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Medicare Advantage Plans must follow the Federal Administrative Appeal Process When Non- Contracted Providers Dispute the Overpayment Recoupments

August 5, 2022

By: Andrea Greenblatt

Many Medicare Advantage Organizations (“MAOs”) are not contracted with providers. When an MAO enrollee presents to the provider for healthcare services, the provider verifies the enrollee’s coverage, obtains authorization where necessary, and renders the requisite services. The provider then submits a claim to the MAO for payment, and the MAO adjudicates payment. Nevertheless, in many instances, MAOs have submitted overpayment requests to providers after paying for the medically necessary services that the provider rendered.

Pursuant to federal law, MAOs must follow the administrative appeals process set forth in 42 C.F.R. Part 422, Subpart M, when non-contracted providers (“NCP”), who have furnished medical services to MAO’s enrollee, request reconsideration of overpayment determinations. Notwithstanding the foregoing, MAOs are submitting overpayment request letters to these NCPs, where they provide information regarding their own internal appeal process rather than the federal administrative appeals process. Thus, depriving NCPs of their right to appeal the overpayment requests, ultimately creates an undue administrative burden on NCPs and negatively affects their bottom line.

The Centers for Medicare & Medicaid Services’ (“CMS”) reminded MAOs to follow the federal administrative appeals process when NCPs request reconsideration of organization determinations.[1] An MAO’s “refusal to provide or pay for services, in whole or in part, including the type or level of services, that the enrollee believes should be furnished or arranged for by the MA organization” is an organization determination. 42 C.F.R. § 422.566(b)(3).  CMS further provided four examples of situations which constitute an organization determination, as follows:

  • Diagnosis code/DRG payment denials: When an NCP submits a claim to an MAO. The MAO initially approves the claim, but later reopens and revises the favorable organization determination. Thereafter, the MAO denies the DRG code finding that a different DRG code should have been billed, and the MAO then recoups the payment made to the NCP.
  • Downcoding: When a MAO approves coverage for inpatient services to be rendered by an NCP, but later reopens and revises the favorable organization determination, determining that the enrollee should have received outpatient services instead.
  • Bundling issues and rate of payment disputes: Pre and post-pay bundling and global payment determinations.
  • Level of care or rate of payment denials: Payment of a reduced fee schedule amount for a course of treatment. For example, an NCP bills a procedure code for a visit, but the MAO reimburses the NCP based on a lower level of care.

In light of CMS’ guidance and the MAO’s bad-faith tactics, NCPs should ensure they have the right support on their team to engage in the administrative appeals process. Further, NCPs should ensure that they are following the required administrative appeals process and the stringent timeframes when disputing an MAO’s overpayment requests and recoupments, and not the MAO’s internal appeals process.

Well-versed in negotiating and navigating the Medicare Advantage administrative appeal process for NCPs, the Wolfe | Pincavage team guides providers and medical groups through every aspect of the appeals process.

[1] See Non-Contract Provider Access to Medicare Administrative Appeals Process, CMS, Sept. 18, 2020 (“Even reconsideration requests submitted by [non-contracted providers] that relate to the type or level of service furnished to the enrollee must be reviewed in accordance with the administrative appeal processes outlined in 42 C.F.R. Part 422, Subpart M.”)