Learn How To Appeal Denial Of Medicare Coverage
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Elder Care Attorney
You depend on Medicare Parts A & B to cover most of your medical expenses including hospital, skilled nursing, home health services, physician fees, medical tests, medical supplies, etc. Generally all goes well and payment to providers is made (I concede the paperwork is a pain). But sometimes Medicare denies a claim and refuses to pay. And if that refusal is for a large expense (i.e. hospital, skilled nursing facility, specialty drug), the economic costs and consequences to you can be devastating. Because our firm represents families denied Medicare coverage for hospital and skilled nursing care following a hospitalization, I thought it would be a public service to devote a page of this site to explaining the Medicare appeal process when claims are denied. However, understand this point. The appeal process is tedious, multi-level, and time consuming. We know…we’ve been there. Good luck with your appeal and remember we’re here for you if it’s too much for you to handle. You can reach me toll-free at (855) 376-5291 or email me at email@example.com.
The Medicare Appeals Process
There are times where Medicare will issue an unfavorable decision. Whether it’s classifying you as a patient undergoing observation in a hospital instead of being in-patient or terminating rehabilitation services because you’re health is not improving, the decision will be financially damaging and your care placed at risk. But Medicare’s decision is not final. If handled properly, you can appeal this unfavorable decision.
The Stages of A Medicare Appeal
The first two stages are informal and usually occur hand-in-hand with one another.
Most people are not aware that Medicare contracts with third-party companies called Medicare Administrative Contractors and Quality Improvement Contractors, or “MACs” and “QIOs” respectively, who review appeals of unfavorable decisions by Medicare to determine if they were made accurately. Often times, they will side with Medicare’s decision. In these early appeals you do not get a chance to argue your case if you need to explain something about your case, although they do allow you to supplement the records they receive from the hospital with additional records. The first stage of appeal is called the “redetermination” stage, where a MAC reviews the records with an independent physician and determines if the action taken was appropriate. You get 125 days from the date listed on the unfavorable notice (120 days plus 5 since Medicare presumes you receive a mailed notice 5 calendar days after the date it was written, although this presumption is rebuttable). Should the decision taken be unfavorable to you, you can then request “reconsideration” by a “QIC” within 185 days of the date of the notice of an unfavorable reconsideration decision. Here, another independent physician reviews the matter and determines if the unfavorable reconsideration decision was appropriate.
Given the limited medical information in front of them, and absent any expert report(s) or testimony by the patient, family, or interested person(s) stating why your appeal should be decided favorably, it is unlikely your matter will be given favorable treatment by the QIC or MAC. But here again the appeal process does not end there. The next step is requesting a fair hearing within 65 days of the date of denial of the reconsideration in front of an administrative law judge who works directly for the Department of Health and Human Services in the Office of Medicare Hearings and Appeals. Here, you appear via telephone conference (or video conference if it is determined to be appropriate) before an administrative law judge to argue why you should be entitled to a favorable Medicare decision. You can ask the judge to admit into evidence your medical records, any expert reports you may have, and anything you may want to supplement the medical record with as to why the unfavorable decision should be revised. The judge takes testimony on the date of the hearing and then issues a written opinion within 90 days of the hearing date based on everything in front of him/her. It should be noted that the bill for services, minus any co-payment, must be above $400 for a hearing to occur. This sounds trivial, but if supplemental insurance picks up the tap and leaves you with an amount due of less than $400, your appeal will (likely) be dismissed.
Should the administrative law judge not rule in your favor, the appeal process still does not end there. You have 65 days from the date of the ALJ decision to appeal to another MAC-The Medicare Appeals Council. You can argue why the ALJ incorrectly decided the case and ask for a more favorable ruling. The Council reviews the decision and then issues its own decision. Note that any new evidence made available for this appeal, such as a worsening of a condition or an expert opinion that opines observation status was inappropriate, is allowed to be submitted. Depending upon the outcome of this stage of appeal, your final recourse is to file an action in federal district court within 65 days of the date of the Council’s decision.
The Take Away
There are multiple layers to the appeal process, and it can get complicated. It is why you need an experienced Medicare appeals attorney guiding you through this process. The most important thing for you to remember are to watch your deadlines, and note every date that you receive a notice from Medicare denying your payment for a claim, as that 5 calendar day receipt period can be enlarged if you can show the noticed was received after that period.
Medicare and Hospital Coverage: Observation Versus Inpatient Status
One thing a Medicare beneficiary will (at some time(s) in their life) experience is a hospitalization. They must be sure they have not been the victim of an improper admission classification by a doctor. It is important because even though a hospital visit may be covered under Medicare, how it is classified will determine any subsequent benefits the patient may receive, including, but not limited to, care received in a skilled nursing facility. So if you get nothing out of this discussion, always remember to “Be Aware of Your Care!” You pocketbook, and your family, will thank you for it.
Emergency Hospitalization & Medicare Coverage
So what happens when you are hospitalized in an emergency setting? The attending physician will read the reports of the nurses on staff, along with any emergency personnel who attend to you, and decide how to proceed with your care. If he or she believes inpatient admission is necessary, they will sign an order admitting you into the hospital as an inpatient. If not, they will classify you as an outpatient or on “observation status”. How is the decision made? Well Medicare has a rule of thumb under its regulations to guide physicians on what is an appropriate classification. It is called the “two-midnight” rule. It states that if the physician forms a medical opinion that your care will require a stay at the hospital that crosses two midnights, or in other words, requires you to stay overnight at the hospital for two nights, an inpatient admission order is appropriate. However, the regulations do not say that if your care does cross two midnights that you are automatically admitted as inpatient. It simply is guidance for a physician when making that determination, and the regulations allow the physician to use other medical factors such as your medical history, the severity of the situation, and the risk for further damage to guide his or her decision in admitting you as an inpatient versus classification as an outpatient in observation status.
So why is this important? If you are admitted as an inpatient, your care is billed under Medicare Part A, which pays for the visit minus a deductible. If you are admitted as an outpatient in observation status, your care is billed under Medicare Part B (assuming you pay for it), which pays for the visit minus a co-payment and a percentage of the costs incurred (although if you have supplemental insurance this cost will likely be picked up for you). But the key to the distinction lies not in which part of Medicare pays your bill(s), but to determine if you are covered for the time to be spent at a skilled nursing facility, which is often the next place a person visits after a hospitalization. You are allowed a benefit period of 100 days in a skilled nursing facility under Medicare should you need to enter one. But you do not have access to this benefit if you are hospitalized as a patient “in observation” status. You must have had a three-day inpatient hospitalization prior to entering a skilled nursing facility to qualify for the 100 day Medicare coverage benefit. These three days of hospital care commences from the date the physician signs the inpatient admission order, and does not include the day you are discharged from the hospital.
It is the exorbitant cost of a stay in a skilled nursing facility that is triggering Medicare to watch the hospital to ensure that patients are being admitted properly. Sometimes, a hospital, out of fear of an incorrect classification (and therefore no payment from Medicare), will reverse a physician’s inpatient admission decision and reclassify the person as an outpatient in observation status. This is why it is so important to know the admission classification. If you or your loved one is classified in observation status, but know that a rehabilitation facility is in your future, you must ask the attending physician if you can be reclassified as an inpatient, and if not, what options you have to get coverage for a stay at a rehabilitation facility. As a side note Medicare requires hospitals to inform their patients on whether they have been placed in observation status and to sign a notice of disclosures stating such. Called the Medicare Outpatient Observation Notice (MOON), it states that you are in observation, why you are not inpatient, that your stay will be covered under Medicare Part B, any out-of-pocket costs you may incur during your stay at the hospital, and that any stay at a skilled nursing facility will not be covered under Medicare. If you do not receive this notice, find out why you did not get one. If you do not recall signing one, ask when the notice was signed and what condition you were in when you signed the notice. You must be alert and oriented when signing the MOON. In a similar fashion, a skilled nursing facility must alert you when you will be private paying for a facility and not receiving coverage for it under Medicare.
It is critical to be aware of your care, as the financial consequences can be severe. If you or a loved one need assistance fighting an observation status classification or are unsure of how to deal with the hospital and Medicare moving forward, you need an experience Medicare appeal attorney on your side, and we are here to help you.
Call Fredrick P. Niemann toll-free at (855) 376-5291 or email him at firstname.lastname@example.org.
He welcomes your calls and inquiries and you’ll find him easy to talk to about your most sensitive concerns.
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