Salvage denied claims with Medicare + Choice appeal.

ALTHOUGH THERE IS NO UNIFORM NATIONAL APPEAL PROCESS in place for managed care plans outside of Medicare, there is and has been for more than 10 years an appeal process that provides dissatisfied Medicare beneficiaries enrolled in Medicare + Choice Organizations (M+COs), including HMOs and PPOs, with recourse for denials of access to care or reimbursement for services already rendered. The appeal process is easy, user-friendly, and does not require use of an attorney.

Benefit disputes are addressed first at the M+CO level. If an M+CO makes a determination that is unfavorable in whole or in part, regarding a request for services or payment of a claim, the beneficiary may request an appeal from the M+CO. There are no strict technicalities as to the form of the request for an appeal. A simple letter is sufficient.

If the M+CO completely reverses its determination, the appeal is complete, the beneficiary or provider is notified, and the claim is paid or the service is authorized. If the M+CO does not render a finding wholly favorable to the appealing party, the M+CO is obligated to refer the case to HCFA for an independent and impartial review by an external review agent.

Like beneficiaries, most providers recognize the frustration in having an M+CO deny payment for services rendered. While the appeals process has been used primarily by beneficiaries, it is equally accessible for use by physicians, providers, and suppliers who are not contracted with the M+CO (collectively referred to as "Non-Plan Providers"). Providers may be able to get many denied claims paid if they use the appeal process. A Non-Plan Provider can request an appeal if it obtains an appointment of representative form from the beneficiary or executes a waiver of payment form. The appointment of representative form must be signed by the beneficiary or his legal representative indicating that the beneficiary has appointed the Non-Plan Provider as a legal representative for purposes of presenting an appeal (see Sample Form on next page).

If the beneficiary refuses to appoint the Non-Plan Provider as a representative, the provider can appeal in its own right if it signs a waiver of payment form. This form is a statement signed by the Non-Plan Provider indicating that the Provider agrees to waive the right to seek payment from the beneficiary in exchange for the right to use the appeal process. If a Non-Plan Provider signs a waiver of payment form, it does not have the right to look to the beneficiary for payment if the external appeal agent decides the case in favor of the M+CO. However, if the Non-Plan provider appeals as the beneficiary's representative and loses the appeal, it can still try to collect from the beneficiary. Obviously, it is in the best interests of the Non-Plan Provider to obtain an appointment of representative form since the Provider does not give up any right to pursue the beneficiary for payment of the claim if the external appeal agent upholds the M+CO's denial of coverage. Once the beneficiary signs the form appointin g the provider as his representative, the provider then only has to submit the form (or the waiver of payment form) to the M+CO together with a simple letter requesting an appeal, and any supporting documentation, such as the beneficiary's medical records. There are no hearings.

For Non-Plan Providers to maximize collection of M+CO denied claims, they must understand what benefits are covered by Medicare as tailored by the principles of managed care. M+COs must provide coverage of all services covered by Parts A and B of fee-for-service Medicare that are available to beneficiaries residing in the geographic area of the M+CO and all Part A and Part B services obtained outside the geographic area if it is common practice to refer patients outside that geographic area.

It is significant that a large number of overturns of M+CO denials involve long term care, particularly if rendered in SNFs and by home health agencies. These overturns primarily focus on two issues: preparation and delivery of the notice of non-coverage (NONC), and reasons for denial of skilled services.

* NONC. The first item a provider should scrutinize in any SNF case is the NONC delivered to the beneficiary (assuming one was delivered) to determine if it meets the requirements of HCFA's Manuals. If a Plan Physician admits a beneficiary to a SNF and certifies that the beneficiary did require a skilled level of care, the M+CO must cover those services, if an M+CO denies admission to a SNF, or determines that coverage is no longer required because the beneficiary no longer meets skilled guidelines, the M+CO must notify the beneficiary in writing at or before the time of denial. If the M+CO fails to give the beneficiary proper notice in the form of an NONC, the beneficiary is protected from liability until he receives the notice.

* The 'why.' The NONC must specify the reason why the beneficiary does not meet SNF coverage guidelines; any financial liability that is shifted to the beneficiary and the effective date; specify what alternative services are covered; and procedures for the beneficiary to appeal the determination including expedited appeal rights.

If the NONC is adequate on its face, the Non-Plan Provider should look to see whether the M+CO can prove that the beneficiary actually received it. If the M+CO cannot provide proof of receipt of the NONC, it may be liable to cover the beneficiary's stay, even if only custodial services are involved.

It is important to emphasize that it is not enough for an M+CO to leave the NONC at the desk of the SNF. Ideally, the NONC should be hand-delivered to the beneficiary with the beneficiary signing the NONC as proof of receipt. If the beneficiary refuses to sign, there should be a contemporaneous annotation in the SNF's medical records regarding delivery of the NONC and the beneficiary's refusal to sign.

Under the provisions of HCFA's regulations and Manuals, the M+CO may delegate the determination of continued eligibility for coverage and discharge planning to the SNF. However, the actual written notification to the patient regarding any change in coverage is the responsibility of the M+CO.

If the M+CO can prove that an adequate NONC was delivered, it still must prove that skilled services were not rendered to substantiate its denial of coverage for services rendered or to be rendered in the future. An M+CO cannot simply say that a beneficiary has no skilled needs. Furthermore, the restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.

In the home health context (unlike in SNFs), it is important to remember that custodial care is a Medicare-covered benefit if the beneficiary has intermittent skilled needs. Many M+COs make blanket denials of custodial care that should be challenged. CLTC 

Judith Feldt is an experienced health care attorney who specializes in Medicare reimbursement and managed care. She has lectured extensively on the Medicare+ Choice appeals process and currently practices with the Washington, DC office of Vinson & Elkins.