CMS Releases First Formal Non-Group Health Plan (NGHP) Appeals Reference Guide

Written by Kayla Pigeon, Esq.

For the first time, The Centers for Medicare and Medicaid Services (CMS) has released a formal reference guide on the Conditional Payment Appeals process for Insurers. The new guide entitled, Non-Group Health Plan (NGHP) Applicable Plan Appeals Reference Guide – Version 1.0, provides a comprehensive outline of the five-level appeals process and the required supporting documentation by appeal type and mirrors other reference guides issued by CMS, The NGHP User Guide and The WCMSA Reference Guide. Previously, this information was provided in the form of slide deck presentations that are also still available for download. 

A comparison from the prior slide deck guidance to the new formal reference guidance identified a few notable updates.

Section 2.0 Appealing Medicare’s Demand:

• Section 2.0 outlines the basic appeal levels as well as how to submit Redetermination Requests, the standard appeals documentation requirements, and Authorization/Letter of Authority requirements.

• Unlike previous materials this section specifically emphasizes that by regulation all correspondence is always presumed to be received within five (5) days of the date on the letter.

• Late appeals are only accepted with good cause and an example of good cause is a natural disaster.

• The accuracy of Section 111 reporting is also highlighted noting that: By law, insurers are required to ensure the information reported to Medicare as mandated by Section 111 of the Medicare, Medicaid, and SCHIP Extension Act (MMSEA) of 2007 (commonly referred to as “Section 111 reporting”) is accurate and up to date. Medicare’s CRC proceeds with the recovery process under the expectation that the reported records are accurate.

• Lastly, of note in this section CMS states that appeals must clearly identify what claims are being appealed or if all are under appeal.

Section 3.0 NGHP Applicable Plan Appeals:

Section 3.0 outlines what is subject to appeal and the supporting documentation required for each available appeal type.

The outlined appeal types, their subsections and key updates are as follows.

3.1.1 Termination of ORM Due to Benefits Exhaustion

• The guidance for benefits exhaustion has now been broken into two main categories:

1. The first is when the benefits exhaust date has not been reported in Section 111 reporting. This scenario reflects the same requirements of a cover letter and payment ledger as outlined in previous CMS guidance.

2. The second category is when the benefits exhaust has been updated via Section 111 reporting. The new guidance around this scenario requires only a cover letter and written documentation of the benefits exhaust date and that the exhaust date has in fact been reported.  

• Another important clarification in this section confirms that when policy limits are issued to the beneficiary or their authorized representative, CMS requires documentation from the policy that authorizes these payments. Requests for this type of documentation have been seen in practice but not previously included in CMS guidance.

• Lastly, Section 111 reporting is highlighted once again in this subsection as CMS goes on to outline that asserting that policy limits are lower than what is reported through Section 111 reporting is unacceptable unless:

1. Conclusive written documentation the amount reported was incorrect is provided as part of the dispute or appeal, and

2. The Section 111 reported policy limit has been or will be updated to reflect the correct policy limit. The CRC also requires a declaration page that documents the plan’s no-fault policy limits if the policy limit asserted in the appeal differs from the policy limit the insurer reported to CMS via the Section 111 reporting process.

3.1.2 Termination of ORM due to Settlement or Other Claim Resolution

Key updated language added to this section is:

• The CRC can recover claims up to, but not including, the settlement date, unless the settlement specifically releases the debtor from all primary payer responsibility, or outlines in its documentation other requirements specified by the applicable plan, such as specific coverage information or other responsibilities.

This new language seems to confirm that if the carrier is released from all primary payer responsibility in the settlement, then the CRC will no longer be able to recover, even on claims pre-settlement. Post- settlement, the BCRC pursues any post-settlement conditional payment recoveries. This point has been somewhat ambiguous previously as the CRC has in the past, asserted recovery after settlement for dates of service that occurred while Ongoing Responsibility for Medical (ORM) was effective, and in practice, post-settlement conditional payment notices are to be issued by the BCRC instead of the CRC

3.1.3 Termination of ORM Due to Other Policy Terms

New guidance in this section specifically requires that if Maximum Medical Improvement (MMI) is being asserted that the independent Medical Exam (IME) or MMI report must be submitted with the appeal.

3.1.6 Unrelated Services

Additional guidance for this appeal type:

• When determining relatedness, the CRC must identify services that occur on or around the date of incident and associate claims that appear to be related to the reported diagnosis codes.

CMS appears to be emphasizing that services which occur on or near the date of incident will receive extra scrutiny regarding causal relation due to their proximity to the compensable injury.

3.1.7 Duplicate Primary Payment

This section elaborates on previous guidance that states that primary payment may not be made to any person or entity besides Medicare after a Medicare Demand letter has issued. New guidance for this appeal type includes:

• Appeals that include payments made after the presumed receipt of the demand letter will be denied. If the related coverage records submitted to Medicare were subsequently deleted, a Duplicate Primary Payment defense will be denied.

• There must be an active MSP record to process this appeal type. If the MSP record that established the Medicare demand was deleted through the Section 111 reporting process, the MSP record will need to be re-established by the RRE before the CRC can accept a duplicate primary payment appeal.

• This appeal does not apply when there are processed claims where the primary payment was applied to a deductible or co-pay or paid to the beneficiary or their representative.

Appendices:

The appendices include an example of an Appeal Cover letter, Payment Ledgers, Model Language for Applicable Plans that Appoint Recovery Agents and a list of Acronyms.

Appendix C which is the Model Language for Applicable Plans that Appoint Recovery Agents, has several important clarifications that are not included in previous CMS guidance:

1. The LOA may be two documents such as a cover letter and a copy of a contract, as long as there is a clear demonstration of authority or chain of authorization.

2. Overarching contracts, retainer agreements, and similar documents may be submitted but only partially satisfy the requirements that the LOA reference a specific Case ID. By regulation, authorizations are only able to be applied on a per individual recovery case basis.

3. The CRC automatically includes a copy of the authorization in the case files that are shared with the entities administering higher-level appeals.

Sanderson Firm Commentary:

The goal of this new appeals guide seems to be threefold. First, it clarifies some unanswered questions and points of ambiguity that existed in previous guidance by providing a more formal outline of the appeals process and the required appeal documentation. Second, it specifically elaborates on areas where common mistakes are seen in appeals. Third, it emphasizes the importance that accurate Section 111 reporting data plays in the appeals process.

As far as the emphasis on Section 111 reporting, it appears that this guide may be hinting at the impact an appeal based on incorrect reporting will have in the future, if and when the rule on Section 111 Civil Monetary Penalties (CMPs) is finalized. If, for example, an appeal was filed where policy limits were incorrectly reported, the inaccurate information would need to be clarified as part of the appeal. This could potentially subject the primary payer to CMPs for inaccurate reporting and is why it is so important to proactively ensure accurate Section 111 data prior to the appeal process.

The appeals process remains complex, and every appeal needs to be addressed on a case-by-case basis to ensure both the correct arguments and supporting documentation are included. Sanderson Firm offers a variety of recovery services that include handling all levels of Medicare appeals. To learn more about our Conditional Payment services, please contact us.