The Stages of a Traditional Medicare Appeal

I. Traditional Medicare Part A Appeals
   a. Hospital Appeals
   b. Skilled Nursing Facility (SNF) Appeal
   c. Home Health Care

II. Traditional Medicare Part B Appeals

I. Introduction: Traditional Medicare Part A Appeals

The Traditional Medicare Part A appeals process begins when a Medicare provider concludes that the care needed by a beneficiary would not be covered by Medicare. A provider might make a negative determination about Medicare coverage either prior to, or at the time of admission, or after admission, with respect to continuing services. If a provider believes that Medicare will not cover a service, it must notify the beneficiary about the provider’s belief that Medicare coverage is not available. ^[1]

A Medicare beneficiary who disagrees with a provider’s decision about Medicare coverage must have the provider submit a Medicare claim. If the claim is denied by the appropriate Medicare contractor, there are three levels of administrative appeal that can be pursued by the aggrieved beneficiary, followed by the option of filing a case in federal court. There are slight differences in the structure of the appeal process for hospital, skilled nursing facility, and home health care cases. The rules governing Medicare appeals must be closely followed.

a. Hospital Appeals:

i. The Notice: The hospital must give a notice called “Important Message to Medicare Beneficiaries” to the beneficiary upon admission. It contains basic information about Medicare coverage of hospital care and how to appeal a hospital discharge decision. The text of the Important Message may be found on Pages 7-8 of the Medicare Hospital Manual, Transmittal 801, (May 2, 2003). This Transmittal can be viewed at http://www.cms.hhs.gov/medicare/bni/R193FormInstruction.pdf.

1. When the hospital decides that the hospitalized beneficiary no longer meets the Medicare coverage criteria for a hospital stay, it informs the beneficiary that Medicare coverage for the hospital stay will cease.

ii. The first stage of a hospital appeal is Immediate Review: The beneficiary may appeal the hospital’s decision about Medicare coverage by requesting an Immediate Review. 

1. To request an Immediate Review, the Important Message to Medicare Beneficiaries instructs beneficiaries to call 1-800-Medicare for referral to the appropriate Quality Improvement Organization, (QIO).
   
   
2. The beneficiary must call the QIO to ask for Immediate Review no later than noon of day after hospital notification that Medicare coverage will cease.
   
   
3. The QIO obtains the pertinent hospital records, reviews them and makes a decision on continuing Medicare coverage for the beneficiary’s hospital stay by the day following the beneficiary’s request for Immediate Review.  
   
   a. The QIO decision must be in writing. 
   
   
4. If the QIO affirms the Medicare coverage termination, the beneficiary becomes personally liable for the cost of the care if she does not leave the hospital by noon of the day following receipt of the QIO adverse Immediate Review decision.

iii. The second stage of appeal is Reconsideration: A beneficiary who disagrees with the adverse Immediate Review decision may appeal by requesting Reconsideration. 

1. Reconsideration must be requested in writing and request forms are available on http://www.medicare.gov/Basics/forms/default.asp. 
   
   
2. Reconsideration must be requested within 120 days of receipt of the Immediate Review decision.  Reconsideration requests may be filed with the Social Security Administration or with the QIO.  
   
   
3. QIO staff who were not involved in the Immediate Review decision-making process review the medical records and issue a decision, called a Reconsideration Determination about continuing Medicare coverage for the beneficiary’s hospital stay.
   
   
4. The QIO renders the Reconsideration decision in writing and mails it to the beneficiary. There is a presumption that the decision is received no later than 5 days after it was mailed, absent proof to the contrary. [2]

iv. The third stage of appeal is an Administrative Law Judge Hearing, (ALJ Hearing) If the Reconsideration decision is adverse, the beneficiary may appeal by requesting an ALJ hearing.

1. The ALJ hearing must be requested within 60 days of receipt of an adverse Reconsideration decision.
   
   
2. The request must be made in writing and forms are available at www.medicare.gov/Basics/forms/default.asp. 
   
   
3. There must be at least $200 at issue in order to appeal a denial of Medicare coverage for a hospital stay to an ALJ hearing.
   
   
4. The ALJ holds a hearing at which the beneficiary is given an opportunity to offer testimony and other relevant evidence to establish that Medicare should have covered the hospital stay.  After the hearing, the ALJ issues a decision on Medicare coverage for the beneficiary’s hospitalization.
   
   
   a. The beneficiary can waive the right to a hearing.  In that case, the ALJ reviews all of the evidence in the appeal record and issues an “on-the-record” decision.
   
   
5. There are no deadlines in effect for issuance of ALJ decisions and beneficiaries often wait months to receive an ALJ decision.

v. The fourth stage of appeal is Departmental Appeal Board Review, (DAB): A beneficiary who is dissatisfied with an ALJ decision may appeal by filing for a DAB review.

1. This is the last administrative stage of a Medicare appeal.
   
   
2. DAB review must be requested in writing within 60 days after receipt of an adverse ALJ decision.  Forms to request a DAB review are available at http://www.medicare.gov/Basics/forms/default.asp. 
   
   
3. There must be $200 at issue to appeal a denial of Medicare coverage for a hospital stay to the DAB.  
   
   
4. The beneficiary or representative may submit a written memorandum explaining the case. The DAB does not hold in-person hearings.
   
   
5. The DAB renders a written decision about Medicare coverage for the beneficiary’s hospital stay and mails it to the beneficiary. There are no deadlines for issuance of a DAB decisions and beneficiaries often wait years to receive a DAB decision.
        

vi. Judicial Review

1. An adverse DAB decision may be appealed to federal court.
   
   
2. There must be at least $2,000 at issue in order to file suit in a hospital case in federal court.
   
   
3. The court papers must be filed within 60 days of receipt of the adverse DAB decision. 
   
   
4. While it is not necessary to retain a lawyer to file a federal court case and the court clerks are generally very helpful to unrepresented litigants, it is advisable to have legal representation in a court case.
   

b. Skilled Nursing Facility (SNF) Appeal

i. The SNF Notice: The SNF provides a written notice to the beneficiary, informing her that the SNF believes Medicare coverage will cease as of a specified date, which is usually the day following delivery of the notice.[3]  

1. The notice informs the Medicare beneficiary that if she disagrees with the SNF’s determination that Medicare coverage will cease, she must complete and return the form included with the notice to the SNF. 
   

By checking off the appropriate option, usually found on the back of the notice, the beneficiary informs the SNF that she wants the SNF to submit a claim to the Medicare fiscal intermediary for services provided after the date the notice indicates that Medicare coverage will cease. Click here to view sample SNF Medicare termination notices.

ii. The prerequisite for an appeal: The Demand Bill: The claim that is submitted to the Medicare fiscal intermediary is called a demand bill. 

1. Under Medicare rules, unless all of the following conditions are met, no Medicare appeal may be brought.   The beneficiary must:
   
   

   a. Remain in the SNF; and

   b. Continue to receive daily skilled services (and arrange to pay for them); and

   c. Ask the SNF to submit a demand bill.

2. If a beneficiary requests submission of a demand bill, the SNF must submit the claim.  A SNF that fails to submit a demand bill is not allowed to seek payment from the beneficiary.

iii. The Medicare Initial Determination: The Medicare fiscal intermediary reaches a decision on Medicare coverage and notifies the beneficiary by sending a Medicare Summary Notice, (MSN). To view Medicare Summary Notices and to obtain more information about these notices, go to: http://www.medicare.gov/Basics/SummaryNotice.asp.

1. If the fiscal intermediary affirms the Medicare coverage termination, the beneficiary becomes personally liable for the cost of the care as of the date the SNF informed the beneficiary that Medicare coverage would cease. The SNF is allowed to bill the beneficiary after the Initial Determination is received.

iv. The first stage of appeal is Reconsideration: A beneficiary who is dissatisfied with an Initial Determination may request Reconsideration in writing no later than 120 days after receipt of the adverse Initial Determination.

1. Reconsideration must be requested in writing and request forms are available on http://www.medicare.gov/Basics/forms/default.asp. 
   
   
2. Reconsideration must be requested within 120 days of receipt of the MSN notification of the fiscal intermediary’s Initial Determination. Reconsideration requests may be filed with the Social Security Administration or with the fiscal intermediary. 
   
   
3. The fiscal intermediary renders a Reconsideration decision in writing and mails it to the beneficiary.  There are no deadlines in effect for the issuance of Reconsideration decisions.

v. The second stage of appeal is an Administrative Law Judge Hearing, (ALJ Hearing): If the Reconsideration decision is adverse, the beneficiary may appeal by requesting an ALJ hearing.

1. The ALJ hearing must be requested within 60 days of receipt of an adverse Reconsideration decision.
   
   
2. The request must be made in writing and forms are available at http://www.medicare.gov/Basics/forms/default.asp. 
   
   
3. There must be at least $100 at issue in order to appeal a Medicare denial of SNF coverage to an ALJ.
   
   
4. The ALJ holds a hearing at which the beneficiary is given an opportunity to offer testimony and other relevant evidence to establish that Medicare should have covered the skilled nursing facility stay after the date on which the SNF notified the beneficiary that Medicare coverage would cease.  After the hearing, the ALJ issues a decision on Medicare coverage for the beneficiary’s hospitalization.
   
   

   a. The beneficiary can waive the right to a hearing.  In that case, the ALJ reviews all of the evidence in the appeal record and issues an “on-the-record” decision. 

5. There are no deadlines in effect for issuance of ALJ decisions and beneficiaries often wait months to receive an ALJ decision.

vi. The third stage of appeal is Departmental Appeal Board Review, (DAB):  A beneficiary who is dissatisfied by an ALJ decision may appeal by requesting a review by the Social Security Departmental Appeals Board (DAB).

1. This is the last administrative stage of a Medicare appeal.
   
   
2. DAB review must be requested in writing within 60 days after receipt of an adverse ALJ decision.  Forms to request a DAB review are available at http://www.medicare.gov/Basics/forms/default.asp. 
   
   
3. There must be $100 at issue to appeal a SNF case to the DAB.
   
   
4. The beneficiary or representative may submit a written memorandum explaining the case. The DAB does not hold in-person hearings.
   
   
5. The DAB reviews all of the evidence in the Medicare appeal record makes a decision about Medicare coverage for the beneficiary’s SNF care and mails it to the beneficiary. There are no deadlines for issuance of a DAB decisions and beneficiaries often wait years to receive a DAB decision.

vii.  Judicial Review

1. An adverse DAB decision may be appealed to federal court.
   
   
2. There must be at least $1,000 at issue in order to file suit on a SNF case in federal court.
   
   
3. The court papers must be filed within 60 days of receipt of the adverse DAB decision. 
   
   
4. While it is not necessary to retain a lawyer to file a federal court case and the court clerks are generally very helpful to unrepresented litigants, it is advisable to have legal representation in a court case.

c. Home Health Care

i. The Home Health Agency Notice: At least one day, or one visit prior to the discontinuance of Medicare coverage, the home health agency must generally give the patient a Home Health Advance Beneficiary Notice (HHABN).[4]

ii. The prerequisite for a Medicare appeal is a Demand Bill: The claim that is submitted to the Medicare fiscal intermediary is called a demand bill.

1. Under Medicare rules, unless all of the following conditions are met, no Medicare appeal may be brought. The beneficiary must:
   
   

   a. Continue to receive home health services that meet the Medicare coverage criteria (and arrange to pay for those services); and

   b. Ask the home health agency to submit a demand bill to the Regional Home Health Intermediary, (RHHI).

2. If a beneficiary requests submission of a demand bill, the home health agency must submit the claim to the RHHI. A home health agency that fails to submit a demand bill to the RHHIis not allowed to seek payment from the beneficiary.

iii. The Medicare Initial Determination: The RHHI makes a decision and transmits it to the beneficiary by issuing an MSN and mailing it to the beneficiary.

iv. The first stage of appeal is Reconsideration: If the beneficiary is dissatisfied with the Initial Determination, she may request Reconsideration.

1. Reconsideration must be requested in writing and request forms are available on http://www.medicare.gov/Basics/forms/default.asp. 
   
   
2. Reconsideration must be requested within 120 days of receipt of the MSN notification of the Initial Determination.  
   
   
3. Reconsideration requests may be filed with the Social Security Administration, or with the RHHI.
   
   
4. The fiscal intermediary renders a Reconsideration decision in writing and mails it to the beneficiary.  There are no deadlines in effect for the issuance of Reconsideration decisions.

v. The second stage of appeal is an Administrative Law Judge Hearing, (ALJ Hearing) If the Reconsideration decision is adverse, the beneficiary may appeal by requesting an ALJ hearing.

1. The ALJ hearing must be requested within 60 days of receipt of an adverse Reconsideration decision.
   
   
2. The request must be made in writing and forms are available at http://www.medicare.gov/Basics/forms/default.asp.  
   
   
3. There must be at least $100 at issue in order to appeal a Medicare denial of home health coverage to an Administrative Law Judge.
   
   
4. The ALJ holds a hearing at which the beneficiary is given an opportunity to offer testimony and other relevant evidence to establish that Medicare should have covered the home health care after the date on which the home health agency notified the beneficiary that Medicare coverage would cease.  After the hearing, the ALJ issues a decision on Medicare coverage for the beneficiary’s hospitalization.
   
   

   a. The beneficiary can waive the right to a hearing.  In that case, the ALJ reviews all of the evidence in the appeal record and issues an “on-the-record” decision. 

5. There are no deadlines in effect for issuance of ALJ decisions and beneficiaries often wait months to receive an ALJ decision.

vi. The third stage of a home health care appeal is Departmental Appeal Board Review, (DAB)

1. This is the last administrative stage of a Medicare appeal.
   
   
2. DAB review must be requested in writing within 60 days after receipt of an adverse ALJ decision.  Forms to request a DAB review are available at http://www.medicare.gov/Basics/forms/default.asp. 
   
   
3. There must be $100 at issue to appeal a home health case to the DAB.
   
   
4. The beneficiary or representative may submit a written memorandum explaining the case.  The DAB does not hold in-person hearings.
   
   
5. The DAB reviews all of the evidence in the Medicare appeal record makes a decision about Medicare coverage for the beneficiary’s home health care and mails it to the beneficiary.  There are no deadlines for issuance of a DAB decisions and beneficiaries often wait years to receive a DAB decision.
        

vii.   Judicial Review

1. An adverse DAB decision may be appealed to federal court.
   
   
2. There must be at least $1,000 at issue in order to file suit on a home health case in federal court.
   
   
3. The court papers must be filed within 60 days of receipt of the adverse DAB decision. 
   
   
4. While it is not necessary to retain a lawyer to file a federal court case and the court clerks are generally very helpful to unrepresented litigants, it is advisable to have legal representation in a court case.

II. Introduction:  Traditional Medicare Part B Appeals

In Medicare Part B, the provider always submits the Medicare claim to the Medicare carrier. The Medicare Carrier issues its initial determination in a notice to the beneficiary after which an aggrieved beneficiary may pursue three levels of administrative review, followed by the possibility of filing a federal court case. The rules governing the time lines for submission of appeals and the amount of money that must be at issue must be closely followed.

a. The Medicare Part B Claim: The Medicare Part B provider submits the Medicare claim to the carrier.

b. The Initial Determination: The carrier makes a decision on Medicare coverage, called an Initial Determination. The Medicare carrier sends the Initial Determination to the beneficiary by issuing an MSN or an Explanation of Medicare Benefits, (EOMB). To view MSNs and to obtain more information about these notices, you may go to http://www.medicare.gov/Basics/SummaryNotice.asp.

c. The first stage of appeal is a Review: An adverse initial determination is appealed by requesting a review by the carrier.

i. A request for review must be made in writing and forms for this purpose may be found on http://www.medicare.gov/Basics/forms/default.asp. 

ii. The review request must be filed with the carrier by 120 days after receipt of the MSN or EOMB. There is a 5 day presumption for receipt after the date on which the carrier mailed the MSN or EOMB to the beneficiary.

d. The second stage of appeal is a Carrier Hearing: If the review decision is adverse, the beneficiary may appeal by requesting a Carrier Hearing.

i. The Carrier Hearing must be requested within 180 days of receipt of the adverse review decision.

ii. There must be $100 at issue to take an appeal to a Carrier Hearing.

iii. The Carrier Hearing must be requested in writing and forms for requesting a Carrier Hearing may be found on http://www.medicare.gov/Basics/forms/default.asp. 

e. The third stage of appeal is an Administrative Law Judge Hearing, (ALJ Hearing): If the Reconsideration decision is   adverse, the beneficiary may appeal by requesting an ALJ hearing.

i. The ALJ hearing must be requested within 60 days of receipt of an adverse Reconsideration decision.

ii. The request must be made in writing and forms are available at http://www.medicare.gov/Basics/forms/default.asp.

iii. There must be at least $100 at issue in order to appeal a Medicare Part B coverage denial to an Administrative Law Judge.

iv. The ALJ holds a hearing at which the beneficiary is given an opportunity to offer testimony and other relevant evidence to establish that Medicare should have covered the home health care after the date on which the home health agency notified the beneficiary that Medicare coverage would cease. After the hearing, the ALJ issues a decision on Medicare coverage for the beneficiary’s hospitalization.

a. The beneficiary can waive the right to a hearing. In that case, the ALJ reviews all of the evidence in the appeal record and issues an “on-the-record” decision. 

v. There are no deadlines in effect for issuance of ALJ decisions and beneficiaries often wait months to receive an ALJ decision

f. The fourth stage of appeal is Departmental Appeal Board Review, (DAB): This is the last administrative stage of a Medicare appeal.

i. DAB review must be requested in writing within 60 days after receipt of an adverse ALJ decision. Forms to request a DAB review are available at http://www.medicare.gov/.

ii. There must be $ 100 at issue to appeal a case to the DAB.  

iii. The beneficiary or representative may submit a written memorandum explaining the case.  The DAB does not hold in-person hearings.

iv. The DAB reviews all of the evidence in the Medicare appeal record makes a decision about Medicare Part B coverage for the beneficiary’s care and mails it to the beneficiary. There are no deadlines for issuance of a DAB decisions and beneficiaries often wait years to receive a DAB decision.
     

g. Judicial Review:

i. An adverse DAB decision may be appealed to federal court.

ii. There must be at least $1,000 at issue in order to file suit in federal court.

iii. The court papers must be filed within 60 days of receipt of the adverse DAB decision.

iv. While it is not necessary to retain a lawyer to file a federal court case and the court clerks are generally very helpful to unrepresented litigants, it is advisable to have legal representation in a court case.

III. National Coverage Determinations (NCDs), Local Coverage Determinations, (LCDs) and Local Medical Review Policy (LMRP).

The processes for appealing National Coverage Determinations, Local Coverage Determinations and Local Medical review Policies are addressed in a Health Assistance Partnership Issue Brief that will be published soon and posted on the Health Assistance Partnership, at http://www.healthassistancepartnership.org/.

IV. The Medicare and SCHIP Beneficiary Improvement and Protection Act of 2000 (BIPA)

In 2000, Congress substantially revised the Traditional Medicare appeals process. Congress wanted to make the process easier for Medicare beneficiaries to understand and to use. Congress imposed deadlines for Medicare contractors to render decisions on Medicare appeals and provided a process for expedited appeals of certain Medicare decisions in situations in which beneficiaries needed quick decisions about Medicare coverage. Most of these innovations have yet to be implemented and the process described above reflects the current structure of Traditional Medicare appeals.

V. The Medicare Prescription Drug Improvement and Modernization Act of 2003 (HR 1)

The Medicare prescription drug bill that Congress passed was signed into law by the President on December 8, 2003. The new law can be found on the House Ways and Means Committee Web site under “What’s New?” or at http://waysandmeans.house.gov/Special.asp?section=43

The bill contains changes to certain aspects of the Medicare appeals process. Many of the changes relate to provider appeals. The changes that will affect Medicare beneficiaries are as follows:

a. Medicare notices to beneficiaries about claims and appeals decisions must be clearly written in understandable language. Notices must explain pertinent matters, such as the reason for the denial of coverage, including whether a Local Medical Review Policy was used in reaching a claims decision. MSNs  must also summarize the medical evidence considered in making the decision and how to appeal the decision. Congress made these provisions effective on October 1, 2004.  (Section 933)

b. A prior determination process: A process will be established by July, 2005, to allow a physician or a beneficiary to ask a Medicare fiscal intermediary or carrier for a decision about Medicare coverage of the physician’s service before the service has been provided. A beneficiary must be informed if her physician requests a prior determination of Medicare coverage. Prior determinations will not be not subject to a right of appeal. A beneficiary who disagrees with a prior determination that a service is not covered by Medicare will have to obtain the service and then appeal the Initial Determination that will be issued denying the claim. (Section 938)

c. Jurisdictional Amounts: Starting in 2005, the amount in controversy required to reach the Administrative Law Judge stage of a Medicare appeal will increase, as it will be indexed to the medical inflation rate. (Section 940)

d. Timelines for Medicare Appeals: Congress lengthened the deadlines it imposed upon Medicare contractors, QIOs, ALJs and the DAB in the Medicare and Medicaid Beneficiary Improvement and Protection Act of 2000, (BIPA), for making decisions regarding Medicare claims and appeals in the Medicare and Medicaid Beneficiary Improvement and Protection Act of 2000 (“BIPA”). However, CMS has not yet implanted the BIPA timeframes and Congress did not include in the Medicare prescription drug bill a mandate or timeline for CMS to implement the BIPA appeals provisions.
 

11/20/03
Rev’d 12/15/03