CMS ruling 1455: Administrative law judge response

The job of handling denials and appeals has become more complicated after the CMS Ruling 1455 was published on March 13, 2013.  The Administrative Law Judges (ALJs) did not take long to respond and add additional complexities to the process.  

Through our work of appealing cases for our clients we received correspondence from an ALJ addressing the impact that CMS 1455 has on cases already a part of the “heavy and ever-expanding caseload of appeals.”  The letter (attached on page 2 of the newsletter) states that the case referenced in the letter would not be scheduled for hearing and decision until last quarter of fiscal year 2014.  It went on to say that many of the cases being received would not be heard until the first and second quarter of 2015.

In a sense the letter “encourages” hospitals to rebill rather than go through the appeals process due to the anticipated time delay of when the cases will be heard.  The ALJ lays out the requirements to rebill for Part B coverage and payment stating that the appellant must:

1) dismiss its pending appeal before a Medicare contractor; or

2) withdraw its request for an Administrative Law Judge hearing; or

3) withdraw its appeal to the Medicare Appeals Council; or

4) allow the last determination to become final and binding.

The letter states that “your appeal will not be prejudiced in any way based on your decision” regarding the appeal.  A Withdrawal of Request for and Administrative Law Judge Hearing form was attached for convenience.

If the decision is made to move forward with the appeal the ALJ also attached to the letter an Order for Claim Information which requires the following information to be provided for the cases:

  • Diagnosis Related Group code claimed, Medical or Surgical DRG
  • Secondary Diagnosis codes including WCC,  CC, or non-CC
  • Principle Procedure Resource Utilization Code
  • Secondary Procedure Resource Utilization Codes
  • Relative weight of claimed DRG
  • Geometric Mean Length of Hospital Stay
  • Arithmetic Mean Length of Hospital Stay
  • Is this an outlier claim?
  • From the medical record, please note:

▪     Date and hour of inpatient admission

▪     Date and hour of inpatient discharge

▪     Total hours spent in inpatient status

▪     Acute or exacerbation of Secondary Diagnosis condition and treatment codes

▪    Resource Procedure Utilization Codes provided while inpatient: (Please note date and time)

The challenge for hospitals is multi-faceted.  The hospital must first review cases that are currently in the appeals process and evaluate the risk/benefit of continuing.  Is it better to rebill for the eligible Part B services or move forward with the appeal either on the merit of the clinical facts or waiver of liability?  Although it appears that the ALJs are pressuring hospitals to withdraw appeals if the case should have been paid as billed hospitals should continue the course.

Next, the hospitals are advised to review cases that are not being appealed but are within the filing limit to determine if a rebill is appropriate.  These could be cases that you felt were weak or had documentation in the medical record that did not clearly support the billed level of care.  For these cases it is good to prepare to rebill.  It is better to get at least the Part B services reimbursed since the services were rendered but outpatient setting or level may have been appropriate.

It is important to monitor the timing of the proposed ruling 1455. Once it goes into effect the timely filing limits will be more restrictive than is required under the current ruling.  Over the next few months it is critical to understand the cases that may be at risk when the proposed ruling is effective.  It is also important to send comments to CMS with your questions and concerns about the proposed ruling.  Comments will be accepted until May 17, 2013 at 5:00 pm EST.

As new developments arise, MedManagement will continue to monitor and inform you.

If you have questions, please contact Ann M. Purdy at or call 205-314-8859.

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