, from over 41,000 to nearly 433,000 -- by the end of 2014, the number of appeals pending at ALJ rose to close to 800,000. In the wake of this backlog, healthcare providers are typically waiting months if not years for an ALJ hearing; as such, ALJ decisions are almost universally issued well after the 90-day statutory deadline. In 2014, it took OMHA an average of 415 days to process an ALJ appeal; in 2015 that average rose to 662; in 2016 it took OMHA an average of 877 days to process an ALJ appeal.

For providers, these delays are a source of both frustration and financial consequence, primarily due to the fact that Medicare can statutorily recover an alleged overpayment shortly after a second level appeal decision issues, despite the fact that an appeals process may still be in process.
Changes to Address the Backlog

Relief – or at least improvement – appears to be on the horizon. In late 2016, the United States District Court for the District of Columbia ordered that the HHS Secretary reduce the appeals backlog according to the following timeline:

 30% reduction from the current backlog of cases pending at the ALJ level by 12/31/2017
 60% reduction by 12/31/2018
 90% reduction by 12/31/2019
 100% reduction by 12/31/2020.

In an effort to meet these mandated backlog reduction timelines, HHS issued a final rule on 01/17/2017 titled “Medicare Program: Changes to the Medicare Claims and Entitlement, Medicare Advantage Organization Determination, and Medicare Prescription Drug Coverage Determination Appeals Procedures.”

This recent final rule, which became effective in March, includes an assortment of initiatives to reduce the backlog, including:

 Giving select Medicare Appeals Council decisions precedential effect -- This is an important improvement due to the fact that, currently, even if the Medicare Appeals Council interprets a Medicare authority or provision in a specific way in a particular decision, that interpretation only applies to the case at hand. Therefore, a provider can’t contend that the interpretation of a Medicare authority or provision in a previous Medicare Appeals Council matter is binding in their case as well, even if the facts and issues are similar. HHS hopes the precedential nature of Medicare Appeals Council decisions will create consistency and efficiency in the appeals process.

 Expanding the pool of adjudicators at OMHA to include attorney adjudicators -- Attorney adjudicators are licensed attorneys employed by OMHA with specific knowledge of Medicare coverage and payment laws. HHS estimates that the expansion of the pool of adjudicators at OMHA could redirect more than 20,000 appeals per year to attorney adjudicators, thereby reducing the ALJ’s workload and speeding appeals processing times.

 Creating process efficiencies -- For example, allowing ALJs to vacate their own dismissals rather than requiring providers to appeal a dismissal to the Medicare Appeals Council.

Countering the Audit Risk

While a CMS authorized audit by a MAC or Supplemental Medicare Reviewer Contractor (SMRC) may be inevitable for many providers, there are steps that can be taken to reduce the risk and/or negative outcomes of an SMRC review, such as:

• Use “trigger” language – while in theory all records should be reviewed in their totality, certain words and phrases are more likely to catch a reviewer’s initial attention if they are not expressly stated.

Examples of such language include:
o “Admit to rehab”
o “D/C destination” on PAS
o “Medical prognosis” on IPOT
o “CLOF/PLOF” on PAPE
o Barriers on Team Conference

• Ensure timestamps -- While an argument can be made that dictation time should determine timeliness, RAC/SMRC/CERT reviewers only consider the document “complete” when it is signed, dated and timed. Therefore, admit orders must be signed before evaluations are initiated and PAPE must be signed within 24 hours.

• Don’t overlook the importance of correctly reported therapy minutes on the IRF PAI-- although CMS has stated the IRF PAI therapy minute data is not to be used as the basis for a denial, it is a ready source for identifying minutes that are under-provided and provided in group or concurrent settings. The data can also be used against a site if the minutes reported don’t add up to what is stated in the documentation.

• Clearly document the need and value to the patient for group therapy minutes -- CMS expects individual minutes to be provided as a preponderance of minutes per week. Some reviewers count the individual versus group/concurrent percentages by discipline, not as a collective total of the minutes provided in a week. If group/concurrent therapy is provided, ensure it is well documented as to need and value to the specific patient’s own clinical needs. Some MACs consider group or concurrent therapy to be “in addition to” the 900 minutes.

Post Payment Denials – Reviews and Appeals

When faced with a claims denial, providers should follow a deliberate and defined process when evaluating why and how to appeal. As a first step, a denial should be carefully reviewed and analyzed. For example, did the reviewer use the correct criteria for denying the stated IRF PAI admission score? Did the reviewer use the correct CMS interpretation of the IRF rules regarding therapy minutes, including group therapy? Did the reviewer use the correct CMS definition of the Rehab Medical Director qualifications? Fully understanding the denial is always the best first step in mounting an appeal.

Once the denial is fully reviewed, there are proven strategies a provider can employ to appeal the denial. Specifically, be sure to address the CMS-stated reasons for the denial and be certain to:

• Reference the IRF PAI instruction manual on how to determine admission IRF FIM scores (lowest in first 3 days, not the highest or average)
• Emphasize medical necessity at key points, including time of admission and throughout the stay
• Distinguish IRF level of care and medical management from lower levels of care in the local community
• Include a copy of the CMS language or definitions, as needed. According to CMS, “one of the primary objectives is to change the focus of IRF medical reviews from what may or may not have happened to the patient’s medical condition during their IRF stay, to what the IRF could’ve reasonably expected to happen given the patient’s condition and risk for clinical complications at the time of admission to the IRF.” For example, suppose that upon admission to an IRF, a patient has a risk for a clinical complication that could interfere with participation in rehabilitation therapy. This is information that would be a reason for the IRF stay to be reasonable and necessary even if the patient’s clinical complication is well managed by the IRF and does not actually cause further difficulties during the patient’s rehabilitation therapy program