Introduction

The intricate world of healthcare constantly introduces an array of challenges for medical professionals, practice managers, and practice owners. Among these complexities, one critical aspect that stands out is understanding and effectively handling the Centers for Medicare and Medicaid Services (CMS) audit appeals process. Mastery of this process is crucial, not only to ensure full compliance with regulatory requirements but also to safeguard your practice’s financial stability. This article aims to unpack the CMS audit appeals process, drawing particular attention to the importance of adhering to deadlines, discerning which issues are worth the fight, and pinpointing the right moment to involve legal counsel.

The CMS Audit Appeals Process

Initial Audit and Determination

The CMS audit process usually begins with a detailed audit conducted by Medicare’s administrative contractors (MACs). During these audits, MACs identify alleged overpayments and issue an initial determination letter notifying the provider of their findings.

The receipt of this letter marks the start of a critical timeline as CMS regulations for responding to this determination are stringent. Failure to respond in a timely manner will result in the dismissal of the appeal with no way of appealing the dismissal.

Rebuttal Stage

Should the initial determination seem flawed or inaccurate, the rebuttal stage offers you an opportunity to challenge the findings. This involves drafting a detailed rebuttal statement, which must be submitted within a 15-day window following receipt of the initial determination letter.

It’s important to note that a rebuttal is not a formal appeal; instead, it serves as a mechanism for providers to present additional information or documentation that could clarify potential misunderstandings or rectify any errors identified in the initial audit.

Redetermination

When a rebuttal does not lead to a satisfactory resolution, the redetermination appeal becomes your next course of action. This involves a more detailed review of the original decision by the MAC. The redetermination appeal needs to be filed within 120 days from the receipt of the initial determination letter.

This stage presents another chance to provide additional supporting evidence to justify your claims. It’s also an opportunity to challenge the validity of the initial determination based on a thorough analysis of the Medicare rules and regulations that apply to your case.

Reconsideration

Many times, the Redetermination appeal is unsuccessful because the same MAC that issued an overpayment demand will review the appeal.  This often leads to a “rubber stamping” of the prior decision.  The unfavorable decision correspondence is key, however, as it starts the clock on the next deadline to file the second level appeal, a reconsideration.

Reconsiderations must be filed within 180 days of receipt of the unfavorable decision.  This appeal goes before a Qualified Independent Contractor (“QIC”), who is hired by the CMS to independently review claims.  Although they frequently echo the MAC’s findings, there are times when they reverse the unfavorable findings, in part, or whole.

This appeal is critical and should not be filed without the assistance of healthcare counsel as it represents the last time you can offer new evidence into the record, including expert witnesses or additional documentation.  Any evidence not submitted with the QIC appeal will not be considered by an Administrative Law Judge if a third level appeal is necessary.

Administrative Law Judge (“ALJ”) Hearing

Upon receipt of an unfavorable QIC decision, a provider has only sixty (60) days from the date of the decision to file a Notice of Hearing requesting an ALJ Hearing on the issues.  ALJ hearings are conducted telephonically and require sworn testimony by the provider who rendered services, as well as any experts who submitted reports in support of the appeal.  Counsel is vital during these hearings as there are numerous procedural and evidentiary issues that must be discussed with the ALJ. 

Most important, however, is preparing for the ALJ hearing, which represents the first truly independent review of the case.  Competent healthcare counsel with experience at these hearings is invaluable and can prepare a provider for the likely questions they will face, as well as areas to focus on during testimony.

Medicare Appeals Council

In the event of an unfavorable ALJ decision, the fourth level appeal in the CMS appeals process is an appeal of the ALJ’s decision before the Medicare Appeals Council.  Like with ALJ hearings, there is a tight deadline to file the appeal, and it is limited in scope as the appeal must focus solely on specific issues the provider has with the ALJ’s findings.

Navigating Recoupments

A critical aspect of the CMS audit process is the recoupment procedure, wherein CMS may choose to recover the alleged overpayments by offsetting the disputed sum from your future Medicare payments. This practice can have significant financial implications for healthcare providers, particularly those with a substantial Medicare patient population.  Adding insult to injury, the CMS tacks on interest that is well-above prime.

However, there’s a small window of opportunity to avoid immediate recoupments. If you file a reconsideration appeal within 30 days of receiving the initial determination, CMS is mandated to pause recoupments until the conclusion of the redetermination process. However, if the appeal is not submitted within this timeframe, CMS is authorized to initiate recoupments on the 41st day.

Importance of Meeting Deadlines

One of the defining features of the CMS audit appeals process is its strict adherence to deadlines. Non-compliance with these timelines can result in the loss of appeal rights, including the automatic recoupment of the disputed funds by CMS. To prevent such adverse consequences, it is highly recommended that providers retain legal counsel, who have in place an efficient system to monitor all correspondences, key dates, and deadlines diligently.

When to Engage Legal Counsel

The decision of when to engage legal counsel can be subjective and depends on the complexity of the case, the potential financial implications, and the provider’s comfort level with navigating the appeals process. However, it is best to involve legal counsel right from the start of the audit process. Healthcare counsel can provide critical guidance during the initial review of the audit findings and the rebuttal process, assist in preparing a thorough appeal, and prepare for an ALJ hearing.

As a rule of thumb, as the appeal process advances, the need for legal counsel becomes more acute and a delay in retaining counsel could adversely impact the chances to overturn the CMS’ findings. While a healthcare attorney cannot argue as to medical necessity, legal counsel can help ensure that your appeal aligns with all procedural requirements and, most importantly, that your arguments are cogently presented.

Conclusion

The CMS audit appeals process is a complex maze, but with a clear understanding of the process, adherence to strict deadlines, and strategic engagement of legal counsel, you can successfully navigate through it.

How Frier Levitt Can Help

Frier Levitt has extensive experience successfully navigating through various audit appeals. Your practice or health system can benefit from our proficiency in addressing the complexities of CMS audit appeals and adhering to strict deadlines. Contact Frier Levitt today to speak with an attorney.