D. Medicare
(Neighborhood Legal Services contributed to the writing of this section.)
Medicare is a federal health insurance program for persons over 65 and persons
with disabilities. Medicare Part A, known as Hospital Insurance, covers inpatient
care, skilled nursing facility care, hospice care, home health services, and
durable medical equipment. Medicare Part B, known as Supplemental Medical Insurance,
covers various outpatient services, including physician services, durable medical
equipment, prosthetic devices, orthotic devices and home health services.
1. Eligibility
Medicare is almost universal for U.S. residents age 65 and older. Persons eligible
for Social Security or Railroad Retirement benefits automatically qualify for
Part A benefits and qualify for Part B, at their option, by paying a monthly
premium. Persons age 65 or older who do not automatically qualify for Part A
may enroll by paying the Part A premium. States and public organizations may
purchase Part A, on a group basis, for retired or current employees who are
65 or older. Medicare also covers individuals under age 65 who:
a. Have received 24 months of Social Security Disability Insurance (SSDI) benefits,
or 24 months of Railroad Retirement disability benefits, or
b. Have End-Stage Renal Disease (a kidney impairment that requires regular dialysis
or kidney transplantation to maintain life).
When a person has ALS (Lou Gehrig’s disease), however, the 24 month waiting
period is not required.
Medicare automatically enrolls individuals age 65 or older when they qualify
for Social Security or Railroad Retirement benefits, as well as younger individuals
after receipt of 24 months of SSDI or Railroad Disability benefits. All others
must file an application. Medicare has no income or resource eligibility test.
2. Coverage
Medicare does not use the term "AT." Items we think of as AT fall
under one or more Medicare categories such as durable medical equipment (DME),
prosthetic devices or orthotics. All three categories are included under Medicare
Part B. Although Part A covers DME, funding for AT often involves Part B.
DME includes, among other things, iron lungs, oxygen tents, hospital beds and
wheelchairs used in the patient's home. The regulations define DME as the following:
a. Can withstand repeated use;
b. is primarily and customarily used to serve a medical purpose;
c. generally is not useful to an individual in the absence of an illness or
injury; and
d. is appropriate for use in the home.
Prosthetic devices are devices that replace all or part of an internal body
organ. The definition includes devices that replace all or part of the function
of a permanently inoperative or malfunctioning external body member or
internal body organ.
Orthotics include leg, arm, back and neck braces. A brace is a rigid or semi-rigid
device which supports a weak or deformed body member or restricts or eliminates
motion in a diseased or injured part of the body.
Medicare now extends coverage to augmentative communication devices (ACDs).
Although Medicare had an exclusion for this equipment for years, it has changed
its policy and now does pay for ACDs.
Medicare law does specifically exclude major categories of services, including
most prescriptions, routine doctor visits, most foot care, dental care, eye
examinations and eyeglasses, hearing aids and examinations,
cosmetic surgery, and some vaccines.
Medicare rules also provide parameters within which certain equipment is covered.
Equipment vendors who receive funding through. Medicare will often know about
these rules and can assist with this funding
process.
3. Medical Necessity
To obtain funding for AT through Medicare, it must be medically necessary. Medicare
funding is limited to services that are reasonable and necessary for the diagnosis
or treatment of illness or injury or to improve the functioning of a malformed
body member. This language is the basis for Medicare's so-called "medical
necessity" test.
4. Processing a Claim
Unlike Medicaid, under traditional Medicare, there is no Medicare prior-approval
process. With Medicare, the application process starts when the individual or
patient takes delivery of the item. Thereafter, the vendor submits a claim for
payment to the insurance carrier. In the Part A context, the carrier is known
as a Fiscal Intermediary; in the Part B context, it is known as a Durable Medical
Equipment Regional Carrier (DMERC). This discussion will emphasize the process
involving Part B claims.
In order for the claim to move forward, the vendor must deliver the item and
do one of the following:
a. Accept assignment and agree to take whatever rate Medicare approves; or
b. Not accept assignment and bill the patient or some other payor. The other
payor might be Medicaid or some other form of third party insurance. Vendors
will typically accept assignment for items which are routinely approved by the
DMERC, like hospital beds. Vendors are more reluctant to accept assignment if
the item is one for which Medicare rules restrict coverage. If the vendor accepts
assignment and the DMERC denies
the claim, the vendor will not get paid.
This process is different if the person is enrolled in Medicare Managed Care.
Please see below for a discussion of Medicare Managed Care.
5. Appeals
The Medicare appeals process will differ depending on whether Part A or Part
B is involved. It will also be different if the person is enrolled in Medicare
Managed Care. Please see below for a discussion of Medicare
Managed Care.
For Part B, the appeal process outside managed care will follow this sequence:
a. Carrier review
b. Carrier hearing
c. Administrative Law Judge (ALJ) hearing ($500 minimum)
d. Social Security Appeals Council
e. U.S. District Court ($1,000 minimum)
For Part A, a "reconsideration" replaces the carrier review and carrier
hearing steps, and the threshold drops to $100 for ALJ hearings.
6. Medicare Managed Care
For several years now, Medicare managed care programs have been operated through
health maintenance organizations (HMOs). In many parts of the country, including
many parts of New York State, they have offered an alternative to traditional
Medicare. The Balanced Budget Act of 1997 expanded the number of alternatives
to traditional Medicare through what is know as Medicare Part C, the M+C program.
Now, every individual entitled to Medicare Part A and enrolled under Part B,
except for individuals with end-stage renal disease, may elect to receive benefits
through either the existing fee-for-service program or a managed care plan,
including one of the new M+C plans.
All managed care and M+C organizations are required to cover the full range
of Medicare benefits that beneficiaries would have been able to receive under
the original, fee-for-service program. This means that any of the successful
arguments for funding of AT devices through traditional Medicare will also apply
to the range of managed care or M+C plans. Historically, the attraction of some
managed care plans was that they offered coverage for items, such as prescription
drugs, not covered by traditional Medicare. This will likely be true for the
new range of M+C options, which can offer more, but not less, than is available
under traditional Medicare.
All Managed Care Plans will follow a Prior Approval Model. The application process, in the traditional program, starts when an individual takes delivery of the item. Thereafter, the vendor submits a claim for payment to the private insurance carrier responsible for making Medicare decisions. For Part B claims, the carrier is known as the DME Regional Carrier (DMERC).
If an individual is enrolled in any of the managed care or M+C plans, including
a Medicare HMO, prior approval is available. A prior approval request is submitted
directly to the HMO or other entity responsible for administering the M+C plan.
Under this system, there is no need to secure payment ahead of time as there
is under traditional Medicare. However, under a prior approval procedure, the
beneficiary generally must wait without the AT device as the claim goes through
the decision making and appeals process.
The procedures outlined below will apply to all M+C plans. However, since the
great majority of managed care recipients are enrolled in Medicare HMOs, the
examples will reference the HMO.
a. Step one: Initial decision
HMO staff who review the claim information make this decision. This is an on-paper
review, most likely without additional communication with the beneficiary, treating
doctor or other health professionals, and without in-person appearances by the
beneficiary before, or evaluations of the beneficiary by the HMO staff.
An initial decision must be made within 14 calendar days after the claim is
received. The HMO or M+C organization may extend the time frame by up to 14
calendar days if the beneficiary requests the extension or if the organization
justifies the need for additional information. If no decision is issued within
the mandated time frame, this failure constitutes an adverse decision and can
be appealed.
The beneficiary or his/her physician can request an expedited initial decision.
This oral or written request is directed to the HMO or M+C organization. If
it is made by the beneficiary, the HMO must provide an expedited determination
if it determines that applying the standard time frame could seriously jeopardize
the life or health of the beneficiary or his/her "ability to regain maximum
function." If the request is supported by a physician, the HMO must provide
the expedited determination "if the physician indicates that applying the
standard time frame for making a determination could seriously jeopardize the
life or health of the [beneficiary] or the [beneficiary’s] ability to
regain maximum function." Generally, an expedited determination must be
made within three days. HMOs and other Medicare Managed Care entities, however,
may be treated differently.
b. Step two: Reconsideration
The initial decision will be issued in writing and mailed to the beneficiary.
It will state that there is a right to appeal the initial decision. The filing
of an appeal is called "requesting reconsideration or review." The
request for reconsideration must be filed by the Medicare beneficiary or by
some other person who is acting on his/her behalf. Requests for reconsideration
must be filed no later than 60 days from the date of the notice of HMO or other
M+C organization determination. The beneficiary also must follow the instructions
for requesting reconsideration stated in the HMO letter. Generally, the request
for reconsideration can be made by filing the written request with the HMO or
with a Social Security Administration (SSA) office. It is recommended that correspondence
with the HMO or SSA be sent by "certified mail, return-receipt requested."
o How is the HMO’s reconsideration conducted?
In cases involving AT device claims, reconsideration will involve either a one-step
or a two-step process. First, the case will be reviewed again within the HMO
or other M+C organization. If that review results in an approval of coverage,
the review will end there. If it results in a denial, there will be a second
step. Following denial by the HMO, the case will be automatically forwarded
to an "independent entity," the Center for Health Dispute Resolution
(CHDR), for an additional review. This second step is automatic; the beneficiary
does not have to take any action for it to occur.
Reconsideration of AT device claims will be based on the documentation in the
initial claim. Unless there was a lack of documentation supporting the initial
claim or there is now a major change in the beneficiary's condition, there is
no need to submit additional information at this step of the process. The HMO’s
reconsideration decision must be made within 30 days. The HMO may extend the
time frame by up to 14 calendar days if the beneficiary requests the extension
or if the HMO can justify the delay. If no decision is issued within the mandated
time frame, his failure constitutes an adverse decision and can be appealed.
If the HMO’s reconsideration results in an adverse decision, it must prepare
a written explanation and send the case file within 24 hours to CHDR for the
second step of the reconsideration process.
The beneficiary or his/her physician can request that the HMO make an expedited
reconsideration. In considering this request, the HMO must follow the same criteria,
listed above, for initial determinations. Generally, an expedited reconsideration
determination must be made within three days. Under the federal regulations,
certain specific managed care organizations have 60 days to issue a reconsideration
decision and three days to issue an expedited decision.
o Reconsideration by the Center for Health Dispute Resolution
(CHDR)
The Centers for Medicare and Medicaid Services (CMS) has contracted with CHDR
to serve as the outside independent entity to review and resolve HMO or other
M+C organization reconsiderations that uphold the earlier denial of coverage.
CHDR’s reconsideration consists of a review of the record, i.e., a review
of the documents that were submitted to support the initial request for funding
of the AT device.
The regulations governing CHDR’s review require that it conduct the review
as promptly as is needed in terms of the beneficiary’s health. The CHDR
Medicare+Choice Reconsideration Process Manual is more specific. Section 4.6
of the manual provides that, effective January 1, 1999, CHDR is responsible
for completing reconsiderations within the same time frames and standards as
apply to HMOs or other M+C organizations. This means that CHDR must render its
decision within 30 days or within three days in the case of an expedited decision.
CMS has also contracted with CHDR to process reconsiderations for certain specific
managed care entities. For these organizations, CHDR automatically reviews the
managed care organization’s adverse reconsideration decision. CHDR has
30 days to issue its reconsideration decision and 10 days to issue an expedited
decision.
c. Step three: Administrative Law Judge hearing
As noted above, CHDR’s reconsideration decision will be issued in writing
and will be mailed to the beneficiary. If it denies the claim again, the next
appeal level is the Administrative Law Judge (ALJ) hearing.
Written requests for ALJ hearings must be filed no later than 60 days from the
date of the reconsideration decision. In addition, the Medicare payment being
sought must be $100 or more. The beneficiary may request an ALJ hearing by writing
to the address stated in CHDR’s decision. Requests for ALJ hearings also
can be filed with the Social Security Administration office nearest the beneficiary's
home.
The hearing is conducted by an Administrative Law Judge who is not associated
with an HMO, other M+C organization, or CHDR. The hearing can be on the record
(an on-paper review) or it can be an in-person proceeding. The beneficiary,
family members, treating doctor and/or other health professionals can all describe,
directly to the ALJ, the characteristics and impacts of the individual’s
disability; the treatments considered; and how the specific device being recommended
will meet the individual’s needs. Additional information can be submitted,
both through documents and oral statements at the hearing. The likelihood of
a favorable ALJ decision is greatly enhanced if an attorney or other advocate
represents the beneficiary.
Unfortunately, there are no time limits for an ALJ to schedule a hearing or
to issue a decision after a hearing. Beneficiaries and their advocates should
explain in their hearing request letter that – unlike typical Medicare
claims – the beneficiary in this appeal does not yet have access to the
requested device and instead is still waiting for access to an essential device
or treatment. These remarks should be for the purpose of requesting that the
hearing be held as soon as possible. It is not possible to estimate precisely
when a hearing will be conducted or when the ALJ decision will be issued. A
fair estimate is that the hearing will be held six to nine months after the
request is filed, and the decision will be issued two to three months later.
Beneficiaries are urged to strongly consider an ALJ appeal if their claim is
denied through the reconsideration level of appeal. In some cases, the ALJ will
not be bound by more restrictive Medicare policies that govern earlier decisions.
For example, an ALJ is not required to follow certain National Coverage Decisions
which would otherwise bar HMOs from approving coverage for specific devices.
d. Step four: Departmental appeal board
If the ALJ decision denies funding for the AT device, a beneficiary may request
review by the Departmental Appeal Board. Requests for Appeal Board review must
be filed no later than 60 days after the ALJ decision is received. As with the
ALJ hearing, the Medicare reimbursement in dispute must be $100 or greater.
Appeal Board review is conducted by reviewing all the documents supporting the
claim as well as the testimony given at the hearing. In almost all cases, the
advocate or attorney will submit a memorandum of law (or letter brief) explaining
why the ALJ decision is incorrect. This will have to be done on a case-by-case
basis. Unless some significant new fact or circumstance arises, in general,
there is no opportunity to submit new information at this level of appeal.
We cannot estimate precisely when the Appeal Board will issue its decision.
A fair estimate is that the decision will be issued six to nine months after
the request is filed. Because each appeal will be case-specific, it is not possible
to predict whether the Appeal Board decision will be favorable or unfavorable.
In general, beneficiaries should not expect these decisions to be favorable,
and beneficiaries must pursue the final appeal option, judicial review.
e. Step five: Judicial review
The final appeal available to Medicare beneficiaries is an appeal to the federal
courts. This is a step that technically can be pursued without an attorney,
but as a practical it matter never should be. Requests for judicial review must
be filed no later than 60 days after the Appeal Board decision is issued. In
addition, the Medicare reimbursement being sought must be $1,000 or greater.
Beneficiaries should not assume their claims are weak solely because they face
the prospect of a court appeal.
7. Contacts
a. The Durable Medical Equipment Regional Carrier (DMERC) can assist with DME
claims or questions that relate to DME.
Palmetto Government Benefits Administration
(800) 583-2236
(800) 223-1296 (TTY)
b. The Social Security Administration can assist with Medicare Part A or Part
B questions, a change of address, or a lost Medicare card.
The Social Security Administration
(800) 772-1213
c. The Centers for Medicare and Medicaid Service can assist with policy questions
and is a source for publications. The Center is the agency within the U.S. Department
of Health and Human Services that administers the Medicare program.
The Centers for Medicare and Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244-1850
(410) 786-3000