Moving the HME Industry Forward


Understanding Each Step of Administrative Appeals – Part 1 of 4

August 19, 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 One of a four part series on the administrative appeals process. Part One addresses the redetermination level of appeal. Part Two addresses 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 One: Redetermination – First Level of Appeal
The first level of appeal is the redetermination level. A redetermination is an independent review of the claim by someone who was not involved in the initial review. It is an “on the record” review, so you will need to present your argument on paper. It is important that your appeal be organized and succinct. The reviewer has a limited amount of time to spend on each claim.  

A supplier must submit everything necessary to prove medical necessity but be careful about submitting documentation that is not relevant, as it will distract the reviewer, making it harder for the reviewer to locate the relevant information. In addition to relevant documentation, a supplier should provide a summary of the medical necessity, noting specific documentation that supports medical necessity. If the supplier has a clinician on staff, it is recommended that the clinician be involved in writing the patient summary.

A supplier has 120 days from the date it received the initial determination to file a request for redetermination. CMS presumes that the notice is received five days from the date of notice, unless there is evidence to the contrary. All suppliers need to have some sort of tickler system in place to ensure that a request is filed in a timely manner.  

If the request is not received timely, it will not be heard and the overpayment demand will stand. A supplier should calendar the deadline to be 120 days from the date of the letter. This will create a little bit of a grace period in the case of a last minute appeal.

It is strongly suggested that a supplier not wait until the last minute to file an appeal. This is even more important in the case of a post-payment demand if the supplier wants to avoid recoupment. Filing of the appeal will stop the DME MAC from recouping through the second level of appeal or the reconsideration decision.  

However, to stop recoupment, a redetermination request should be filed within 30 days or offsets will begin taking place on the 41st day. If a request is filed between days 30 and 120 once the request is processed, offsets will cease, but any amounts already collected will not be returned.

The request for redetermination must be in writing and filed with the DME MAC.  CMS states the preferred method for filing a request for redetermination is on a standard CMS form (Form CMS-20027), but other written requests will be accepted if they contain all of the following:
• The beneficiary’s name;
• The Medicare health insurance claim number;
• Specific item(s) and/or service(s) and the applicable date(s) of service; and
• the name and signature of the supplier or the supplier’s representative.

If even one required element is missing, the appeal will be dismissed.

The redetermination is an independent, critical examination of a claim by contractor personnel who was not involved in the initial determination. The reviewer must obtain and review all available, relevant information needed to make a determination. Such information must be included in the case file, and the case file must be made available for inspection by an appellant (i.e., the supplier who is appealing) or party upon request.

The redetermination decision must be mailed to the supplier within 60 days of the date the DME MAC received the request for redetermination.  This 60-day period is extended by 14 days each time the supplier submits additional evidence after filing the request for redetermination, even if the evidence is submitted at the request of the reviewer.

The DME MAC may dismiss a request for redetermination for a number of reasons, including, if:
• the supplier gives written notice withdrawing the request for redetermination;
• the party requesting the redetermination is not a proper party or is not entitled to a redetermination;
• the request for redetermination was not timely filed and the contractor did not find good cause for such failure;
• the request for redetermination was submitted by a representative, but the representative has not been properly appointed; or
• the redetermination request was not valid (i.e., did not have the required elements).

A supplier may appeal a dismissal of a redetermination to the Qualified Independent Contractor (QIC) by filing a request for reconsideration by the QIC within 60 days of the dismissal.  A supplier may also request the contractor vacate its dismissal within six months of the date of mailing of the dismissal notice if the supplier can show good and sufficient cause.

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