Medicare denials of payment based on medical necessity that are believed to be incorrect or clinically inappropriate may be appealed using the process outlined below. Statutory exclusions, i.e., services defined as non-payable under Medicare law, cannot be appealed. For example, denials based on any of the following reasons may be contested using the appeals process:
- (a) the test or procedure is not medically necessary (whether or not based on carrier medical review policy);
- (b) inappropriate coding practice;
- (c) the test is not recognized as generally accepted medical practice by carrier;
- (d) an assay is arbitrarily defined as screening test; or
- (e) the test is considered a "research" procedure.
- (a) screening tests for asymptomatic patients;
- (b) routine physicals;
- (c) most preventive care; and
- (d) patient-requested tests that the physician knows, or should know, do not meet the Medicare carrier's medical necessity criteria.
STEP 1: Within 6 months of receiving an Explanation of Benefits form, laboratories have the right to request a review by an employee not involved in the original determination. This step requires requesting a review of attached denial(s) and the reason the claim(s) should be paid; this can be done with HCFA form 1964. The carrier must acknowledge the request within 45 days, and the response must come from someone not involved in the original payment determination.
STEP 2: If the result of the carrier review is still unsatisfactory, and the amount in question is at least $100, laboratories may request a fair hearing within 6 months of an adverse review determination.
A detailed letter or HCFA form 1965 should be used. The hearing may be in person or via phone, or can rely only on submitted documents. The carrier must acknowledge the request within 45 days and arrange for the date and time of the hearing. This step provides the opportunity to present the case in person, usually to the Medical Review office and his/her staff.
STEP 3: If the matter is not resolved by the Fair Hearing, and the amount in question is at least $500, one may request a hearing by an administrative law judge within 60 days of an adverse fair hearing determination. The administrative law judge is bound only by Medicare law and regulations, not HCFA's administrative directives to carriers or any individual carrier's interpretation of HCFA policy. The hearing may be in person or via phone. Unsatisfactory determinations by an administrative law judge can be appealed to US District Court for amounts over $1000.
Medicare will only pay for services that it determines to be reasonable and necessary under Section 1862(a) (1) of the Medicare law. If Medicare determines that a particular service, although it would otherwise be covered, is not reasonable and necessary under Medicare program standards, Medicare will deny payment for that service.
I believe that, in your case, Medicare is likely to deny payment for the following service(s) for the reason(s) stated below:
Date of Service
Procedure or Service:
Reason for likely Medicare denial:
I have been notified by my provider that he/she believes in my case Medicare is likely to deny payment for the service(s) identified above, for the reasons stated. If Medicare denies payment, I agree to be personally and fully responsible for payment.
Beneficiary Signature Date.