CMS Releases Interim Final Rule on Claims Appeal Reform

BALTIMORE–CMS has released an interim rule on dramatic changes
to the Medicare claims appeals process.

The agency reform aims to reduce average timeframes for
fee-for-service Medicare claims appeals from 1,000 days to 300
days. Under the rule, a new entity for first-level appeals, called
Qualified Independent Contractors, will begin handling DME supplier
appeals, or “reconsiderations,” by Jan. 1 next year. The QICs will
include review panels of medical professionals who will reconsider
all cases involving medical necessity issues.

The government will also transfer Administrative Law Judges from
the Social Security Administration to HHS within the coming months,
a move that has caused some controversy among providers. ALJs, who
handle second-level appeals, maintain impartiality because they
work for the SSA, observers say, and moving them under the Health
and Human Services umbrella could create a conflict of interest.
CMS responded by saying the first-level appeals to the QICs,
handled by independent contractors, should help alleviate concerns
over fairness during claims appeals.

Those QICs, according to the agency, will offer “routine
considerations … of all medical necessity issues. As a result, we
believe these new procedures will lead, over time, to significant
reductions in the need to pursue appeals at the later stages of the
appeals system, such as ALJs and [Medicare Appeals Council]
reviews.” The MAC represents the third level of the appeals
process.

CMS is accepting comments on the interim rule until May 9. To
view the rule and to make comments, visit the CMS Web site at
www.cms.hhs.gov/appeals.