Medicare Program; Telephone and Electronic Requests for Review of Part B Initial Claim Determinations

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 405

[BPO-121-P]

RIN 0938-AG48

Medicare Program; Telephone and Electronic Requests for Review of

Part B Initial Claim Determinations

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would allow beneficiaries, providers, and

physicians (and other suppliers), who are entitled to appeal Medicare

Part B initial claim determinations, to request a review of the

carrier's initial determination by telephone or electronic

transmission. (Currently, a request for review may be made only in

writing.) Allowing the use of telephone and electronic requests would

expedite the review process by supplementing, not replacing, the

current review procedures. It would also improve carrier relationships

with the provider and beneficiary communities by providing quick and

easy access to the appeals process. (This rule would not provide for

telephone or electronic requests for review of Part B initial

determinations made by Peer Review Organizations and Health Maintenance

Organizations.)

DATES: Comments will be considered if we receive them at the

appropriate address, as provided below, no later than 5 p.m. on

September 8, 1995.

ADDRESSES: Mail written comments (1 original and 3 copies) to the

following address: Health Care Financing Administration, Department of

Health and Human Services, Attention: BPO-121-P, P.O. Box 26688,

Baltimore, MD 21207.

If you prefer, you may deliver your written comments (1 original

and 3 copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,

Washington, DC 20201, or

Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.

Because of staffing and resource limitations, we cannot accept

comments by facsimile (FAX) transmission. In commenting, please refer

to file code BPO-121-P. Comments received timely will be available for

public inspection as they are received, generally beginning

[[Page 35545]]

approximately 3 weeks after publication of a document, in Room 309-G of

the Department's offices at 200 Independence Avenue, SW., Washington,

DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m.

(phone: (202) 690-7890).

For comments that relate to information collection requirements,

mail a copy of comments to: Allison Herron Eydt, HCFA Desk Officer,

Office of Information and Regulatory Affairs, Room 10235, New Executive

Office Building, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Rosalind Little, (410) 966-6972.

SUPPLEMENTARY INFORMATION:

I. Background

Under current Medicare regulations, if a party indicates

dissatisfaction with a Part B initial determination on a claim, either

a review is made in accordance with regulations set forth in 42 CFR

405.807 (Review of initial determination) and section 12010 of the

Medicare Carriers Manual (effective October 1990) or the request is

dismissed if the appellant is not a proper party. (``Party'' is defined

at Sec. 405.802 as a person enrolled under Part B of title XVIII, his/

her assignee, or other entity having standing in the initial or

appellate proceedings.)

Section 405.807 sets forth the review process to be followed by a

party who is dissatisfied with an initial determination by a carrier. A

party is currently required to file a written request for review of the

initial determination with the carrier, the Social Security

Administration, or HCFA within 6 months after the date of the notice of

the initial determination. The carrier may, upon request by the party,

extend the time period to file a request for review if it finds the

party had good cause for failing to request a timely review. The

review, an independent reexamination of the entire claim, is performed

by carrier staff who played no part in making the initial

determination.

``Supplier'' is defined at Sec. 400.202 as a physician or other

practitioner, or an entity other than a ``provider,'' that furnishes

health care services under Medicare. Although ``supplier'' encompasses

physicians, for clarity in this document, we refer to both

``physicians'' and ``suppliers''.

``Provider'' is defined at Sec. 400.202 as a hospital, a skilled

nursing facility, a comprehensive outpatient rehabilitation facility, a

home health agency, or a hospice, that has in effect an agreement to

participate in Medicare, or a clinic, a rehabilitation agency, or a

public health agency that has a similar agreement but only to furnish

outpatient physical therapy or speech pathology services.

Under section 1879(d) of the Social Security Act (the Act), a

provider, or a physician or other supplier that accepts assignment to

furnish services to Medicare beneficiaries has the same appeal rights

as an individual beneficiary under certain limited circumstances if the

issue in dispute involves medical necessity or custodial care or home

health denials involving the failure to meet homebound or intermittent

skilled nursing care requirements. Additionally, regulations at 42 CFR

part 405, subpart H (Appeals Under the Medicare Part B Program) provide

that a supplier or physician that has taken assignment of a Part B

Medicare claim has the same appeal rights as the beneficiary.

II. Proposed Changes to the Procedures for Requesting a Review

We propose to change the Medicare regulations at Sec. 405.807 to

allow a party to request a review of a Part B initial claim

determination by telephone or by electronic transmission, in addition

to the current provisions for a written request. The term ``electronic

transmission'' would refer to tape-to-tape, disk-to-disk, or any other

HCFA-approved electronic media form for electronic transmission. Fax

machine transmissions would not be considered ``electronic

transmissions.'' We have included in this section proposed methods for

allowing parties to request a review by telephone or electronic

transmission.

A. Telephone Requests for Review

The notice accompanying the carrier's initial determination, which

explains how to initiate a request for review, would include the

telephone number designated by the carrier for making review requests.

If an appellant initiates a request for review by telephone, the

carrier would assign the request a confirmation number. During the

telephone discussion, the appellant would be given the confirmation

number and the name of the person who received his or her telephone

request. It is important that the confirmation number be kept by the

party requesting a review. If it is unclear to the carrier that a

request was filed or filed timely, the confirmation number would assist

the carrier in locating its records of the telephone request. While

providing a confirmation number serves as additional protection for the

appellant, loss of the number would not affect access to the appeal

process and or appeal records.

We believe that allowing appellants to initiate a request for

review by telephone would facilitate easier access to the appeals

process. We recognize, however, that there may be instances in which

the appellants may have difficulty in reaching a carrier by telephone.

In order to ensure that appellants who encounter difficulties have

sufficient time to file a written request for review by the 180-day

deadline, we would limit the period to request a review by telephone to

a period of 150 days after the date of the notice of the initial

determination. This shorter period for initiating a review by telephone

would afford an appellant who may be unsuccessful in reaching a carrier

by telephone an additional ``window of opportunity'' to make a written

request for review before the time to appeal expires.

We believe that providing this window would establish a safeguard

for appellants who were unable to reach the carrier by telephone. This

safeguard is necessary because of difficulty verifying that the

appellant could not reach the carrier by telephone. Therefore, if the

appellant telephoned the carrier on the 150th day and could not get

through, he or she would still have an additional 30 days to submit a

written request for review.

We intend to establish instructions for carriers that would ensure

that the right to a review is not compromised. These instructions would

include, but may not be limited to, the following:

B. Requests for Review

The carrier's initial claim notice must specify the

telephone number that a party dissatisfied with the initial

determination can call to request a review. The initial claim notice

must also specify the timeframe for requesting review by telephone

(that is, 150 days), as well as the timeframe for filing a written

request for review (that is, 180 days).

The carrier must inform and educate the beneficiaries

about its telephone review process through any one of the following:

--Bulletins/newsletters.

--Newspaper articles.

--Senior citizen groups.

--Beneficiary outreach workshops.

--Carrier's customer service/inquiry department.

--Provider relations department.

The carrier must document all telephone calls at the time

a call is received. The carrier must record the date the appellant

called and the confirmation number assigned to assure timely filing.

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The carrier must attempt to resolve as many issues as

possible during the telephone conversation. Some telephone reviews may

not be processed or completed because of the complexity of issues, need

for additional documentation, or other factors. At the end of each

telephone review, the carrier must advise the appellant of further

appeal rights.

The carrier must give the appellant a written

determination advising him or her of the results of the review,

regardless of whether a review is requested by telephone, in writing,

or via electronic transmission.

C. Electronic Requests for Review

Filing review requests electronically would be easier and faster

for parties than submitting a letter or the HCFA-1964 form (Request for

Review of Part B Medicare Claim). Electronic requests would shorten the

mailing time for submitting review requests and eliminate the paper

hassle of hardcopy requests. Currently, not all of the carriers have

the capacity to receive electronic requests for review. However, in the

future all carriers will have the capability to accept electronic

requests for review from entities that submit their claims

electronically. We propose to provide for electronic requests for

review but to limit this process to those entities that electronically

bill their claims to a carrier system that has the capability to

receive electronic requests for review. We would instruct carriers to

inform their billers whenever they obtain this capability and inform

them how the process works.

The following steps show how the electronic process is expected to

work:

Once the biller electronically receives notification of

the initial claim determination from the carrier, he or she must enter

a ``specified code'' to indicate that the retransmission is a request

for review.

For each line of the claim being submitted for review, the

biller must indicate the reason for the review in the ``Notes'' field.

This request for review is transmitted to the carrier.

Any additional documentation the biller wants to submit

can be mailed, or with carrier agreement, faxed to the carrier.

An appellant would have a 180-day period to request a review of an

initial determination by electronic means, which is the same time

allowed to file a written request for review. The appellant submitting

an electronic request for review would receive an online

acknowledgement at the time of transmission. Therefore, the appellant

would have documentation that a request for review was filed and the

time of filing. Since the appellant who submitted an electronic request

would have more control over initiating the request for review than an

appellant who telephoned for a request, we are not limiting electronic

requests to 150 days.

The above explanation is being furnished simply to provide an idea

of the way the process should work. However, should this proposed rule

be finally implemented, the above process is not necessarily the exact

process that will be employed.

III. Reasons for the Revisions

Parties to a Part B determination, particularly physicians who take

assignment, often contact carriers by telephone to dispute a

determination that a service was not covered or to obtain information

about why they were paid less than they thought was reasonable.

Sometimes, physicians call because they believe the code assigned to

the service is incorrect, or they want to correct some other error they

believe the carrier made.

Many beneficiaries raise questions about initial determinations if

a denial or partial denial of a bill is involved. Beneficiaries often

want to know why charges were reduced, especially if they believe the

charges were reasonable.

As a result of these calls, carriers frequently make corrections by

telephone, calling the process a reopening, informal review, or other

name. This action requires administrative funds, even though the party

has not actually used the administrative review process. The carrier,

in effect, may do two reviews in place of one for each instance in

which the informal action does not satisfy the party.

A party that calls to inquire about the initial determination, we

believe, would be pleased to know he or she has the option of writing

or calling to request a review. Whenever possible, the carrier would

attempt to resolve issues during a call and provide a review

determination at the conclusion of the call. At the end of each

telephone review, the carrier would advise the party of further appeal

rights.

The current review process that requires a party to write to

request a review takes time and effort, especially for beneficiaries.

At times, the party requesting a review in writing may have to wait

approximately 45 days to receive a review determination. Our intention

in encouraging telephone requests for reviews is to foster quick

communication between the review staff and the parties. The proposed

additional means of requesting a review by telephone or electronic

transmission would improve customer service in the following ways:

Making access to the appeals process easier.

Saving time.

Providing a more prompt response.

Reducing paperwork. (Currently a party must write a letter

or complete HCFA Form 1964 (Request for Review) or submit a completed

EOMB to request a review.)

Ensuring prompt payments.

Improving our relationship with the beneficiary and

physician/supplier communities.

IV. Exclusions From Telephone and Electronic Reviews

We do not intend to provide for telephone requests for review on

Part B determinations made by Peer Review Organizations (PROs) because

of the types of issues PROs handle. The issues are usually medically

focused and highly technical. We also believe this process would not be

administratively efficient and reasonable, if, in most cases,

adjudication cannot occur at the time of the call. The process could

actually result in delays and/or duplication of effort. We believe the

issues and documentation needed to process PRO appeals are sufficiently

different from other Part B reviews and the telephone request process

would be cumbersome for these appeals.

Similarly, we do not intend to provide for telephone requests for

review on Part B initial determinations made by Health Maintenance

Organizations (HMOs). Requests for reconsideration of initial

determinations made by HMOs are governed exclusively by 42 CFR part

417, subpart Q. Unlike part 473, subpart B (PRO reconsiderations and

appeals process), there is no cross-reference to part 405, subpart H in

part 417, subpart Q.

Electronic requests for review would be available to those billers

that bill their claims to a carrier system that has the capability to

receive electronic requests for review. Although PROs may make the

review determination, it is the carrier or fiscal intermediary's

responsibility to process any adjustments to the claim, as a result of

the review determination. Since the PROs are not involved in the

billing process, the PROs would not need to have the capability to

receive claims and/or electronic requests for reviews.

V. Provisions of the Proposed Regulation

Under sections 205(a), 1102(a), 1871(a)(1) and 1872 of the Act, the

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Secretary has the authority to prescribe regulations as may be

necessary to administer the Medicare program. It is under these

statutory authorities that we propose to change the Medicare

regulations to allow a party to request a review of a Part B initial

claim determination by telephone or by electronic transmission.

We propose to revise Sec. 405.807 (Review of Initial Determination)

as follows:

Redesignate existing paragraph (d) as new paragraph (b)

and remove the words ``in writing'' from newly redesignated paragraph

(b).

Redesignate existing paragraph (b) as paragraph (c) and

revise it to allow the additional methods of telephone and electronic

transmission for a party (other than a PRO) to request a review of an

initial determination by a carrier.

Redesignate existing paragraph (c) as paragraph (d) and

revise it to allow for a period of 150 days after the date of the

notice of the initial determination for a party to telephone the

carrier and request a review.

Add new paragraph (e) to clarify that a beneficiary,

provider, or attending practitioner who is dissatisfied with a PRO

initial determination may request a review of an initial determination

only in writing.

VI. Collection of Information Requirements

Section 405.807 of this document contains information collection

and recordkeeping requirements that are subject to review by the Office

of Management and Budget (OMB) under the Paperwork Reduction Act of

1980 (44 U.S.C. 3501 et seq.). These reporting and recordkeeping

requirements are not effective until a notice of OMB's approval is

published in the Federal Register. This proposed rule would impose

minimal recordkeeping requirements. We would require carriers to assign

a confirmation number to a party that initiates a request for review by

telephone. The party would be given the confirmation number by the

person who received his or her telephone request. We anticipate that

the confirmation number would be the same number the carrier uses as

its internal control number/documentation number (usually a 13-digit

number). If this can be done, there would not be any additional

recordkeeping on the carrier's part. The carrier is already assigning

this number and recording it.

The party who would be given the confirmation number would have to

record the number. This number would confirm that the party timely

filed a request should that become an issue later. The confirmation

number would assist the carrier in locating its record of the telephone

request. It would take less than one minute for the carrier to assign

and record the confirmation number and the same for the party to record

the confirmation number. While providing a confirmation number serves

as additional protection for the party, loss of the number would not

affect access to the appeal process and/or appeal records.

Organizations and individuals desiring to submit comments on the

information collection and recordkeeping requirements should direct

them to the OMB official whose name appears in the ADDRESSES section of

this preamble.

VII. Response to Comments

Because of the large number of items of correspondence we normally

receive on Federal Register documents published for comments, we are

not able to acknowledge or respond to them individually. We will

consider all comments we receive by the date and time specified in the

``DATES'' section of this preamble, and, if we proceed with a

subsequent document, we will respond to the comments in the preamble to

that document.

VIII. Regulatory Impact Statement

We generally prepare a regulatory flexibility analysis that is

consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601

through 612), unless we certify that a rule would not have a

significant economic impact on a substantial number of small entities.

For purposes of the RFA, carriers and beneficiaries are not considered

to be small entities. We consider all providers, physicians, and other

suppliers to be small entities. Under this proposed rule,

beneficiaries, providers, and physicians and other suppliers may

request a review of an initial claim determination by telephone or

through electronic transmission. This review is the first level of

appeal for Part B claims and is performed by carrier staff who had no

part in making the initial determination. This review, without the

presence of oral testimony by the appellant party, is considered to be

less costly to all parties and is a more expeditious way of handling

complaints than a hearing.

Section 1102(b) of the Act requires us to prepare a regulatory

impact statement if a rule may have a significant impact on the

operations of a substantial number of small rural hospitals. Such an

analysis must conform to the provisions of section 603 of the RFA. For

purposes of section 1102(b) of the Act, we define a small rural

hospital as a hospital that is located outside of a Metropolitan

Statistical Area and has fewer than 50 beds.

We are not preparing a regulatory impact statement since we have

determined, and we certify, that this rule would not have a significant

economic impact on the operations of a substantial number of small

rural hospitals.

In accordance with the provisions of Executive Order 12866, this

proposed rule was not reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 405

Administrative practice and procedure, Health facilities, Health

professions, Kidney diseases, Medicare, Reporting and recordkeeping

requirements, Rural areas, X-rays.

42 CFR Part 405 would be amended as follows:

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

1. The authority citation for part 405, subpart H is revised to

read as follows:

Authority: Secs. 205(a), 1102, 1842(b)(3)(C), 1869(b), and 1871,

and 1872 of the Social Security Act, as amended. (42 U.S.C. 405(a),

1302, 1395u(b)(3)(C), 1395ff(b), 1395hh and 1395ii.)

Subpart H--Appeals Under the Medicare Part B Program

2. Section 405.807 is revised to read as follows:

Sec. 405.807 Review of initial determination.

(a) General. A party to an initial determination by a carrier, who

is dissatisfied with the initial determination, may request that the

carrier review the determination. If a review is requested, the request

for review does not constitute a waiver of the right to a hearing

(under Sec. 405.815) subsequent to the review.

(b) Definition. Request for review is a clear expression by a party

to an initial determination that indicates he or she is dissatisfied

with the initial determination and wants to appeal the matter.

(c) Place and method of filing a request. Except for the limitation

on PRO requests set forth in paragraph (e) of this section, a request

by a party for a carrier to review the initial determination may be

made only in one of the following ways:

(1) In writing and filed at an office of the carrier or at an

office of SSA or HCFA.

(2) By telephone to the telephone number designated by the carrier

as the

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appropriate number for its receipt of requests for review.

(3) By electronic transmission to the carrier.

(d) Time of filing request. (1) For telephone requests, a party to

the initial determination may request a review of the initial

determination within 150 days after the date of the notice of the

initial determination.

(2) For requests made in writing or by electronic transmission, a

party to the initial determination may request a review of the

determination within 180 days after the date of the notice of the

initial determination.

(3) The carrier may, upon request by the party affected, extend the

period for requesting the review.

(4) For telephone requests, a party to the initial determination is

not precluded from later making a written or electronic request if

unable to contact the carrier within the 150 day timeframe. The party

has an additional 30 days to submit a written or electronic request for

review.

(e) Exception to telephone and electronic review requests. A party

that submits a request for review of a Medicare Part B initial

determination on a claim by a PRO must follow the submittal

requirements described in paragraph (c)(1) of this section.

(Catalog of Federal Domestic Assistance Program No. 93.774,

Medicare--Supplementary Medical Insurance Program)

Dated: June 28, 1995.

Bruce C. Vladeck,

Administrator, Health Care Financing Administration.

[FR Doc. 95-16807 Filed 7-7-95; 8:45 am]

BILLING CODE 4120-01-P