Secrets of Successful Appeals

The times they are a-changin.’ Those Bob Dylan lyrics could herald the changeover affecting reimbursement appeals. As of July 1 this year, the Administrative Law Judges who work for the Social Security Administration no longer hear appeals of reimbursement denials for government programs. Instead, the ALJs are employed directly by HHS.

What will this restructuring mean for medical equipment suppliers? Many advisers fear that, now the ALJs are employed by HHS, they may not bring the same objectivity to their positions as they did when they were part of SSA. Indeed, one ALJ told me that, as of early August, not a single one of the hundreds of ALJs who specialized in health care appeals had been asked to join HHS’ team.

So, as we transition into a brave new world of reimbursement appeals, let’s identify some of the rules, tips and tricks for appealing claims denials and overpayment demands. These are secrets I have learned over almost 25 years of appeals. No wishful thinking. No platitudes. Just clear, practical insight about what works — and what doesn’t.

For this discussion, let’s focus on power mobility since the payment rules for this equipment generate so much controversy. In power mobility appeals, I have tried many different arguments, some standard and some creative. Which work? When? What lessons can we learn for successful appeals generally?

Here are six rules, tips and tricks (RTTs) for successful appeals:

RTT#1

It’s all about medical necessity

When appealing denials or overpayment demands, it’s worthwhile to identify legal arguments that may help sway the ALJ. For power mobility, I have sometimes argued that CMS applied the wrong transitional standard (when, for example, the rules changed between the dates of service and the time of investigation); or, that the Maximum Comfort case from California (Maximum Comfort, Inc. v. Thompson) suggests that only the certificate of medical necessity matters. (By the way, this case is under appeal, and CMS’ upcoming changes to mobility assist equipment reimbursement may affect the question anyway.)

But the ALJ’s primary mission is to determine whether a specific item of durable medical equipment was medically necessary for a specific patient at a specific moment. That’s it. So any legal arguments about poor notice, wrong interpretation of law, statutory intent or whatever must fit squarely within an analysis of medical necessity for each specific denied claim.

Sometimes when the same legal arguments pervade a number of claims denials, I discuss these broader legal issues in detail, then note their applicability to specific claims denials as I address them singly and consecutively. But most of the presentation must focus on the sequential analysis of the medical necessity of each claim. Get as creative as the situation warrants, but do it within the framework of medical necessity.

It is also important to remember that the ALJ’s mission is different than the DMERC’s. A DMERC will pay or deny based on compliance with its rules. The ALJ will note the rules and even give them some deference.

But, at the end of the day, the ALJ’s goal is to assess whether the HME was medically necessary within the coverage parameters of the statutory and regulatory policy. With power wheelchairs, for example, the statutory and regulatory framework limits coverage to situations where the MAE is needed for home use, so an ALJ would not consider whether a patient needed the power feature to ambulate outdoors.

RTT#2

The rules are stacked against the supplier, so prepare accordingly

Providers are at a disadvantage throughout the appeals process. For claims preceding July 1, during the initial hearing before a Hearings Officer — now to be split between “redetermination” and “reconsideration” appeals under the new rules — the hearing officer has the right to reexamine all the evidence, including items previously approved by the DMERC. Under the new rules for both redetermination and reconsideration, that is also the case. While this does not mean that they will review claims that have been approved, they will comment on any additional deficiencies they observe with regard to contested claims, even if the DMERC had not focused on those problems.

Further, while the DMERCs are required to turn over all of the evidence they used to make their determinations, in practice they rarely turn this material over prior to the hearing. I have written to demand the information on multiple occasions, but my demands have never been answered. I have made the request to the Hearing Officer but, again, without success. Consequently, as a practical matter, it is quite difficult — and often impossible — for a supplier to find out which evidence shaped the DMERC’s decision and the Hearing Officer’s evaluation until after the hearing.

This is especially problematic for power mobility appeals, because information the DMERC receives from patients and physicians is key to its determination of payment entitlement. When the DMERC alerts the supplier during its investigation phase that it is seeking information for particular patients, the supplier has the opportunity to “shadow” the DMERC in order to facilitate the delivery of this information and to push patients and physicians to answer questionnaires and turn over thorough and accurate information.

But if the DMERC conducts its investigation without alerting the supplier, the supplier doesn’t learn what information resulted in the DMERC’s decisions until the initial hearing or even later, when it is time to evaluate whether to pursue an ALJ appeal.

The solution to this problem is to chase the information aggressively as soon as you are alerted to the denials. Get the records. Talk to the patients. Learn all you can, even if you didn’t know an investigation had already occurred.

RTT#3

ALJs don’t generally stick their necks out

Let’s face it: When arguing claims denials or overpayment demands for power mobility, you need to get creative. Rules and policies have been in flux for quite a while, so I have had many opportunities to argue that the DMERC applied the wrong local medical review policy to a claim.

Rules, policies, guidelines and preferences have been communicated in various ways, ranging from local DMERC bulletins to supplier manual guidance. So, I have argued that the supplier couldn’t be expected to know about a rule when it was difficult to track down the information. Rules have sometimes overlapped with other, inconsistent rules, particularly when CMS went through one of its “retroactivity” phases. So, I have argued that the inconsistency was confusing and therefore raised legal arguments about “notice” and “constructive knowledge” and fairness.

I have crafted articulate and clever arguments about shifting the burden of proof to the DMERC; patient confusion when answering questionnaires; equitable arguments about the DMERC’s poor or late communication and follow-up; the “limitation of liability” provisions of the Social Security Act; and many others. But these rarely win the case.

ALJs enjoy using their legal skills, and don’t get enough chances to do so. In my experience, almost every ALJ I have encountered is interested by my legal arguments and efforts at creative persuasion. But, ultimately, the ALJ’s job is to enforce the Social Security Act, which leads back to the determination of medical necessity consistent with the coverage limitations created by statute and (usually) regulation.

Legal arguments will not usurp a basic assessment of medical necessity. Comments about unfairness will not usually persuade an ALJ to move beyond the medical record in determining payment entitlement. When case law does take a novel and contrarian position, such as the Maximum Comfort case, the ALJs will typically assess the merits of each case with zeal, using their critical lawyer skills and their knowledge of administrative law. But more often than not, this has resulted in the ALJ rejecting the more aggressive case law.

RTT#4

Physicians may be “captains of the ship,” but ALJs know how to navigate — and so must you

I have often argued in power wheelchair cases that the CMS policies unfairly require the supplier to usurp the physician’s role as “captain of the ship.” ALJs generally are not sympathetic to this argument when it relates to an HME supplier’s ability to review and comprehend medical records, and to seek clarification and supplementation where necessary.

This makes some sense. The ALJ’s job, after all, is to evaluate whether the claim was medically necessary, consistent with the statutory or regulatory coverage policy. This necessarily requires the ALJ to review the medical record and assess its sufficiency to justify medical necessity. ALJs are good at this, not because they are physicians but because they have learned how to do it well. The industry is filled with consultants, advisers, coders, case managers and other non-physicians who are good at reviewing and assessing medical records.

You see where this is heading? If they can do it, so can you. You are not mutinying against the captain of the ship by assessing whether the written record justifies the decision, nor whether it justifies the referral prescription consistent with the coverage policy. You are not mutinying against the captain of the ship if you seek clarification or supplementation where the record is deficient. You are not second-guessing his judgment, but merely pointing out that the record does not support the diagnosis. This is usually a deficiency in the record, not in the diagnosis.

Further, many physicians are insensitive to the coverage requirements when making their prescriptions. It is, at least from the perspective of the ALJs, necessary for the supplier to take on this role — and to learn to do it well.

RTT#5

Bad policies don’t matter if you can’t establish medical necessity

If a claims denial or overpayment demand is based on policy directive from CMS, the ALJ is required by law to favor the legitimacy of the policy. The supplier certainly may argue that the policy is contrary to statute or regulation, or that it cannot be enforced because it contradicts another policy. But it is quite difficult to persuade an ALJ to overturn or ignore policy because it is unfair.

Under the rules, ALJs are supposed to treat LMRPs with no special consideration. Instead, the ALJ is supposed to exercise whatever deference to those rules he deems appropriate. In my experience, however, ALJs tend to give almost as much deference to LMRPs as to other CMS policies. Your best bet for persuading the ALJ to reject an LMRP is to demonstrate that it is inconsistent with another policy or rule (including rules in other jurisdictions), that it was applied retroactively or that it reflects clear overreaching beyond CMS’ authority. Then cross your fingers.

Another technique an ALJ may use is to ignore strong arguments against certain policies when the policy is not central to the ALJ’s decision. In the specific context of power wheelchairs, for example, I have argued the inappropriateness of CMS policies that impose documentation and record-keeping rules retroactively. I personally believe most of these policies are unlawful.

However, in every case in which I have argued this point, the ALJ has decided the claims under appeal on different issues. No ALJ before whom I have brought this argument has ever commented on it in an opinion. Perhaps I may infer that my argument is strong. This probably means that the ALJs wished to avoid overturning policy when they could render a medical necessity decision without doing so. After all, why decide about retroactivity when the record doesn’t support medical necessity anyway?

(But suppose medical necessity was clear, and retroactivity was the reason for denial? In theory, I should win. In reality, the situation hasn’t yet arisen for me.)

RTT#6

Use these RTTs to identify smart behavior

If we look at these rules, tips and tricks objectively, we can often learn lessons about how to operate more profitably.

Here, for example, we have discussed how everything comes down to medical necessity; that medical necessity is reflected entirely from the record, which must clearly support medical necessity within the context of the statutory and regulatory coverage framework; and that suppliers are responsible for learning how to read and evaluate a medical record.

Regardless of all of the other “garbage” that CMS and the DMERCs have shoveled onto the issue of power mobility, these basic RTTs lead us to a sobering but important insight: Suppliers of power mobility to government-reimbursed patients should review and fix the medical record before selling the unit.

Of course, you could try to avoid this conclusion by having all of the patients sign ABNs in the event of a determination of non-medical necessity. But you had better be prepared to chase patients — one, two or even three years later — for an expensive piece of equipment that they may not even use anymore.

As a practical matter, it is usually better to verify medical necessity prior to selling the chair. I realize doctors will complain and your competitors may try to capitalize on these complaints. But view this as a marketing and public relations challenge. After all, your competitors won’t get to keep the money if they can’t support medical necessity either.

There are many more RTTs to discuss. Still, these core ideas may help suppliers appeal claims denials and overpayment demands more successfully. Both within the specific context of power wheelchairs and in general, these rules, tips and tricks offer insight as to how to get paid in the first place, and how to avoid the appeal process altogether.

Neil Caesar is president of the Health Law Center (Neil B. Caesar Law Associates, PA), a national practice in Greenville, S.C. He also is a principal with Caesar Cohen Ltd., which offers compliance training and consulting, and the author of the Home Care Compliance Answer Book. He can be reached at [email protected] or by phone at 864/676-9075.