The Science Journal of the American Association for Respiratory Care

1997 OPEN FORUM Abstracts

Medicare Denials: The Payor's Perspective

Melvin A. Welch, Jr., MPH, RRT, December 8, 1997.

Medicare Fiscal Intermediaries (FI's) are given the responsibility to process claims submitted by providers of care to Medicare beneficiaries. The FI is provided some guidance by various policies and directives from the Health Care Finance Administration (HCFA) central office. However, these various Medicare (HCFA) manuals and policies leave considerable latitude in the determination of "local medical policy" by the various Intermediaries. As a result of the latitude given to the FI to determine "local policy", it is incumbent upon the provider to work closely with their particular Intermediary to insure compliance with the FI's guidelines and polices. Blue Cross of California's (BCC) philosophy has for many years been one of utilizing a "peer review" process for medical claim review. As a consequence of this approach, this particular FI has been relatively proactive in providing Medicare Providers with guidelines in BCC Medicare Bulletins, provider workshops, Local Medical Review Policies, and most recently videotape programs to educate Providers on BCC policy. This presentation will review the approach to Medicare claim review utilized by BCC. Although other FI's may have some variance in their polices, the general principles outlined should be of assistance in understanding the perspective of the Medicare "Payor" in the subacute setting.

Medicare claims are denied primarily for one of two reasons, these denials are classified as either "technical" or "medical necessity". The appeals of process available to a provider or beneficiary will depend on which of these types of denial has occurred. A "technical" denial is based on a claim that is submitted and for some reason can not be reviewed or paid for reasons not related to the medical necessity of the service. Examples would include claims that are missing requested documentation, incomplete orders (e.g., PRN oxygen without criteria), billing for services that are not a Medicare program benefit, or line-item billing for services that are considered part of "administrative costs". Many FI's will accept a resubmission of a claim that was denied for technical reasons and will process the claim as a "reopening". This "reopening" review is not mandated by HCFA, and is done as a courtesy to providers. As a result, these claims do not have a high priority and all current "live claims" are reviewed before "reopenings" are addressed. Hence, do not expect a rapid processing of "reopening" submissions.

A "medical necessity" denial is one based on a determination, from review of the submitted medical records, that the patient either did not need the service, or did not need the unique skills of the RCP to provide the service. This type of denial will be the primary focus of this presentation. The appeals process available to Providers is potentially a two step process. The initial appeal is referred to as a "reconsideration" review. This review consists of a "fresh look" at the submitted medical records by a different auditor, along with a review of the perspective of the Provider that should be outlined in a letter that accompanies the request for the reconsideration review. If the Provider is still not satisfied with the outcome of this review process, they may request a hearing before an Administrative Law Judge to have the merits of the claim reviewed. Advice will be provided on what BCC Respiratory Therapy Reviewers would expect to see in a properly filed "reconsideration" appeal letter that would assist the reviewer in making a determination to reverse the initial "medical necessity" denial.

AARC 50th Anniversary, December 6 - 9, 1997, New Orleans, Louisiana.

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