Sunday, June 7, 2015

New Final Rule on Reimbursement Decisions

CMS released its Final Rule on February 27, 2015, permitting and requiring insurers and others who wish to contest a reimbursement decision made by the Coordination of Benefits and Recovery Contractor (COBRC) to pursue an administrative appeal of that decision rather than having to pursue it in court. 80 Fed Reg 10611

The rule applies to "applicable plans," and a definition has been added, tracking the statutory language, specifying that that phrase means "liability insurance (including self-insurance), no-fault insurance, or a workers’ compensation law or plan." The new rule does not include Medicare beneficiaries or providers; they were already subject to administrative appeal procedures.

It provides that the decision of the COBRC seeking a recovery directly from the debtor will be regarded as an "initial determination as to the amount and the existence of the recovery claim," thus triggering the appeal provisions for a "redetermination" of that decision. Only these issues are subject to appeal. The administrative appeal is not available to challenge a decision by CMS to seek recovery from one party as opposed to another. If CMS decides to pursue a primary payer before the beneficiary, for example, that decision is not subject to administrative appeal and, presumably, the fact that the beneficiary has not been sent a reimbursement demand will not be a valid defense to the claim.

Only the person identified as the "debtor," the entity from which a reimbursement is required, is permitted to participate in the appeal.

The debtor will have the right to name an attorney or other "appointed representative" to handle the appeal on its behalf. The Medicare beneficiary will be provided with notice of the appeal by the debtor, but will not be permitted to participate in the appeal unless he or she has received an initial determination as well.

The following suggested comment and CMS's response are included in the publication:
Comment: Commenters requested we clarify that initial determinations (recovery demands) involving liability insurance (including self-insurance), no- fault insurance, or workers’ compensation benefits are made only after there is a settlement with a beneficiary.

Response: Recovery demands are appropriate once primary payment responsibility has been demonstrated. Primary payment responsibility can be demonstrated based upon a settlement, judgment, award, or other payment. See section 1862(b)(2)(B)(ii) of the Act and 42 CFR 411.22 of the regulations.
CMS declined a suggestion that the accrual of interest on the reimbursement amount be stayed pending the administrative appeal, noting that the debtor can avoid additional interest charges by paying the reimbursement amount, and that such repayment would not jeopardize the right to appeal.

Lastly, and significantly, CMS did not provide for this administrative appeal process to apply to reimbursement notices from Medicare Advantage plans or Part D contractors, and it rejected a suggestion that it be extended to include them. It noted that the SMART Act, which required this new administrative appeal process, expressly refers only to Part A and Part B payments - that is, "traditional Medicare."

The procedure for administrative appeals is provided under 42 CFR 405.900 et seq., entitled "Determinations, Redeterminations, Reconsiderations, and Appeals Under Original Medicare (Part A and Part B)."