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Background
Beneficiaries in Traditional Medicare and enrollees in Medicare Advantage plans can protect their right to receive services and payment of claims through the grievance and appeals process.
An appeals system is essential for correcting coverage and payment errors. Medicare provides its beneficiaries with a number of protections that may be enforced through the appeals process. In most cases, beneficiaries must initiate the appeal. For example, a beneficiary may appeal the denial of a claim for payment by a Medicare administrative contractor such as the Part A intermediary, Part B carrier, or Medicare Advantage plan.
Claims denied for arbitrary reasons may be appealed at several levels, up to a federal court of appeals. Arbitrary decisions may result from incentives created under contracts with the Centers for Medicare & Medicaid Services (CMS) or because proper procedures were not followed. Medicare beneficiaries may request a second look, or redetermination, by the contractor that made the initial denial decision. An adverse finding is sent to a review organization known as a qualified independent contractor. If this contractor also denies the claim, the decision may be appealed to an administrative law judge (ALJ), then to the Department of Health and Human Services (HHS) Departmental Appeals Board, and finally to federal court, depending on the disputed amount. Unlike a coverage determination challenge, the results of an appeal apply only to the individual beneficiary’s claim.
The right to challenge broad coverage decisions is distinct from the right to appeal for individual claims that are denied on the grounds of lack of medical necessity.
Beneficiaries may also challenge coverage decisions about items and services that they and their physicians believe are medically necessary but that the contractor or CMS says Medicare does not cover. The right to challenge coverage decisions involves reviewing the entire coverage policy. This may lead to changes that affect other beneficiaries. An adverse decision on a Medicare coverage issue may be taken to the Medicare Appeals Council and then to federal court.
Decisions by Medicare contractors and the Medicare Appeals Council typically favor the government, in part because they follow CMS statements of Medicare policy. Decisions by ALJs and federal courts, which are not bound by CMS policy and thus may overrule it, tend to be more balanced because they provide independent interpretations of Medicare rules.
Finally, a Medicare beneficiary may file a complaint about service quality with a Quality Improvement Organization. The claim may be further appealed to the HHS Departmental Appeals Board. Beneficiaries who have been harmed by treatment may file a civil suit for malpractice against the provider or physician in state or federal court.
The Medicare appeals process itself is complicated and lengthy. Many beneficiaries find the process confusing. They do not always receive information about the reason for a coverage or claim denial. And when they do, they may not understand it. Often, they are unaware of their appeal rights.
Regulations relating to appeals, including rules pertaining to the Part D drug benefit, were issued in 2005. But they do not provide adequate beneficiary protections. Drug plans, for example, are not required to automatically forward adverse decisions for independent review.
Formerly employed by the Social Security Administration, ALJs who hear Medicare cases now work for HHS. The agency has made a number of changes in the status of ALJs and the rules under which they decide cases, limiting their independence and potentially their impartiality. In another change, HHS adopted the use of videoconferencing instead of in-person hearings for most ALJ cases.
The Affordable Care Act requires commercial insurers and managed care plans to have an effective internal appeals process for claims and coverage determinations. It also requires an external review process under state law or federal standards.
MEDICARE BENEFICIARY RIGHTS: Policy
MEDICARE BENEFICIARY RIGHTS: Policy
Appeals in Medicare Parts A & B (Traditional Medicare)
Appeals procedures should be as simple as possible without compromising beneficiary protections. All decisions that could result in a beneficiary not receiving care should be made and communicated as rapidly as the beneficiary’s medical situation warrants.
Appeals procedures should ensure basic fairness for the beneficiary, such as an opportunity for an informal in-person hearing by the Medicare administrative contractor.
Beneficiaries and their representatives should have access to all information and documents in their case that are related to coverage, payment, and quality of care.
The Centers for Medicare & Medicaid Services should give Medicare contractors incentives to make the correct decision on a claim at the first level of review.
Medicare beneficiaries and others directly affected by coverage or claim denials should receive a timely written explanation of the decision and their appeal rights. This information should be understandable to a layperson and include citations to the legal authority for denial.
Statutory timelines for resolution of grievances and appeals (usually 60–90 days) should be adhered to and enforced at each level of appeal.
The Department of Health and Human Services (HHS) should publish the number and result of appeals—by hospitals, physicians, and other providers for payment of claims, beneficiary complaints, and coverage denials at each level—from initial hearing to final disposition.
Part D Appeals: The grievance and appeals process for the Medicare Part D drug benefit should be streamlined to include faster dispute resolution. It should also include access to temporary drug supplies that last through the resolution of the pending appeal. To avoid delay, Medicare beneficiaries’ appeals should not require action by the beneficiary. Appeals should be sent automatically to the first level of independent review.
Medicare Advantage grievances and appeals
Health plans should have a process to file grievances about furnished services for which the beneficiary has no further payment liability (e.g., physician behavior, waiting times, and quality of care).
Health plans also should have an appeals process to address disputes that involve the denial, termination, or reduction of services or payment.
Grievance and appeals procedures should include provisions regarding furnishing information to beneficiaries, independent review, fairness, and timeliness.
Information: When a requested service or payment is denied, or when needed care is reduced or terminated, beneficiaries must receive timely, clear information about such decisions, a list of the specific reasons for the decision, and a description of the right to appeal and the procedure for doing so. Information must include the medical criteria that were relied upon and the process followed by the plan in reaching its decision. The methods of communicating information about the denial and appeals process must meet the specific needs of an older population, taking into account vision or reading difficulties and differences in language and culture.
Independent review: Beneficiaries must have the right to have their claims reviewed by independent entities that are not appointed or selected by the health plan. Such a process should include an external review of medical necessity by medically qualified reviewers of plan decisions, followed by a hearing before an administrative law judge and access to the federal courts. There should be no charge to the enrollee for gaining access to such independent review or for the review itself.
Fairness: Plans must give adequate advance notice before terminating or reducing any services that a beneficiary is already receiving. Specific reasons for the termination or reduction and clear instructions on how to appeal the decision must be given. Ongoing services, particularly hospital inpatient services and skilled-nursing or rehabilitation services, should be covered until the reconsideration is complete. The beneficiary should not be responsible for the costs of the appeals process, including the cost of external medical review. The appeals process must include an opportunity for the beneficiary to attend the review in person, testify, submit evidence, and call and question witnesses.
Timeliness: Appeals of service denial, termination, or reduction must have specific time limits that reflect beneficiaries’ medical needs. Expedited review must be available in cases where the regular time limits would jeopardize the beneficiary’s life, health, or ability to regain or retain maximum function. In addition, fast-track appeals should be available for those enrollees requesting immediate review of a plan’s decision to discharge them from a skilled-nursing facility, comprehensive outpatient rehabilitation facility, or home health agency. Such cases should be resolved as rapidly as the situation requires, never exceeding a specified maximum amount of time. A plan’s failure to meet specified deadlines or provide necessary information should result in automatic approval of both expedited and regular appeals.
Health plans should collect and report data on grievances and appeals in standardized formats.
Administrative law judges (ALJs)
ALJs should not be influenced by HHS. They should be allowed to make impartial decisions in hearings.
ALJs should be required to assist beneficiaries without representation in developing the record of the hearing.
Medicare beneficiaries who appeal their cases to an ALJ should have an in-person hearing upon request.
The beneficiary appeals process should include impartial judicial forums. The appeals process should be streamlined by eliminating Medicare Appeals Council reviews and allowing ALJ decisions to be appealed to an impartial forum such as federal court.