Moving the HME Industry Forward


Understanding Administrative Appeals – Part 3 of 4

September 2, 2013

AMARILLO, TX – Post-payment audits (by DME MACs, ZPICs, and RACs) are a permanent part of the DME industry.  Regardless of how thorough the DME supplier’s patient files are, the chances of winning at the audit stage are small.  This is because the auditor is looking for a reason to deny a claim and demand a repayment.  As a result, if subjected to an audit, the DME supplier can expect to traverse the various administrative appeal stages.

This is Part Three of a four part series on the administrative appeals process.  Part One addressed the redetermination level of appeal.  Part Two addressed the reconsideration level of appeal.  Part Three addresses the administrative law judge level of appeal.  Part Four addresses the Medicare Appeals Counsel/judicial review levels of appeal.

Part Three: ALJ Hearing – Third Level of Appeal
A supplier who disagrees with the QIC’s reconsideration decision may request an ALJ hearing.  This is the first time a supplier actually gets to talk to an individual and present its case on the claim.  The supplier must file a written request for an ALJ hearing within 60 days after receipt of the QIC’s reconsideration decision.  The supplier must also send a copy of the request to all other parties.

Recoupment is allowed during the ALJ process.  If the overpayment demand is large and the DME supplier cannot afford to have the overpayment recouped, then the supplier should enter into a payment arrangement with the DME MAC while the supplier proceeds through the ALJ stage.

To qualify for an ALJ appeal, the amount in controversy must be greater than or equal to $120.  The request must be made in writing and include all of the following:
• The name, address, and Medicare health insurance claim number of the beneficiary whose claim is being appealed;
• The name and address of the appellant, when the appellant is not the beneficiary;
• The name and address of the designated representative, if any;
• The document control number assigned to the appeal by the QIC, if any;
• The dates of service;
• The reasons the appellant disagrees with the QIC’s reconsideration or other determination being appealed; and
• A statement of any additional evidence to be submitted and the date it will be submitted.

The ALJ may conduct an oral hearing by video-teleconferencing, if such technology is available, or by telephone (which is often the case) if the request for hearing shows that a telephone hearing may be more convenient for one or more parties.  An in-person hearing will be conducted if video-teleconferencing technology is not available or other special or extraordinary circumstances exist.

The ALJ sends a notice of hearing.  The notice will contain a proposed time and place of hearing, and require all parties to reply to the notice by (1) acknowledging whether they plan to attend the hearing at the time and place proposed in the notice of hearing or (2) objecting to the proposed time or place of the hearing.

Any evidence that was not submitted prior to the issuance of the QIC’s reconsideration decision must be accompanied by a statement explaining why the evidence was not previously submitted.  The ALJ will examine the new evidence and determine whether the supplier had good cause for submitting the evidence for the first time at the ALJ level.  If good cause does not exist, the ALJ will exclude the evidence from the proceeding and will not consider the evidence in reaching his or her decision.

The ALJ is required to issue a decision, dismissal, or remand no later than 90 days after the date the request for hearing was received.  The deadline is extended to 180 days if the appeal was escalated from the QIC level.  Unfortunately, the ALJs are very busy these days and, often, are not meeting these deadlines.  When the ALJ’s office calls to schedule the hearing, it will ask the supplier to sign a waiver of timely hearing.  While this seems against the notions of fair play, generally, it is in the supplier’s best interest to give the ALJ the full time needed in order to make a full and complete decision.

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato PC, a law firm based in Amarillo, Tex. He represents pharmacies, infusion companies, HME companies, and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or