Appeals Process
A. Background
A provider or supplier whose Medicare enrollment is denied or whose Medicare billing privileges are revoked may request an appeal of that determination. Change of information request denials, reassignment denials, and effective date determinations for initial enrollments may also be appealed. This appeal process applies to all providers and suppliers - not merely those defined in 42 CFR Part 498 - and ensures that all applicants receive a fair and full opportunity to be heard.
With the implementation of the appeals provision of Section 936 of the Medicare Prescription Drug Modernization and Improvement Act (MMA), all providers and suppliers that wish to appeal will be given the opportunity to request an appeal of a reconsideration decision to an administrative law judge (ALJ) of the Department of Health and Human Services (DHHS). Providers and suppliers may thereafter seek review by the Departmental Appeals Board (DAB) and may then request judicial review.
B. Notification Letters for Denials and Revocations
If a Medicare contractor finds a legal basis for denying an application - and, if applicable under section 15.8.4 of this chapter, receives approval from the Provider Enrollment & Oversight Group (PEOG) for said denial - the contractor shall deny the application and notify the provider or supplier by letter. The denial letter shall contain:
• A legal (i.e., regulatory) basis for each reason for the denial;
• A clear explanation of why the application is being denied, including the facts or evidence that the contractor used in making its determination;
• An explanation of why the provider or supplier does not meet the applicable enrollment criteria;
• Procedures for submitting a corrective action plan (CAP); and
• Complete and accurate information about the provider or supplier’s further appeal rights. Similarly, when a Medicare contractor discovers a basis for revoking a provider or supplier’s enrollment - and, if applicable under section 15.27.2 of this chapter, receives approval from PEOG for the revocation - the contractor shall revoke billing privileges and notify the provider or supplier by letter.
The revocation letter shall contain:
• A legal (i.e., regulatory) basis for each reason for revocation;
• A clear explanation of why Medicare billing privileges are being revoked, including the facts or evidence that the contractor used in making its determination;
• An explanation of why the provider or supplier does not meet the applicable enrollment criteria;
• The effective date of the revocation (see section 15.27.2(C) of this chapter for more information);
• Procedures for submitting a CAP; and
• Complete and accurate information about the provider or supplier’s further appeal rights.
Appeals Involving Non-Certified Suppliers
Sections 15.25.1.1 through 15.25.1.3 below apply to:
• Individuals and solely-owned entities completing the Form CMS-855I
• Suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS)
• Suppliers completing the Form CMS-855B, with the exception of ambulatory surgical centers and portable x-ray suppliers .
Corrective Action Plans (CAPs)
A. Requirements and Submission of CAPs
The CAP process gives a supplier an opportunity to correct the deficiencies (if possible) that resulted in the denial of its application or the revocation of its billing privileges.
The CAP must:
(1) Contain, at a minimum, verifiable evidence that the supplier is in compliance with Medicare requirements;
(2) Be submitted within 30 days from the date of the denial or revocation notice;
(3) Be submitted in the form of a letter that is signed and dated by the individual supplier, the authorized or delegated official, or a legal representative;
(4) For revocations, be based on §424.535(a)(1). Consistent with § 405.809, CAPs for revocations based on grounds other than §424.535(a)(1) shall not be accepted. (For revocations based on multiple grounds of which one is §424.535(a)(1), the CAP may be accepted with respect to (a)(1) but not with respect to the other grounds.)
If the supplier submits a CAP that does not comply with this paragraph, the contractor shall notify the supplier via letter or e-mail that it cannot be considered. (If multiple grounds are involved of which one is (a)(1), the contractor shall:
• Only consider the portion of the CAP pertaining to (a)(1), and
• Notify the supplier in its decision letter (or, if the contractor wishes, via letter or e-mail prior to issuing the decision letter) that under §405.809, the CAP was/will be reviewed only with respect to the (a)(1) revocation reason.)
The contractor may create a standard CAP form to be sent with the denial or revocation letter to easily identify it as a CAP when it is returned. The contractor may also accept CAPs via fax or e-mail.
If the submitted CAP does not comply with (1) or (3) above:
• Denials - The contractor need not contact the supplier for the missing information or documentation. It can simply deny the CAP.
• Revocations – The contractor shall not contact the supplier for the missing information or documentation. It shall simply deny the CAP. (Under §405.809(a)(2), the supplier has onl y one opportuni ty to correct al l def i ci enci es that served as the basi s of i ts revocati on through a CAP.)
The contractor may make a good cause determination so as to accept any CAP that has been submitted beyond the 30-day filing period. The supplier’s contact person (as listed in section 13 of the Form CMS-855) does not qualify as a “legal representative” for purposes of signing a CAP. B. Processing and Approval of CAPs
The contractor shall process a CAP within 60 days of receipt. During this period, the contractor shall not toll the filing requirements associated with a reconsideration request. The CAP shall be considered and processed by a contractor staff person who (1) was not involved in the initial decision to deny or revoke enrollment, and (2) is not conducting a concomitant reconsideration of the provider’s or supplier’s denial/revocation. In other words, separate individuals must conduct/perform/review the denial/revocation, the CAP, and the reconsideration.
This is to ensure completely independent reviews of all three transactions. If the contractor approves a CAP, it shall rescind the denial or revocation, issue or restore billing privileges (as applicable), and notify the supplier thereof via letter.
For new or restored billing privileges – and unless stated otherwise in another CMS directive or instruction - the effective date is based on the date the supplier came into compliance with all Medicare requirements. Consider the following examples:
1. Denials - A physician’s initial enrollment application is denied on March 1. The physician submits a CAP showing that, as of March 20, the physician was in compliance with all Medicare requirements.
The effective date of billing privileges should be March 20. The 30-day “backbilling rule” should not be applied in this situation because the rule assumes that the provider was in compliance with Medicare requirements during the 30-day period. This was not the case here. The physician was not in compliance with Medicare requirements until March 20.
2. Revocations – A site visit is conducted of a revalidating ambulance supplier. The supplier is found to be out of compliance with certain enrollment requirements. The supplier’s billing privileges were therefore revoked effective April 1. The supplier submitted a CAP showing that – as of April 10 – it was in compliance with all enrollment requirements.
The contractor shall apply a new effective date of April 10 to the supplier’s Provider Transaction Access Number of April 10. Services furnished during the period when the supplier was out of compliance with Medicare requirements shall not be paid. For an approved CAP, the contractor shall use the receipt date of the CAP request as the receipt date entered in the Provider Enrollment, Chain and Ownership System.
For DMEPOS suppliers, the effective date is the date it is awarded by the National Supplier Clearinghouse. CMS’ approval is required prior to restoring DMEPOS billing privileges.
C. Concurrent Submission of CAP and Reconsideration Request
If a CAP and a reconsideration request (see section 15.25.1.2 below) are submitted concurrently, the contractor shall first process and make a determination on the CAP. The contractor and the reconsideration hearing officer (HO) shall coordinate with one another prior to acting on a CAP or reconsideration request to determine if the other party has received a request.
If the CAP is accepted, the standard approval letter (or, if applicable, a notice of rescission of the revocation) shall be sent to the supplier with a statement that the reconsideration request should be withdrawn. If the CAP is denied:
• It can be appealed.
• The contractor shall notify the supplier of the denial and appeal rights via letter.
• The reconsideration request, if submitted, shall be processed.
Reconsideration Requests – Non-Certified Providers/Suppliers
NOTE: This section 15.25.1.2 does not apply to reconsiderations of revocations based wholly or partially on §424.535(a)(8). Such reconsiderations are addressed in section 15.25.2.2 below.
A. Timeframe for Submission
A supplier that wishes to request a reconsideration must file its request in writing with the Medicare contractor within 60 days from the supplier’s receipt of the notice of denial or revocation to be considered timely filed. Per 42 CFR §498.22(b)(3), the date of receipt is presumed to be 5 days after the date on the notice unless there is a showing that it was, in fact, received earlier or later. A reconsideration request submitted on the 65th day that falls on a weekend or holiday shall still be considered timely filed.
The date on which the contractor receives the request is considered to be the date of filing. Failure to timely request a reconsideration is deemed a waiver of all rights to further administrative review.
However, if a request for reconsideration is filed late, the reconsideration HO shall make a finding of good cause before taking any other action on the appeal. The time limit may be extended if good cause for late filing is shown. Good cause may be found when the record clearly shows or the party alleges and the record does not negate that the delay in filing was due to one of the following:
• Unusual or unavoidable circumstances, the nature of which demonstrate that the individual could not reasonably be expected to have been aware of the need to file timely; or
• Destruction by fire, or other damage, of the individual’s records when the destruction was responsible for the delay in filing.
B. Signatures
The reconsideration request must be submitted in the form of a letter that is signed and dated by the individual supplier, the authorized or delegated official, or a legal representative. (NOTE: The supplier’s contact person (as listed in section 13 of the Form CMS-855) does not qualify as a “legal representative” for purposes of signing a reconsideration request.)
For DMEPOS suppliers, the request must be signed by the authorized official, delegated official, owner or partner.
C. Contractor’s Receipt of Reconsideration Request
Upon receipt of a reconsideration request, the hearing officer (HO) shall send a letter to the supplier to acknowledge receipt of its request. In his or her acknowledgment letter, the HO shall advise the requesting party that the reconsideration will be conducted and a determination issued within 90 days from the date of the request. The HO shall include a copy of the acknowledgment letter in the reconsideration file.
D. Reconsideration Determination
If a timely request for a reconsideration is made, the reconsideration shall be conducted by a HO or senior staff having expertise in provider enrollment and who was not involved in the (1) initial decision to deny or revoke enrollment, or (2) the CAP determination.
In other words, separate individuals must conduct/perform/review the denial/revocation, the CAP, and the reconsideration. This is to ensure completely independent reviews of all three transactions.
The HO must hold an on-the-record reconsideration and issue a determination within 90 days of the date of the appeal request. Consistent with 42 CFR §498.24(a), the provider, the supplier, or the Medicare contractor may submit corrected, new, or previously omitted documentation or other facts in support of its reconsideration request at any time prior to the HO’s decision.
The HO must determine whether the denial or revocation is warranted based on all of the evidence presented. This includes:
• The initial determination itself,
• The findings on which the initial determination was based,
• The evidence considered in making the initial determination, and
• Any other written evidence submitted under § 498.24(a), taking into account facts relating to the status of the provider or supplier subsequent to the initial determination. If the appealing party has additional information that it would like a hearing officer to consider during the reconsideration or, if necessary, an administrative law judge to consider during a hearing, the party must submit that information with its request for reconsideration.
This is the party’s only opportunity to submit information during the administrative appeals process; the party will not have another opportunity to do so unless an administrative law judge specifically allows the party to do so under 42 CFR §498.56(e).
E. Issuance of Reconsideration Decision
The HO shall issue a written decision within 90 days of the date of the request. He/she shall: (1) forward the decision to the Medicare contractor via e-mail, fax, or mail, and (2) mail the decision to the supplier. The reconsideration letter shall include:
• The re-stated facts and findings, including the regulatory basis for the action as determined by the contractor in its initial determination;
• A summary of the documentation that the supplier provided;
• A clear explanation of why the HO is upholding or overturning the denial or revocation action in sufficient detail for the supplier to understand the HO’s decision and, if applicable, the nature of the supplier’s deficiencies;
• If applicable, the regulatory basis to support each reason for the denial or revocation;
• If applicable, an explanation of how the supplier does not meet the enrollment criteria or requirements;
• Further appeal rights, procedures for requesting an administrative law judge (ALJ) hearing, and the addresses to which the written appeal must be mailed or emailed; and
• Information the supplier must include with its appeal (name/legal business name; supplier number (if applicable); tax identification number/employer identification number (TIN/EIN); and a copy of the reconsideration decision).
If the HO overturns the contractor’s decision, the contractor shall rescind the denial or revocation, issue or restore billing privileges (as applicable), and notify the supplier thereof via letter. For initial enrollments, the effective date of Medicare billing privileges is based on the date the supplier came into compliance with all Medicare requirements or the receipt date of the application – subject, of course, to any applicable “backbilling” restrictions. (See section 15.17 of this chapter for more information.)
The contractor shall use the receipt date of the reconsideration request as the receipt date entered in the Provider Enrollment, Chain and Ownership System. For DMEPOS suppliers, the effective date is the date it is awarded by the National Supplier Clearinghouse.
F. Withdrawal of Reconsideration Request
The supplier or the individual who submitted the reconsideration request may withdraw the reconsideration request at any time prior to the mailing of the reconsideration decision. The withdrawal request must be in writing, signed, and filed with the Medicare contractor. If the contractor receives such a request, it shall send a letter or email to the supplier acknowledging the receipt of the request and advising that the reconsideration action will be terminated.
G. Reports
The contractor shall maintain a report detailing the number of reconsideration requests it receives, the outcomes (e.g., decision withheld, reversed, or further appeal requested or requests withdrawn), and the reason(s) for whatever decision was made. The contractor is not required to submit this information to CMS but it must be provided upon request.
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