You will also find a helpful timeline of the Medicare Appeals process at the end of the article.
Occasionally I will consult with attorneys and paralegals who refer to Medicare liens as “simple.”
While I will admit that interacting with the Medicare contractor has become more efficient, I believe that the same traps and roadblocks are present within Medicare’s system that have always been there. And in many instances, appeals to remove claims from Medicare’s lien have become more challenging.
For instance, when addressing bundled charges within Medicare’s lien, gone are the days of providing a “simple” cover letter, paired with Medicare’s lien itemization highlighting claims for removal.
This article addresses these types of claims and relays Precision Resolution’s approach to these types of appeals.
In 2019, when I first transitioned from working as a plaintiff’s personal injury paralegal to a case manager with Precision Resolution, Medicare would be more willing to remove a hospital’s facility charge if the primary diagnosis code was not related to the case. These types of claims are referred to as bundled charges.
However, over the past few years, Medicare has become increasingly unwilling to remove these types of claims [in the initial dispute]. I sympathize with attorneys and paralegals who also recall those days and are confused as to why Medicare is holding ground and refusing to remove conditional payments on the basis that the primary diagnosis code is not related to the injuries in the case.
What are Bundled Charges?
Medicare links Part A facility (e.g., hospital, skilled nursing, hospice, home health care) payments using the Bundled Payments for Care Improvement (BPCI) Initiative[CL1] . The Centers for Medicare and Medicaid Services describes this as a “payment [that] rewards the quantity [emphasis added] of services offered by providers rather than the quality of care furnished.”
Additionally, Medicare, like many health insurers, use the Diagnosis Related Groups (“MS-DRGs” or “DRG”) which is based on the acute condition, the primary procedure or treatment required, the complexity of the primary procedure, and any complications or comorbidities that may affect patient care. Medicare’s payment amount for the medical services rendered is based on how the patient’s care affected the hospital/facility’s resource consumption (a combination of the DRG services, comorbidities, number of inpatient bed days, medical items, supplies, labs, radiology, and other services) in cases where the patient was admitted to the facility for inpatient care with uninterrupted stays. This is all bundled under one lump sum rather than a fee-for-service model.
How do Bundled Payments Impact Conditional Payment Amounts?
Oftentimes the bundled diagnosis codes that appear on the plaintiff’s Conditional Payment Summary are overinclusive. They consist of several medical diagnoses that are not related to the liability injury that is the subject of the case. Medicare deems the entire bundled claim as related and demands reimbursement for the entire payment.
Common Example of Bundled Payments
Let’s say your plaintiff goes to the hospital to undergo elective bariatric surgery. The plaintiff suffers a post-surgical complication of a bowel obstruction due to an internal hernia that goes unnoticed and, therefore, untreated; this is the basis of the medical malpractice liability claim.
After a day or two, the plaintiff’s obstruction is finally diagnosed and treated, and your plaintiff recovers. However, after the injury condition is resolved, your plaintiff is unexpectedly plagued with a prolonged hospital course due to other comorbidities resulting in a hospital stay that went from an anticipated 7 days to 17 weeks.
Your plaintiff’s liability claim is limited to the date of onset of the obstruction symptoms until they are fully resolved. Let’s say, for the sake of this example, only 2 weeks out of the 17 weeks is related to the medical malpractice case, but the additional 15 weeks of in-facility care were related to your client’s comorbidities.
Medicare, in turn, considers themselves a secondary payor for the entire hospital admission payment and will include it on their lien amount for reimbursement, because there is at least some related treatment – bundled charges – included during the course of the hospital stay.
This issue has frustrated many plaintiffs and their attorneys because it is wholly unfair and unjust to reimburse Medicare for the entirety of the costs of medical treatment that the plaintiff did not receive compensation for in the settlement.
My colleagues and I at Precision Resolution are often brought in on cases to determine if we can help when a plaintiff’s attorney – who by far knows the details of the case better than Medicare – is unable to convince Medicare to remove the bundled charge. When we determine that we can take over the file and have formed a viable basis for an appeal, our arguments must be comprehensive in nature. We treat the supporting evidence to our arguments as if it were being reviewed by an Administrative Law Judge (ALJ). While we aim to resolve the matter through Medicare’s appeals process, before an ALJ hearing, sometimes these hearings are necessary to secure a successful result for the plaintiff.
Success in the Medicare appeals process is extraordinarily difficult. However, my colleagues and I at Precision Resolution have the benefit of drafting and reading so many appeals and decisions over the past 12 years that we have learned what is required – what threshold must be met – to have a chance of success.
Based on recent experience with Medicare’s appeals process, it seems as though Medicare’s default position is that they include “related” charges for inclusion in the Conditional Payment Amount based on two main points:
1) the diagnosis code on the disputed claims matches the reported diagnosis code for the date of incident, and
2) the date of service is on or near the date of incident.
In other words, so long as the facility charge is near the date of incident and/or so long as there is at least one diagnosis code in the bundle is related to the injuries in the case, the entire charge remains attached to their reimbursement demand.
As one appellant described in a recent case, these points can be extremely frustrating because the burden should be placed on Medicare to prove what of the bundled payment should be reimbursable when the entirety of the bundled conditions and treatment are clearly not related to the case.
Despite agreeing that Medicare’s bundled conditional payments include obviously unrelated medical treatment, a decision from an Administrative Law Judge with the Office of Medicare Hearing and Appeals (OMHA) held that it is the beneficiary’s burdento establish what of that bundle is reimbursable.
I, along with our team at Precision Resolution, perform these bundle analysis and challenges often. Therefore, when I am reviewing a Medicare Demand for an appeal assessment, I am mentally preparing our case for the higher levels of appeal if needed.
Recent Succes
My recent success comes from the second level of appeal resulting in a successful reduction of the Medicare lien by $133,642.25. Over $100,000 of this reduction is attributed to one hospital charge with multiple related diagnosis codes in the bundle.
I addressed those facts head-on, and Medicare returned the favorable decision.
Helpful Info:
Levels of Medicare Appeals and Timeframes
There are 5 levels of the Medicare Appeals process, with the first 3 levels being the most viable at receiving a favorable outcome. However, each of the first three levels is also extraordinarily difficult. It can take up to 1 year and 5 months just to go through the first three levels based on the submission windows and decision timeframes.
·Level 1: The first level of appeal is a Redetermination. Appellants have 120 days to submit the Level 1 appeal to the BCRC, the current Medicare Administrative Contractor (“MAC”) responsible for contemplating the redetermination. The BCRC has 60 days from receipt of the appeal to issue a Redetermination decision.
·Level 2: The second level of appeal is a Reconsideration. Appellants have 180 days from receipt of the Level 1 Redetermination date to submit the Level 2 appeal with the Qualified Independent Contractor (“QIC”). The QIC has 60 days from receipt of the appeal to issue a Reconsideration decision.
· Level 3: The third level of appeal is an Administrative Law Judge Hearing by the Office of Medicare Hearings and Appeals (“OMHA”). Appellants have 60 days from receipt of the Level 2 Reconsideration date to submit the Level 3 appeal. The ALJ has 90 days to issue a Notice of Decision.
·Level 4: The fourth level of appeal is a Medicare Appeals Council Review. This is the final administrative review of the ALJ Notice of Decision. The Medicare Appeals Council is composed of Administrative Appeals Judges within the HHS Departmental Appeals Board (“DAB”). Appellants have 60 days from receipt of the Level 3 Notice of Decision to submit the Level 4 appeal. The Council is supposed to render the final decision 90 days from the receipt of the appeal, however, due to a backlog over the past several years, decisions are delayed.
·Level 5: The fifth and final level of appeal is a Judicial Review in U.S. District Court. Appellants have 60 days to file an action following receipt of the level 4 decision. There is no timeframe for the judicial review decision.