Medicare says ‘no.’ Now what?

It’s no secret: In order to stay in business, you must be paid for the services you provide.  That’s as true in physical therapy as it is in any other private practice endeavor. 

In most cases, the Centers for Medicare and Medicaid Services (CMS) pays claims. But  suppose for a moment that CMS denies your claim.  What will you do?

Would it surprise you to hear that most therapists don't know what they’d do?  If you’re among them, it’s time to sharpen your information skills.

Appealing Medicare denials is becoming more and more of a likelihood for all outpatient therapy providers , and it can be a daunting task rife with stress. However, most Fiscal Intermediaries (FIs) or Medicare Administrative Contractors (MACs) send specific guidance on information they need to see in a denial. As this information sometimes differs, we’ve included here some general information that may be helpful.

In some cases, denials may be due to incomplete billing, such as a claim lacking the modifier applied to the CPT code. Denials can also result from inadequate supporting documentation that has been submitted in response to an Additional Documentation Request (ADR).

 Audit contractors are instructed to deny services if they meet any of the following

  • The item or service does not fall into a Medicare benefit category.
  • The item or service is statutorily excluded.
  • The item or service is not reasonable and necessary.
  • The item or service does not meet other Medicare program requirements for payment.

Auditors must adhere to CMS-issued national coverage determinations (NCDs) and regional local coverage determinations (LCDs). In the absence of NCDs or LCDs, the contractors are responsible for determining whether services are reasonable and necessary, based on the following criteria:

  • It must be safe and effective.
  • It must not be experimental or investigational.
  • It must be furnished in accordance with accepted standards of practice for the diagnosis or treatment of the beneficiary's condition.
  • It must be provided in a setting appropriate to the beneficiary's medical needs and condition, and ordered and performed by qualified personnel.
  • It must meet, but not exceed, the beneficiary's medical need.

It’s not uncommon for denials to result from billing coding errors or claims that include diagnoses that fall outside the LCD. So let‘s say that, for whatever reason, your claim has been denied. Here’s what you should know to prepare an effective appeal:

  1. Medicare has a formal appeals process; your MAC will have interactive PDF forms and instructions to get you started.  Also check the CMS appeals website for complete rules and references.
  2. Recoupment (for post-payment review) will begin on the 41st day from the date of the demand letter if your MAC does not receive, by the 30th day from the date of the demand letter, either payment in full, a request for an extended repayment schedule, or a valid redetermination request.
  3. Organize all the documents and include a cover letter with a case executive summary (think of it as an excellent D/C report), a rebuttal of the denial as well as an index of documents.  Make an effort to put items into evidence as early as you can in the appeals process.
  4. In spite of  a 24-to-30-month delay on ALJ hearings right now, appeal your case if you have deemed it defensible.  CMS collects data on appeals, and when you win, you will get interest on your payment.

Auditors can review billing history obtained from Medicare databases,  any documentation submitted with the claim, or other documentation
subsequently submitted by the provider. Information submitted by the provider must corroborate the documentation in the beneficiary's medical record and confirm that Medicare coverage criteria have been met.

In general, your appeal letter should include:

  • Nursing notes that support the functional level of the patient and the ongoing need for therapy.
  • Physician skilled certifications (for Medicare Part A patients).
  • Documentation from other disciplines that may support cognitive/communicative difficulties experienced by thepatient.
  • Dietary consultations that may support the presence of swallowing disorders.
  • Hospital History and Physical to add medical diagnoses that serve as complexities to the case.

You should compile an expanded, detailed summary of progress from the start of care; it should include both objective data and other supporting information that may not have been contained in the original documentation. Write the appeal as an explanation of why the services were rendered, what could have happened if they weren't rendered, and what functional outcomes the patient achieved because of the services.

It is important to remember that the issuers of denials are not typically therapists. They are trained auditors who determined, for whatever reason, that the services rendered were not reasonable and/or medically necessary.  Your task is to persuade them differently!


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