Posted April 25, 2002
Nursing facilities in Texas are struggling to keep afloat. With dramatic increases in liability insurance premiums, the second lowest amount reimbursed to facilities per resident in the nation, and significant civil monetary or administrative penalty imposition by the State and CMS, it is not surprising that numerous facilities are shutting their doors across the State. Given these conditions, it is important that nursing facilities be reimbursed for services provided to residents by Medicare in order to survive. However, the fact of the matter is that Medicare’s failure to reimburse facilities for services rendered is placing many facilities in a hardship.
A denial for payment by Medicare is not the end all, however. A facility does have the right to appeal a decision by Medicare. Appealing Medicare determinations of individual claims or cost reports can help facilities recover what is rightfully owed to them.
Appealing Part B Individual Medicare Claims
In order to prevail in appealing determinations by Medicare which deny payment for services provided to individual residents, it must be proved that the services provided were certified by a physician and were reasonable and necessary. A strong, well-informed expert witness, often times the facility medical director, is extremely helpful in establishing that the services were reasonable and necessary. Accurate and comprehensive resident records, physician notes and nursing notes are just as important in establishing that the services were necessary for the resident at the time period at issue. If the facility is confident that it will be established at hearing that the services provided were reasonable and necessary, and certified by a physician, based on document review and expert opinion, the facility should hire an attorney who will act with the facility to follow these steps:
- Prepare a Request for Reconsideration
When the facility learns that a particular Medicare claim was denied, a request for reconsideration should be submitted to the Medicare Intermediary. This is a simple letter outlining why the claim at issue should have been paid, and gives the facility the opportunity to provide supporting documentation. The letter from the Medicare Intermediary denying a specific claim will identify to whom the request for reconsideration should be addressed, and when it must be submitted.
- File a Formal Appeal
If a request for reconsideration is denied, a formal appeal may be filed with the Medicare Intermediary, which will be forwarded to CMS. The appeal request must identify the error committed and why the claim should have been paid. A separate appeal must be filed for each individual denied claim.
- Prepare for Hearing
The attorney and expert have approximately 10-12 months after the appeal is filed before the hearing is held. During this time, it is important for the attorney and expert to become extensively familiar with all facts and residents, compile supporting documentation, and prepare defenses for any missing information from the record.
A hearing will be held before a Social Security Administrative Judge and a medical expert employed to assist the Judge. The facility’s expert and attorney will attend the hearing on behalf of the facility. At hearing, the medical director and attorney will attempt to establish that the services in question were necessary, reasonable, and certified by a physician. The judge’s medical expert will help her understand the facts at hand from a medical standpoint, and whether this standard has been met. The expert is “impartial” in theory, but he has tremendous influence as he informs the judge as to his opinion. The facility’s attorney may cross-examine the judge’s expert. Each hearing lasts approximately one hour. A decision is usually rendered within 6 months of the hearing.
Medicare Cost Report Appeals
If the facility is reimbursed at a lower amount than it should have been as a result of an inaccurate cost report, the facility may also appeal in this situation. Simple errors on the face of facility Medicare cost reports, committed either by Medicare or the facility, can also cost facilities thousands of dollars. If these errors are recognized, the facility should immediately file an appeal of its cost report.
1. File Appeal
A cost report appeal must specifically identify the error that occurred in reimbursing the facility, based on the Medicare cost report. Again, thorough documentation is necessary in proving each error. An attorney may be helpful in explaining and sifting through the intricate Medicare guidelines to determine if an argument will prevail. A well-informed facility CPA or financial representative is also crucial in identifying the errors that occurred, and determining the monetary amount that the facility should be reimbursed.
2. Submit Position Paper
Subsequent to filing a cost report appeal, the facility’s attorney must submit a position paper, which identifies the factual and legal basis for why the facility should be reimbursed. Usually, an offer for settlement is also included in the position paper. A fiscal intermediary representative will review this paper, submit a response, and usually propose a counteroffer.
Cost report appeals go to hearing in less than 5% of the cases. If settlement is not reachable through the position paper, a hearing will be held before the Provider Reimbursement Board.
Thus, in many instances, it may be beneficial to fight Medicare determinations and recover what should have been paid to facilities. An attorney well versed in reimbursement may prove that fighting these cases is worthwhile.
All information in this article is informational only and is not legal advice. Should you have any questions or a situation requiring advice, please contact an attorney.
Copyright 2004 by Garlo Ward, P.C., all rights reserved
Austin, Texas 78752-3714 USA