[Federal Register: November 26, 2004 (Volume 69, Number 227)]
[Rules and Regulations]
[Page 69251-69268]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26no04-30]
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Part V
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 405 and 489
Medicare Program; Expedited Determination Procedures for Provider
Service Terminations; Final Rule
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405 and 489
[CMS-4004-FC]
RIN 0938-AL67
Medicare Program; Expedited Determination Procedures for Provider
Service Terminations
AGENCY: The Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
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SUMMARY: This final rule with comment period responds to comments on
one discrete aspect of the proposed rule published in the Federal
Register on November 15, 2002. The portion of that proposed rule
addressed here involves the expedited determination and reconsideration
procedures available to beneficiaries when a provider informs them of a
decision that Medicare coverage of their provider services is about to
end.
DATES: Effective date: This final rule with comment period is effective
on July 1, 2005.
Comment date: We will consider comments if we receive them at the
appropriate address, as provided below, no later than 5 p.m. on January
25, 2005.
ADDRESSES: In commenting, please refer to file code CMS-4004-FC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (fax) transmission. Submit electronic comments to http://www.cms.hhs.gov/regulations/ecomments or to http://www.regulations.gov.
Mail written comments (one original and three copies) to the following
address only: Centers for Medicare & Medicaid Services, Attention: CMS-
4004-FC, P.O. Box 8016, Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be timely
received in the event of delivery delays.
If you prefer, you may deliver, by hand or courier, your written
comments (one original and two copies) to one of the following
addresses:
Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201, or
Room C5-14-03, 7500 Security Boulevard, Baltimore, MD 21244-1850.
(Because access to the interior building is not readily available to
persons without Federal Government identification, commenters are
encouraged to leave their comments in the CMS drop slots located in the
main lobby of the building. A stamp-in clock is available for persons
wishing to retain a proof of comments being filed.) Comments mailed to
the addresses used for hand or courier delivery may be delayed and
could be considered late.
All comments received before the close of the comment period are
available for viewing by the public, including any personally
identifiable or confidential business information that is included in a
comment. After the close of the comment period, CMS posts all
electronic comments received before the close of the comment period on
its public Web site.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Janet Miller, (410) 786-1588.
SUPPLEMENTARY INFORMATION:
Submitting Comments: We welcome comments from the public on all
issues set forth in this rule to assist us in fully considering issues
and developing policies. You can assist us by referencing the file code
CMS 4004-FC and the specific ``issue identifier'' that precedes the
section on which you choose to comment.
Inspection of Public Comments: Comments received timely will be
available for public inspection as they are received, generally
beginning approximately 3 weeks after publication of a document, at the
headquarters of the Centers for Medicare & Medicaid Services, 7500
Security Blvd., Baltimore, Maryland 21244, Monday through Friday of
each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view
public comments, phone (410) 786-7197.
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.
I. Overview of the Statutory Changes to the Appeals Process
[If you choose to comment on issues in this section, please include the
caption ``Overview--Statutory Changes'' at the beginning of your
comments.]
Section 521 of the Medicare, Medicaid and SCHIP Benefits
Improvement and Protection Act of 2000 (BIPA), Public Law 106-554,
amended section 1869 of the Social Security Act (the Act) to require
significant changes to the Medicare appeals procedures. Among these
changes is a new requirement under section 1869(b)(1)(F) of the Act
that the Secretary establish a process by which a beneficiary may
obtain an expedited determination in response to the termination of
provider services. (Note that other aspects of the changes required
under BIPA 2000 were discussed in detail in our November 15, 2002
proposed rule (67 FR 69312), and will be addressed in a forthcoming
final rule.) Currently this right to an expedited review exists only
with respect to inpatient hospital discharges (under sections 1154 and
1155 of the Act). Specifically, section 1869(b)(1)(F)(i) of the Act
provides for an expedited determination process when a beneficiary
receives notice from a provider of services that the provider plans to:
(1) Terminate services provided to the individual and a physician
certifies that failure to continue services is likely to place the
beneficiary's health at significant risk; or (2) discharge the
beneficiary from the provider of services. The statute mandates that a
beneficiary who receives notice may request an expedited determination
on whether these services should end. If a beneficiary is dissatisfied
with this determination, the beneficiary may request an expedited
reconsideration of this determination. The statute does not specify
what entity must carry out the expedited determination process, but we
intend to contract with the Quality Improvement Organizations (QIOs) in
each State for this purpose. QIOs currently conduct similar expedited
reviews for inpatient hospital discharges.
Section 1869(c)(3)(C)(iii) of the Act sets forth the requirements
for expedited reconsiderations. It specifies that Qualified Independent
Contractors (QICs) conduct expedited
[[Page 69253]]
reconsiderations. This section also states that the QICs must provide
their reconsideration decisions no later than 72 hours after receiving
the appeal request and related medical records. The decisions must be
provided by telephone and in writing to the provider of services, the
beneficiary requesting the appeal, and the attending physician of the
beneficiary. Further, the QIC must solicit the views of the beneficiary
requesting the appeal.
II. Provisions of the Proposed Rule
[If you choose to comment on issues in this section, please include the
caption ``Provisions of Proposed Rule'' at the beginning of your
comments.]
On November 15, 2002, we published a proposed rule in the Federal
Register (67 FR 69312) that set forth proposed regulations for
implementing the changes to the Medicare appeals process required by
BIPA, including both new claims appeal procedures and procedures for
expedited determinations and reconsiderations associated with provider
discharges and terminations of services. This final rule codifies only
those portions (Sec. Sec. 405.1200 et seq.) of the proposed rule that
dealt with expedited determinations and reconsiderations. Thus, this
final rule sets forth the provisions addressing the rights of a
beneficiary who is dissatisfied with a provider termination or
discharge to an expedited determination and reconsideration. The
proposed rule provisions are summarized below, followed by a discussion
of the comments we received on the proposed rule and the changes made
based on those comments.
A. Expedited Determinations (Proposed Sec. 405.1200)
[If you choose to comment on issues in this section, please include the
caption ``Expedited Determinations'' at the beginning of your
comments.]
Under Sec. 405.1200(a), we proposed that the new expedited
determination procedures be applicable to providers listed in section
1861(u) of the Act. We proposed under Sec. 405.1200(b) that in order
for a beneficiary to request an expedited review, the beneficiary must
have received notice that: (1) A provider intends to terminate services
and a physician must certify that termination of services is likely to
place the beneficiary's health at significant risk; or (2) the provider
intends to discharge the beneficiary from an inpatient provider
setting. Rather than establish a notice specifically for this purpose,
we explained that we intended to use advance beneficiary notices (ABNs)
to serve as the appropriate triggers for expedited determinations under
section 1869 of the Act. We stated that we would revisit the content of
the existing ABNs to ensure that they conformed to the requirements of
the proposed rule. (See section III of this preamble for a discussion
of this issue.) We proposed that if a beneficiary does not file a
timely request for an expedited determination, the beneficiary may not
later access this expedited review process.
Under Sec. 405.1200(c), we identified Quality Improvement
Organizations (QIOs) as the appropriate entities to conduct these
expedited determinations of provider terminations. We then proposed the
procedures a beneficiary must follow in order to make a valid request
to a QIO. We specified that beneficiaries may make their request either
in writing or by telephone no later than noon of the day following the
beneficiary's receipt of the provider's notice. Beneficiaries or their
representatives must be available to answer questions by the QIO, upon
request.
Proposed Sec. 405.1200(d) and (e) set forth the procedures that
the QIO must follow when it receives a beneficiary's request for an
expedited determination. The QIO must: (1) Notify the provider of the
disputed services that an expedited determination request has been
made; (2) request the medical record and if necessary, other pertinent
records from the provider; (3) examine the requested necessary medical
information; (4) solicit the views of the provider and the beneficiary;
and (5) make a decision within 72 hours after receipt of the request
for the QIO expedited review. We proposed that the provider be required
to submit the information needed for a QIO determination no later than
close of business on the day after the beneficiary requested an
expedited determination. The QIO must immediately notify the
beneficiary, physician and provider of its expedited determination,
first by telephone and then following up with a written notice that
would explain the decision and inform the beneficiary of his or her
right to an expedited reconsideration.
We proposed under Sec. 405.1200(f) that the QIO's expedited
determination would be binding upon the beneficiary and the provider of
the disputed services or stay, absent a beneficiary's request for a QIC
reconsideration. Proposed Sec. 405.1200(g) discussed the financial
liability aspects of the QIO expedited review process. We proposed that
a provider cannot bill a beneficiary for the disputed stay or services
until the beneficiary has received either an expedited QIO
determination or an expedited QIC reconsideration determination, if
requested. In this situation, if the QIO determines that the services
or stay in dispute were medically necessary, the beneficiary is not
responsible for the services or stay, as stipulated by the QIO.
However, if the QIO determines that the services or stay in dispute
were not medically necessary, the beneficiary is responsible for
services that extend beyond the appropriate covered services or stay,
or as otherwise stated by the QIO.
B. Expedited QIC Reconsiderations (Proposed Sec. 405.1202)
[If you choose to comment on issues in this section, please include the
caption ``Expedited QIC Reconsiderations'' at the beginning of your
comments.]
Consistent with the statute, we proposed that upon receipt of an
expedited determination from a QIO, a beneficiary who is dissatisfied
with that determination may request an expedited QIC reconsideration. A
beneficiary who desires an expedited QIC reconsideration must make that
request no later than noon of the next calendar day following receipt
of the QIO expedited determination. A beneficiary or authorized
representative must be available to talk with the QIC about his or her
case if the QIC solicits the beneficiary's views.
Proposed Sec. 405.1202(c) set forth the procedures that the QIC
must follow in conducting its expedited reconsideration. These are
generally identical to those followed by the QIO except as noted below.
Thus, consistent with section 1869(c)(3)(C)(iii) of the Act, we
proposed that the QIC must make a decision within 72 hours from receipt
of the request for an expedited reconsideration and the requested
information. Unlike for a QIO determination, however, if a QIC does not
render its decision 72 hours from receipt of the request and
information, a beneficiary has the right to have the case escalated to
an Administrative Law Judge (ALJ). Therefore, we proposed that a QIC
must inform the beneficiary of this right, assuming that the amount
remaining in controversy after the QIO's expedited determination was at
least $100.
We proposed under Sec. 405.1202(d) that the QIC's notice of its
expedited reconsideration determination must be issued first by
telephone and then followed up with a written notice to the
beneficiary, provider, and physician responsible for the beneficiary's
care. The written notice would include the detailed rationale for the
decision, a
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statement that explains the beneficiary's subsequent appeal rights (an
ALJ Hearing), and the timeframe for filing for the ALJ hearing request.
The notice should also include a statement explaining the Medicare
payment consequences of the reconsidered determination and the
beneficiary's date of liability. A QIC reconsideration determination is
binding on the beneficiary, subject to an ALJ hearing if the
beneficiary is dissatisfied with the QIC's decision.
We proposed under Sec. 405.1200(f) that a beneficiary may not be
billed for the disputed services or stay until that beneficiary
receives the expedited reconsideration decision from the QIC. (As we
discuss further below, we expect that QICs will be in place at the time
the expedited reviews are available under these regulations. However,
in the event QICs have not been established at the time of
implementation, we believe it would be in the public's interest to
provide for expedited reconsiderations through some other means.
Therefore, if QICs are not in place at time of implementation, QIOs
will carry out this reconsideration function as they do now for
expedited reviews of disputed discharges from inpatient hospitals. As
discussed below, we believe that we have the administrative authority,
for a short period of time, to allow for a reconsideration process that
differs slightly from that imposed under section 1869(c)(3)(C)(iii).)
C. Special Rules for Inpatient Hospital Discharges (Proposed Sec. Sec.
405.1204 and 405.1206)
[If you choose to comment on issues in this section, please include the
caption ``Inpatient Hospital Discharges'' at the beginning of your
comments.]
The proposed regulations for these sections essentially mirrored
the longstanding existing procedures under which QIOs conduct reviews
of disputed discharges from inpatient hospitals. We believe it is
appropriate and convenient to consolidate the procedures for expedited
reviews of all provider service terminations and discharges in one
location in the regulations. The proposed provisions were drawn from
the following sources: section 1154(e) of the Act, Sec. 412.42(c) and
(g), Chapter 414 of the Medicare hospital manual and section 7000 et
seq. of the QIO manual. In proposing to consolidate these provisions,
we made no changes to the substance of existing rules for expedited
initial determinations. We did, however, propose that when a
beneficiary remains an inpatient in the hospital, the expedited
reconsideration process would parallel the process for other types of
provider discharges. See proposed 42 CFR 405.1204(g)(1). This was in
keeping with section 1869(c)(3)(C)(iii), which would now require the
QIC to conduct the reconsideration of hospital discharge
determinations. We recognize that section 1155 of the Act continues to
require QIO reconsiderations of QIO initial determinations. However,
Congress's passage of 1869(c)(3)(C)(iii) supersedes that provision, as
the provisions are inconsistent, and later-enacted provisions are
generally viewed as taking precedence over earlier-enacted provisions.
We do not believe it would be possible for both QIOs and QICs to
simultaneously provide reconsiderations of hospital discharge
determinations. Moreover, section 1869(c)(2) defines a QIC as an
organization ``independent of any organization under contract with the
Secretary that makes initial determinations [under section
1869(a)(1)].'' We therefore believe Congress intended to provide that
reconsiderations of hospital discharges be performed in a similar
manner to other provider discharges, that is by the QIC.
III. Analysis of and Responses to Public Comments on the November 15,
2002 Proposed Rule
[If you choose to comment on issues in this section, please include the
caption ``Analysis and Response to Public Comments'' at the beginning
of your comments.]
We received 39 timely comments on the November 15, 2002 proposed
rule, 6 of which addressed the expedited determination procedures.
These commenters included representatives of provider organizations and
beneficiary advocacy groups. These comments and our responses are
discussed below.
A. Comments on the Expedited Determination Procedures Required by
Section 1869 of the Act
Comment: Several commenters questioned whether ABNs were the
appropriate vehicle for notifying beneficiaries of their statutory
right to an expedited determination. They stated that we would need to
carefully review the existing ABNs to ensure that they provide clear,
adequate notice of this right. One commenter recommended that the
regulations include a specific requirement for providers to provide a
written discharge or termination notice to beneficiaries before
services end. This commenter also noted that a beneficiary should be
entitled to an expedited determination even if he or she does not
receive such a discharge notice. Another commenter noted that there are
significant potential liability implications associated with tying the
expedited determination process to the delivery of the ABN; they
pointed out that shielding beneficiaries from liability during the
review process would require that the ABN be issued up to 5 days before
the scheduled termination of service.
Response: We have carefully reexamined the proposed provisions in
light of these comments, particularly with respect to whether existing
ABNs are the appropriate vehicle for notifying beneficiaries of the
right to an expedited determination when their services are about to
end. As commenters suggested, we have conducted a thorough review of
the existing ABNs that are used in the provider settings and how they
would need to be revised to accommodate the statutory expedited
determination requirements. In addition, we have taken into account the
procedures set forth in our April 4, 2003 (67 FR 16652) final rule that
established a similar expedited review process for Medicare Advantage
(MA) enrollees whose provider services are about to end. The provisions
of the April 4, 2003 final rule were the product of extended
litigation, followed by notice and comment rulemaking, and produced a
largely parallel expedited review process that went into effect for MA
enrollees on January 1, 2004.
Based on this review, we determined that extensive revisions to
several different ABNs, and to the timing of ABN delivery, would be
required if ABNs were to serve as the notice contemplated by the
statute for initiating the expedited determination process. The primary
purpose of all existing provider ABNs is to enable beneficiaries to
make informed decisions as to whether they wish to receive continuing
medical services when a provider believes that the services are
unlikely to be covered by Medicare. Providers may deliver ABNs at any
time before the planned termination of covered services. A beneficiary
who chooses to continue receiving provider services following delivery
of an ABN acknowledges that he or she may be financially liable for the
services. If a beneficiary chooses to accept this potential liability
and continue receiving the services in question, the provider submits a
``demand bill'' to its Medicare claims contractor. Contractors then
process demand bill claims in the same manner that they would process
other manual claims. Also, currently ABNs are not required in every
termination situation
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where a beneficiary may request an expedited determination (for
example, a service termination that is in accordance with an approved
plan of care); conversely, the existing ABN is designed to be delivered
in some situations where expedited determinations are not available
(such as at the outset of services). Thus, we believe that it would not
serve the best interests of either beneficiaries or providers to
attempt to adapt the ABN to meet both its existing purpose and the
purposes of the expedited review process.
Instead, we concluded that that using ABNs to implement the
expedited determinations for original Medicare beneficiaries is
impractical, and that, as a result, several changes are needed to the
proposed regulations. The primary change involves the establishment of
a requirement for a simple, standardized, largely generic notice to
each beneficiary before a discharge or service termination. We believe
that this termination notice will ensure that all beneficiaries know
that Medicare coverage of their provider services is about to end and
are aware of their associated appeal rights. In situations where a
beneficiary chooses to exercise the right to an expedited
determination, a detailed notice similar to the existing ABN will still
be furnished before the termination of services. The detailed notice
will explain how Medicare coverage rules apply in individual
situations, address liability issues, and facilitate the expedited
review process by providing the patient-specific information needed by
both a beneficiary and the QIO conducting the process. Consistent with
the MA program requirements, this two-step notification process should
best meet the needs of the large majority of beneficiaries who need to
know only when coverage of their services will end and what their
appeal rights are, as well as the small minority of beneficiaries who
want more specific information about why their services are ending.
We believe that this approach will alleviate potential beneficiary
and provider confusion and ensure that providers are not faced with
unnecessary administrative burdens. All beneficiaries will receive a
clear, simple notice of the impending end of Medicare coverage of their
provider services and their right to an expedited review of this
decision. Then, as under the existing ABN process, any beneficiary who
objects to the service termination will receive a detailed notice of
the reason for this decision before being deprived of the services in
question. Beneficiaries will receive a binding expedited initial
determination on the coverage of their services no later than 1 day
after the date the services were scheduled to end. This will reduce the
beneficiary's potential liability for any services that are denied on
appeal.
Section 405.1200(b) establishes the requirement for an advance
written notice of termination of Medicare coverage of services in an
HHA, SNF, CORF, or hospice. This section also addresses the timing of
the notice, the required content, and the financial liability
implications. Like in the MA context, providers will be required under
Sec. 405.1200(b)(1) to deliver the termination notice no later than 2
days before the proposed end of covered services. If, in a non-
residential setting, the span of time between services exceeds 2 days,
the provider must notify the beneficiary no later than the next to last
time services are delivered. Also consistent with the parallel MA
regulations, we are including a cross-reference to this notification
requirement in Sec. 489.27(b), the section of the Medicare provider
agreement regulations that sets forth provider notification
requirements.
As a commenter pointed out, the only way to fully ameliorate
financial liability concerns associated with the expedited
determination would be to require a termination notice as much as 5
days before services were to end, and then conduct the review process
during the time span between the notice and the service termination.
However, as we learned in the process of establishing the parallel MA
process, requiring providers to furnish termination notices that far in
advance generally is not practical from a medical decision-making
standpoint. On the other hand, employing the existing ABN process,
which permits ABN delivery at any time before service termination,
would mean that the expedited determination procedures generally would
not even begin until after services had ended. Thus, as discussed in
detail in our April 4, 2003 final rule on expedited determinations
under the MA program (68 FR 16655), we believe that the 2-day advance
notice requirement strikes an appropriate balance between the realities
of medical decision-making practices and the need to ensure that a
beneficiary has an opportunity to an expedited determination while
minimizing financial exposure for either the individual or the
provider.
Section 405.1200(b)(2) describes the required content of the
notice. Unlike an ABN, the initial discharge notice will not include
detailed information about Medicare coverage policies or how they
relate to the individual's particular health needs or conditions. We
recognize that in the vast majority of cases, beneficiaries are in
agreement with their care providers' determinations that Medicare-
covered services should end and that the service termination is
consistent with the plan of care; thus, a more detailed explanation of
the underlying reasons for the termination would serve no purpose and
impose an unnecessary burden on providers. Instead, the only patient-
specific elements of the termination notice will be the beneficiary's
name and the date that coverage of services will end. Other required
elements of the notice, such as a description of the beneficiary's
right to an expedited determination and how to exercise that right,
will constitute entirely standardized information. When a beneficiary
does not object to the termination decision, no further notice is
required. Again, however, if a beneficiary disputes the discharge or
termination of services, the subsequent detailed notice will provide
the critical, patient-specific information relevant to the individual
coverage termination decision. We will develop both of these pre-
termination notices through the Office of Management and Budget's
Paperwork Reduction Act Process.
Section 405.1200(c) establishes that valid delivery of a
termination notice requires that a beneficiary sign the notice. This
requirement codifies longstanding policy for valid ABN delivery and is
consistent with Sec. 422.624(c) of the parallel MA regulations. We
note that the associated provider manual provisions for ABNs and the MA
program permit exceptions to this rule in situations where a
beneficiary refuses to sign a properly delivered notice, and we
incorporate a similar policy into 405.1200(b)(4). As explained in the
April 4, 2003 final rule with comment period (68 FR 16658), if a
beneficiary refuses to sign the notice, the provider may annotate its
notice to indicate the refusal, and the date of refusal is considered
the date of receipt of the notice.
Section 405.1200(d) explains that a provider is financially liable
for continued services until 2 days after valid delivery of the
termination notice or until the service termination date specified on
the notice, whichever is later. This provision serves two purposes.
First, it ensures that a beneficiary has at least 2 days after
receiving a notice before he or she can be liable for additional
services, thus limiting beneficiary liability as the expedited
determination process plays out. In addition, it accommodates
situations where a provider is able to
[[Page 69256]]
identify the service termination date and deliver notice more than 2
days in advance. Under those circumstances, it is possible that the
expedited determination process (and a subsequent discharge, if
applicable) could take place entirely during the period between
notification and the planned service termination date, permitting a
beneficiary to incur no additional liability despite an unfavorable
decision from a QIO.
As noted above, the new process will still rely on a detailed
notice similar to the existing ABN, but only in those instances where a
beneficiary requests an expedited determination. The circumstances in
which this more detailed notice will be required, and the contents of
that notice, are set forth under Sec. 405.1202(f), ``Responsibilities
of Providers.'' The content requirements are very similar to those of
the existing ABN, including a specific and detailed explanation of why
services are no longer considered reasonable and necessary or otherwise
covered by Medicare, a description of applicable Medicare coverage
rules, and any applicable beneficiary-specific information that is
relevant to the coverage determination. As under the MA expedited
review process, this notice will be furnished to both the QIO and the
beneficiary who requested the expedited review since the QIO will need
the information to make its determination and the beneficiary will need
it in order to make an informed decision on whether to introduce any
evidence into the expedited proceedings.
Finally, as explained in the November 15, 2002 proposed rule (67 FR
69337), we agree that if a provider fails to deliver a notice to a
beneficiary, a beneficiary retains the right to an expedited
determination with respect to the discharge. We have made minor changes
to the regulation text that addresses the beneficiary's right to an
expedited determination, to ensure that the right to a determination is
not premised strictly on the delivery of a termination notice, although
we anticipate that this will be the situation in most cases.
As noted at the beginning of this final rule, the effective date
for these new provisions is July 1, 2005. In the interim, we will
obtain public comment on the new provider notices and work closely with
the provider community to make sure that they are aware of their notice
delivery obligations. We also intend to review CMS beneficiary
education materials and conduct beneficiary outreach to inform Medicare
beneficiaries of the right to a review. Finally, we are reviewing both
CMS surveying protocols and QIO review protocols to identify changes
that may be needed to facilitate effective implementation, monitoring,
and enforcement of these requirements.
Comment: Commenters indicated that the organization of the proposed
provisions was confusing and asked for further clarification in the
provisions describing notification to beneficiaries, the procedure for
requesting a determination, and the responsibilities of providers under
the new process.
Response: As explained in the previous response, we have revised
the proposed regulations to incorporate a requirement that providers
routinely notify beneficiaries before discharging them or terminating
covered services. This change necessitated several structural changes
to the proposed provisions, and results in a process that is in most
ways the same as that set forth in the April 4, 2003 final rule on
expedited reviews of provider service terminations (68 FR 16652). Given
these similarities, as well as the comments concerning the lack of
clarity in the proposed rules, we have reorganized the proposed
regulations to address these concerns. We have clarified that the rules
in 405.1200 through 405.1204 apply only to non-hospital providers,
since hospitals have their own special set of rules that apply to them
through the application of section 1869(c)(3)(C)(iii)(III) of the Act,
as well as section 1154(e). Wherever possible, we have adopted the
wording and structure of the parallel MA regulations that describe the
expedited review procedures (Sec. Sec. 422.624 and 422.626), unless
there is a substantive reason to vary from those regulations.
Thus, Sec. 405.1200 describes how and when beneficiaries must be
notified of impending service terminations. Section 405.1202 then
details a beneficiary's right to an expedited determination (paragraph
(a)), how to request a determination (paragraph (b)), rules on when
coverage of provider services ends (paragraph (c)), and on the ``burden
of proof'' for an expedited determination (paragraph (d)), the
procedures a QIO follows (paragraph (e)), a provider's responsibilities
during the review process (paragraph (f)), and the billing limitation
during the review process (paragraph (g)). We believe that this
organizational approach, in combination with the substantive changes
explained above, will produce a clear understanding of the procedural
requirements associated with these provisions.
We note that Sec. 405.1202(d), concerning the ``burden of proof''
during an expedited determination largely consolidates proposed
requirements regarding the information a QIO considers in making its
determination. For example, this section restates the proposed
requirement (previously under proposed Sec. 405.1200(d)(2)) that a
provider must supply the information a QIO needs to makes its
determination, and explicitly acknowledges a beneficiary's potential
role in the process. It is also intended to clarify that it is the
responsibility of a provider, who has an obligation to be familiar with
Medicare coverage rules, to explain its decision that Medicare coverage
is no longer warranted. This is a necessary procedural rule that
reflects the reality that a provider who intends to discharge a
beneficiary or terminate a beneficiary's services must be able to
establish for the record the reasoning behind the discharge or
termination decision. The QIO will then make its determination on the
basis of this record. This provision is not intended to limit the QIO's
discretion in making its determination, nor does it materially change
the provider's role. The provision does not impact the substantive
standards for QIO review and does not imply a working assumption by a
QIO that coverage of care must continue.
In concert with this clarification of the QIO review process, we
have also specified under Sec. 405.1202(e) that the deadline for the
QIO's expedited determination is 72 hours from the receipt of the
request for a review, rather than from the ``receipt of the request for
an expedited determination and the requested information.'' This change
lends a greater degree of certainty to the timing of the process and
thus benefits both providers and beneficiaries. A QIO may delay its
decision if it has not yet received necessary information, but the
provider may be held financially liable for continued services
resulting from the delay. Again, these refinements parallel the
requirements for expedited reviews under the MA program.
Comment: One commenter suggested that the ``timely manner''
requirement (that is, the provision at proposed Sec. 405.1200(b)(2)
that prohibited use of the expedited review process absent a timely
request for review) for beneficiary appeals be more specific. The
commenter also recommended that additional time be available in special
circumstances.
Response: We agree that the provision in question (under proposed
Sec. 405.1200(b)(2)) was unclear. As part of the changes in the
organization of the regulation, we have eliminated the proposed
``timely manner'' reference
[[Page 69257]]
and simply specified under Sec. 405.1202(b)(1) that a beneficiary must
request an expedited determination by noon of the calendar day
following receipt of the discharge notice. We believe that this
deadline allows a beneficiary adequate time to request an expedited
determination, given that a beneficiary need only make a telephone call
to initiate the review process, and there are no financial or
documentation obligations on the part of the beneficiary. The notice
requirements set forth at Sec. 405.1200(b)(2) will ensure that that
each beneficiary will receive a simple discharge notice that will
contain clear, consistent information on their rights and how they may
contact the QIO to request an expedited determination.
We have added a provision to Sec. 405.1202(b)(1) specifying that
if for some reason a QIO is unavailable to receive a beneficiary's
request for an expedited determination, he or she has until noon of the
next day the QIO is available to accept the request to submit the
request for a review. In other situations where a beneficiary fails to
meet the noon deadline for requesting an expedited determination, we
will instruct QIOs, consistent with Sec. 405.1202(b)(4), to accept the
request and notify the beneficiary and the provider of its
determination as soon as possible following receipt of the request.
This is similar to the process now in effect for untimely requests for
a hospital review. However, note that the financial liability
protections of Sec. 405.1202(g) (prohibiting billing during the
expedited appeal process) would not apply. Finally, beneficiaries will
retain the option of receiving services after their scheduled discharge
date, and then accessing the standard claims appeal process for billed
services.
Comment: One commenter questioned whether providers would still be
required to submit bills for appealed services. The commenter noted the
example of a demand bill.
Response: In general, these regulations do not affect a provider's
responsibility to submit bills for beneficiary services, and the usual
requirements for claim submission would continue to apply. However, a
QIO's expedited determination constitutes a binding Medicare
determination as to whether an individual's provider services are
covered. Medicare contractors will be informed of the expedited QIO
determinations in all these situations, and contractors' payment
determinations will reflect the results of the QIO's review, absent
very unusual circumstances (such as an eligibility error). An
individual would retain the right to appeal the contractor's payment
determination through the claims appeal process.
In addition, the ``demand bill'' process will continue to be
available for determinations that are not subject to these procedures,
such as when a provider informs an individual before initiating
services (through an ABN) that the provider does not believe the
services are covered by Medicare.
Comment: Commenters questioned which discharge situations would
provide a beneficiary the right to appeal. Specifically, the commenter
asked if beneficiaries could appeal if their rehabilitation was
discontinued, even as their Part A coverage continued. Another
commenter recommended that we clarify whether reductions in service are
subject to the expedited determination process.
Response: Section 1869(b)(1)(F) of the Act specifies that the right
to expedited proceedings applies to individuals whose services are
terminated by a provider or who are discharged from a provider of
services. We believe it was the intent of Congress to apply these
rights to the traditional provider service settings of SNFs, CORFs,
HHAs, and hospice, rather than to apply these rights more broadly, such
as to stand-alone rehabilitation services furnished by an outpatient
department of a hospital. We note that the proposed rule erroneously
included hospitals in the definition of the providers for which these
expedited determination procedures would apply, although inpatient
hospitals continue to be subject to the existing expedited review
procedures established under section 1154(e) of the Act (and
incorporated into BIPA under the ``Special Rule for Hospitals'' at
section 1869(c)(3)(C)(iii)(III) of the Act), as discussed in the next
section of this preamble.
To clarify these points, we have revised Sec. 405.1200(a)
regarding applicability of the expedited determination procedures to
specify that the new notice and appeal provision apply only to SNFs,
HHAs, CORFs, and hospices, and that they do not include reductions in
services, as discussed below. If a beneficiary continues to receive
Part A services in a skilled nursing facility provider, but some Part B
services have been discontinued, we will consider this to be a
reduction and not a termination of services.
As discussed in the proposed rule, the BIPA requirements concerning
provider notice and expedited determination procedures are not
applicable to reductions in service. The statute specifically refers
only to service termination and discharges, and we do not believe the
authority exists to extend these provisions further. In most settings,
care reductions are a continuing, expected, and generally positive part
of the care delivery continuum. We believe that providing an expedited
appeal right for service reductions would be unwieldy and
inappropriate. However, in no way does this final rule reduce a
beneficiary's existing appeal rights for reduction in care situations.
For example, home health agencies will continue to provide ABNs for
reductions in services that are not consistent with the original plan
of care, and these types of situations will still be subject to the
existing notice and appeal procedures.
Comment: One commenter pointed out an inconsistency between the
summary section of the proposed rule and the proposed regulation text.
Specifically, the commenter noted that hospice providers were not
included in the discussion of those providers affected by the expedited
appeal provisions, but were included in the text of the proposed rule.
Response: In this final rule, we have corrected the inconsistency
regarding hospice providers. Thus, we have continued to specify under
Sec. 405.1200(a) that hospices are considered providers for purposes
of the expedited proceedings provisions. Although we expect situations
where beneficiaries object to their discharge from a hospice to be
rare, these individuals may exercise the right to an expedited
determination. We have also clarified under Sec. 405.1202(a) that,
like beneficiaries who request an expedited determination for
discharges from residential providers, beneficiaries who request an
expedited determination for hospice coverage terminations are not
required to obtain a physician certification that failure to continue
provision of the services will place the individual's health at
significant risk. We believe that the all-inclusive nature of hospice
care is generally akin to a residential setting.
Comment: Two commenters raised questions regarding what triggers a
beneficiary's right to an expedited determination in response to a
provider termination or discharge. They asked for additional
clarification in situations where services are being terminated because
there are no physician's orders or appropriate certifications to
continue care. One commenter suggested that ``technical'' requirements,
such as certification of homebound status for home health patients, be
established before the right to an expedited
[[Page 69258]]
determination can be exercised. The commenter noted that although a
strict reading of the proposed regulations would permit an expedited
determination without these requirements being met, allowing an
expedited review under these circumstances raises important questions
about the provider's authority to continue to deliver care and to be
reimbursed for that care by the Medicare program. Another commenter
recommended that a beneficiary be able to appeal a denied request for
an expedited review.
Response: These comments raise two key issues with respect to both
the availability of the statutory right to an expedited determination
and the appropriate remedy available to a beneficiary who exercises
that right. Section 1869(b)(1)(F) of the Act provides only limited
direction on these issues, specifying that the Secretary must provide
an expedited determination at a beneficiary's written or oral request,
providing that an individual may request an expedited determination
when he or she has received notice that a provider plans: (1) To
terminate services provided to an individual, and a physician certifies
that failure to continue provision of such services is likely to place
the individual's health at significant risk; or (2) to discharge the
individual from the provider of services. Given this construction, we
do not believe it was the intent of Congress to prohibit a beneficiary
from requesting an expedited determination in situations where Medicare
coverage requirements are not met. Thus, Sec. 405.1202(a) of this
final rule essentially establishes that any individual whose Medicare-
covered provider services are being terminated may request an expedited
determination.
We generally do not intend to place restrictions on a beneficiary's
right to request an expedited review when coverage of their provider
services is about to end. In all termination situations where Medicare
coverage requirements are at issue, beneficiaries must receive notice
of the provider's decision to terminate Medicare-covered services and
have an opportunity to dispute the decision if they so choose. The QIO
will then have an obligation to deal with these requests in an
appropriate manner.
A provider cannot be reimbursed for Medicare services unless the
customary Medicare-required elements are in place. These include both
technical requirements (such as the existence of a physician's order
for the services or the requirement that an HHA patient be homebound),
as well as the medical necessity requirement that the services in
question be reasonable and necessary for the given beneficiary under
the given set of circumstances. Even under the existing claims appeals
process a beneficiary typically has the right to appeal a determination
by a contractor that the technical requirements are not in place, and
the beneficiary may prevail in this appeal if he or she can demonstrate
that these requirements were in fact met.
Similarly, we believe that Congress intended that the expedited
determination process offer beneficiaries an opportunity for an
independent review of the provider's decision on the impending coverage
termination. The absence of a physician's order for additional
services, or of a plan of care establishing that a patient is confined
to the home, cannot be used to prove that a patient does not need care.
Instead, the provider must explain to the QIO the reasoning behind the
lack of the Medicare-required elements.
The QIO will consider this and other relevant information in making
its determination, including, where applicable, the physician
certification that failure to continue providing services may place the
individual's health at significant risk. The QIO will be fully aware of
the necessary ``technical'' requirements for coverage and will have the
authority to make a determination both for these threshold coverage
requirements and for whether continued services are reasonable and
necessary for the individual. When a QIO determines that coverage of
care should continue, a provider may rely on the QIO's determination as
dispositive evidence that all needed elements of Medicare coverage are
met and that the care will be reimbursed appropriately by Medicare. No
matter what a QIO's decision on a case, however, an individual will
have an opportunity to request an expedited reconsideration from a QIC.
Comment: One commenter expressed concern about the use of
``calendar days'' in establishing the deadline for a beneficiary to
request an expedited determination. (see proposed Sec.
405.1202(b)(1)). The commenter noted that beneficiaries informed of a
service termination on a Friday or Saturday could encounter
difficulties and would have little access to assistance to make their
request. They asserted that using a next ``working day'' requirement
would be more realistic for the use of QIO resources.
Response: Our experience with deadlines tied to ``working days'' is
that they are often interpreted differently by different entities
involved in the appeals process and consequently tend to add ambiguity
and uncertainty to the process. Our general regulatory approach in
recent years has been to eliminate deadlines based on ``working days''
whenever possible and instead rely on a ``calendar day'' approach. We
believe this measure provides greater clarity and reduces delays and
potential additional liability risks generally associated with
extending deadlines to accommodate the working day approach.
At the same time though, we recognize that there are also problems
associated with the use of calendar days. Although QIOs are expected to
be available to receive requests, notify providers of the requests, and
conduct reviews on a daily basis, providers may have difficulty in
furnishing the necessary records on weekends. Thus, we agree that this
is a valid concern: This is why we have tried to build as much
flexibility as possible into these regulations to help ameliorate
potential problems. For example, these regulations give providers the
flexibility to notify beneficiaries of a planned termination more than
2 days in advance, which can serve both to avoid the need for weekend
notifications and to ensure that the ensuing parts of the expedited
review process (such as providing documentation to QIOs) can be
accomplished during normal working hours. We intend to work with
provider and consumer organization representatives and with the QIOs to
identify ways to reduce the need for a beneficiary to be given notice
on a weekend, as well as to develop uniform procedures to deal with
those relatively infrequent situations where this is unavoidable.
We use ``working days'' in the context of inpatient hospital
discharges because this standard is required by section 1154(e) of the
Act. This section specifically uses the phrase ``working days'' when
establishing deadlines for parties involved in expedited appeals of
hospital discharges.
Comment: One commenter expressed concern with the provider
requirements for submitting medical records during an expedited appeal.
The commenter asked whether the timeframe was realistic, and questioned
how weekends would affect the timeframe.
Response: Under Sec. 405.1202(f)(2), providers are required to
submit records to the QIO by close of business of the day they are
informed by the QIO of the beneficiary's request for an expedited
review. Although we recognize that this is a rigorous standard, we
believe that
[[Page 69259]]
this deadline for provider submission of necessary information is
necessary to carry out Congressional intent for an expedited
determination process without subjecting beneficiaries to unneeded
liability. Therefore, in both our April 4, 2003 final rule and this
regulation, we have revised the appeals process (by adjusting the time
frame for records to be sent to the QIO) to ensure that the process is
completed within 3 days of the notice of termination. The effect of
these changes is that a Medicare beneficiary should face a maximum of 1
day of financial liability if a QIO rules that the disputed discharge
date is appropriate.
We strongly encourage providers to distribute termination notices
as early as possible (that is, as soon as the service termination date
is known) to ameliorate difficulties associated with the need to
furnish records promptly. Similarly, QIOs need to exercise discretion
and good judgment in obtaining needed documentation from providers,
and, as made explicit in the regulations, we anticipate that in some
circumstances QIOs will rely on telephone evidence that can be followed
up with written confirmation. Because we recognize that weekend
discharges may cause difficulties in meeting the record submission
deadlines, we intend to issue further guidance on this issue. Finally,
we note that this documentation deadline is the same as the one
established by section 1154(e) of the Act for QIO reviews of hospital
discharges, and as the deadline established by regulation for expedited
proceedings under the MA program (Sec. 422.626(e)).
Comment: One commenter questioned the consequences of a provider
not submitting requested documentation on time. The commenter
questioned who would be responsible for payment in these instances.
Response: As discussed above, a provider is responsible for
submitting needed documentation to support the termination decision by
close of business of the day following the day it is notified by the
QIO of the request for an expedited determination. If the QIO does not
receive the information needed to sustain a provider's decision to
terminate services, it may make its determination based on the evidence
available, or it may defer a decision until it receives the necessary
information. If a provider does not fulfill this obligation, it may be
liable for any excess continued Medicare coverage of the individual's
provider services due to the provider's delay, as determined by the
QIO. To address this issue, we have set forth these principles in Sec.
405.1202(e)(7), under the procedures the QIO follows in making its
determination.
Comment: One commenter raised the issue of beneficiaries' access to
their own case information. The commenter recommended that the QIO and
provider be required to ensure that all necessary medical and social
service information be available to beneficiaries.
Response: In this final rule, under Sec. 405.1202(f), if a
beneficiary requests an appeal, a provider must present a beneficiary
with a detailed notice that will include an explanation of why services
are no longer needed. This detailed notice will include the specific
information from the beneficiary's situation used to make the discharge
decision. Section 405.1202(f)(3) explicitly establishes that a
beneficiary has the right to request a copy of the information sent by
the provider to the QIO and that the information should be made
available by no later than close of business of the day after the
material is requested. We do not believe this final rule is the
appropriate vehicle to address the availability of social service
information to beneficiaries; these requirements are traditionally
included in the discharge planning conditions of participation for the
appropriate provider.
Comment: Two commenters expressed concern about when beneficiary
liability begins and how beneficiaries will be informed of their
financial liability. They questioned whether QIO notification marks the
beginning of beneficiary liability. They also suggested that
beneficiaries be informed of financial liability through the ``initial
determination''.
Response: Although we are somewhat unclear as to the commenter's
reference to an ``initial determination'' in this context, we fully
agree that a beneficiary must be informed of potential liability as
soon as possible. Therefore, we have required under Sec. 405.1200(b)
that each beneficiary receive a standardized termination notice that
specifies the date on which beneficiary liability begins. This notice
also will inform beneficiaries that financial liability for noncovered
care will exist in unsuccessful expedited review requests. Also, under
Sec. 405.1202(e)(8), the QIO's notice of its determination decision
must inform beneficiaries of the consequences of the QIO decision, such
as the potential liability if they continue services after their
discharge date. We believe these provisions will ensure that all
beneficiaries are fully apprised of their potential financial liability
before and during the expedited determination process.
Comment: One commenter raised issue with the reimbursement rates
for providers whose beneficiaries appeal discharges. The commenter was
concerned that providers were at financial risk because they would be
unable to bill beneficiaries until the expedited QIO determination was
completed. The commenter was also concerned about providers incurring
bad debts from unsuccessful appeals. The commenter suggested that
payment rates to providers with bad debts resulting from unfavorable
QIO decisions be adjusted.
Response: Under Sec. 405.1202(g) and Sec. 405.1204(f), providers
are precluded from billing beneficiaries for disputed services only
during the brief expedited process. Even for expedited proceedings that
include an expedited reconsideration, the entire decision making
process will encompass less than one week from the originally scheduled
discharge. Thus, we do not believe that this final rule will have a
significant effect on providers' financial risk. If providers can
furnish evidence of a pattern of beneficiary failure to pay money due
after an unsuccessful expedited determination request, we will assess
such evidence and related information to determine the appropriateness
of proposing policy changes consistent with existing statutory
authority or seeking legislative changes.
We note that the preclusion on billing pending the expedited
determination is consistent with current procedures for SNFs, under
Sarrassat v. Sullivan, 1989 WL 208444 (N.D. Cal. 1989), aff'd 961 F.2d
217 (9th Cir. 1992). In Sarrassat, the plaintiffs asserted that SNF
beneficiaries were not adequately notified that the SNF believed
Medicare would not cover care, and that beneficiaries were not
permitted to appeal the SNF's assertion to the fiscal intermediary. The
court affirmed a settlement agreement providing that SNFs would be
unable to bill beneficiaries until their initial determination was
complete, a process that is much longer than the expedited proceedings
established under this final rule. Thus, we believe that building this
type of temporary protection from billing into the new expedited
appeals process is an appropriate step, particularly given the short
time periods involved.
Comment: One commenter questioned whether QIO appeal rights would
be included on the Notice of Discharges required by Nursing Home Reform
Law. The commenter also questioned
[[Page 69260]]
whether QIO review is a mandatory or permissive alternative to State
review.
Response: Information about an individual's expedited review rights
will be part of the standardized portion of the provider termination
notice required under this final rule. Although this information may be
furnished through other vehicles as well, we will not deem the
inclusion of the appeal right information on any other notice to
satisfy this regulatory requirement. The QIO expedited review process
implements a Medicare statutory requirement, and we cannot determine
whether States will consider this process an acceptable alternative to
an existing State review requirement.
Comment: One commenter stated that the proposed rule was not clear
with regard to whether particular QIO initial determinations are
subject to redeterminations. They questioned whether the new expedited
determinations were subject to the redetermination rights set forth in
Sec. 405.940 of the proposed rule of November 15, 2002.
Response: QIO expedited determinations are not subject to the
redetermination rights set forth under BIPA and addressed at proposed
Sec. 405.940 of our November 15, 2002 proposed rule. (We note that
section 1869(a)(3)(A) of the Act states that redeterminations must
exist for fiscal intermediary and carrier initial determinations, but
does not discuss QIO initial determinations.) Instead, a beneficiary
may request an expedited reconsideration of that expedited
determination. A beneficiary who misses the deadline for an expedited
reconsideration would retain access to the standard claims appeal
procedures.
Comment: One commenter raised concerns with a cost to the Medicare
program not discussed in the proposed rule. The commenter suggested
that there would be a necessary cost of educating beneficiaries and
providers about their rights and obligations. In particular, the
commenter stated that beneficiaries would need education regarding the
use of ABNs as a part of the appeals system.
Response: We agree that these expedited provisions, as well as all
other aspects of the implementation of BIPA, will require extensive
provider and beneficiary education. We will work to achieve that end.
In addition, as discussed in detail above, a new notice will be used
instead of ABNs to inform beneficiaries of their expedited appeal
rights. We believe that the use of a distinct and standardized notice
will simplify the notification process and promote understanding by
beneficiaries.
Comment: One commenter requested clarification regarding
beneficiary costs for access to medical and other information. They
wanted copying and associated charges to reflect actual expenses.
Response: We agree with the commenter that clarification of
beneficiary charges for documentation is needed and have changed the
regulation text accordingly. Section 405.1202(f)(3) states that a
provider may charge the beneficiary a reasonable amount to cover the
costs of duplicating such documentation or delivering it to the
beneficiary. We note that this requirement is consistent with our
policy for managed care enrollees as contained in our April 4, 2003
final rule (68 FR 16660).
B. Comments on Procedures for Expedited Reviews of Inpatient Hospital
Discharges
As noted above, the proposed rule did not include substantive
changes to the procedures used by QIOs to conduct expedited initial
determinations of disputed hospital discharges, although it did specify
that reconsiderations will be performed by QICs, rather than QIOs. We
continue to believe that incorporating the relevant procedures into the
same regulatory subpart that will contain the expedited determination
procedures for other providers (as well as the new appeals procedures
required under BIPA when they are made final) will prove convenient for
all parties. As a result of the organizational changes to the
requirements for other provider services terminations, the hospital-
related requirements are now set forth at Sec. Sec. 405.1206 and
405.1208. Section 405.1206 sets forth the expedited review procedures
for beneficiary-initiated appeals, and Sec. 405.1208 covers hospital-
initiated appeals. We note that, in keeping with our current policies,
QIO determinations are binding on hospitals, without further appeal,
but beneficiaries may request reconsiderations of unfavorable QIO
decisions. Under our current policies, and consistent with section 1155
of the Act, QIOs, rather than QICs, conduct reconsiderations of
expedited determinations concerning inpatient hospital discharges. As
stated above, we recognize that section 1869(c)(3)(C)(iii)(III)
requires QICs to now perform expedited reconsiderations of expedited
determinations, and we expect that QICs will be fully established by
the date of implementation. However, in the event QICs have not yet
been established at the implementation date, our plan is to have the
QIOs continue to perform the reconsiderations. Since section 1155
already authorizes QIOs to perform reconsiderations, but does not
otherwise govern the process for such reconsiderations, we believe we
will have the authority, until QICs are operational, to allow QIOs to
hear the reconsiderations in accordance with the QIC procedures.
In Sec. Sec. 405.1206 and 405.1208 we continue to cross-reference
the expedited reconsideration process for non-hospital providers. We
believe that Congress' intent in incorporating section 1154(e)(2)
through (4) into section 1869(c)(3)(C)(iii)(III) was to ensure that
statutory time frames and financial liability protections applicable to
QIO reviews of hospital discharges continue to apply. Therefore, we
have continued to apply those financial protections and time frames to
the QIO initial determinations, while creating a uniform process at the
QIC reconsideration stage.
We also recognize that the new QIC reconsideration process for
hospital discharges may now conflict with some of the provisions
governing reconsiderations under 42 CFR part 478. For example, 42 CFR
478.40 requires a $200 amount in controversy for an ALJ hearing,
whereas the QIC reconsideration procedures would require only a $100
amount in controversy. We plan to issue conforming amendments to part
478 in the future to take into account the changes made by BIPA.
However, to the extent there is a direct inconsistency between the part
478 regulations and either the statute or the regulations announced in
this final rule, the statute and the regulations announced by the final
rule would govern.
Only one commenter addressed these provisions.
Comment: One commenter suggested that the hospital discharge review
provisions at proposed Sec. 405.1204(a) define ``inpatient hospital
discharge'', as it applies to these reviews. The commenter asked for a
reference to the Code of Federal Regulation (CFR) or statutory
provision for the definition. The commenter also questioned how
physician concurrence is to be documented and included in the patient
record.
Response: Consistent with Sec. 412.4(a) of the regulations
concerning the inpatient hospital prospective payment system, a
hospital inpatient is considered to be discharged when the patient is
formally released from the hospital. For expedited review purposes, a
discharge does not include a death or a transfer to another hospital.
Hospitals must continue to comply with
[[Page 69261]]
the relevant Medicare conditions of participation under part 482 of the
CFR concerning documentation requirements. We view physician
concurrence as a routine element of the hospital discharge process, and
do not believe any change to the medical records and discharge planning
procedures are warranted.
Comment: The commenter requested specification of how beneficiaries
would receive the notice of non-coverage required under proposed Sec.
405.1204(a). The commenter expressed concern that beneficiaries in
hospitals may be unable to exercise their right to appeal due to their
health condition. The commenter recommended that the regulations
regarding hospital discharge appeals reflect this concern.
Response: The requirements for providing beneficiaries with the
Hospital Issued Notice of Non-coverage (HINN) continue long-standing
practice under the original Medicare program, as discussed in detail in
our April 4, 2003 final rule (68 FR 16660). In brief, hospitals must
issue the ``Important Message from Medicare'' upon admission to all
Medicare inpatients. Hospitals issue HINNs to any beneficiary that
expresses dissatisfaction with an impending discharge, and a hospital
may not bill the beneficiary or his/her representative without issuance
of the HINN. We have added under Sec. 405.1206(b) the requirement that
delivery of a notice of non-coverage is valid only if a beneficiary has
signed and dated the notice to indicate that he or she both received
the notice and understood its contents. This policy is consistent with
our other CMS requirements governing the delivery of similar notices,
such as those set forth in CMS program memoranda A-99-52 and A-99-54
for advanced beneficiary notices under original Medicare. We have no
indication that this standard has proven problematic. Note that this
requirement for successful delivery does not permit a beneficiary to
extend coverage indefinitely by refusing to sign a notice of
termination. If a beneficiary refuses to sign a notice, the provider
can annotate its copy of the notice to indicate the refusal, and the
date of the refusal will be considered the date of receipt of the
notice. This standard has already been articulated in our hospital
manual provisions at section 414.5.
By the time that termination notices are issued, providers will
have already needed to assess a beneficiary's ability to accept
delivery of a notice, based on typical admission assessments, care
planning evaluations and discharge planning activities that have taken
place during the course of treatment. In the event a provider believes
that a beneficiary is not capable to receive the notice, providers must
be well acquainted enough with the beneficiary's particular situation
to make alternative arrangements, if necessary, to deliver a valid
notice. For example, an incapacitated beneficiary is not able to act on
his or her rights and, therefore, cannot validly receive the notice.
This situation can be remedied through the use of an authorized
representative under Federal or State law. This issue is also discussed
in section 414.5 of the Hospital Manual.
Comment: The commenter raised several issues regarding coverage
during review. In particular, the commenter expressed concern with
coverage with the use of calendar days as the standard, and wanted more
specificity for when the beneficiary failed to file timely and
continued their hospital stay.
Response: The provisions at Sec. 405.1206(f), which specify that a
beneficiary is responsible for services furnished after noon of the
calendar day after the beneficiary receives the QIO determination, are
consistent with section 1154(e)(4) of the Act regarding expedited
reviews of inpatient hospital stays. Although the statute refers to
``working days'' for most aspects of this process, it does not use that
terminology in establishing liability; therefore, we believe it is
reasonable to conclude that the calendar days, and not working days,
should be used.
We believe that Sec. 405.1206(e)(3) clearly explains that if a
beneficiary does not make a timely request for an expedited review, the
beneficiary may bear financial liability. That is, the beneficiary may
be responsible for charges beyond the date on the hospital issued
notice of non-coverage (HINN). Again, beneficiaries generally receive a
HINN only when they express dissatisfaction with a hospital's decision
to discharge them from inpatient care.
Comment: The commenter asked whether beneficiaries could face
charges from hospitals for providing medical record data, and what
documentation procedures are associated with notice requirements.
Response: We agree, particularly where notification takes place by
telephone. Hospitals may charge beneficiaries a reasonable amount for
providing them with copies of their medical records. Hospitals may not,
however, charge beneficiaries for providing the medical records to the
QIO or QIC.
IV. Provisions of this Final Rule With Comment Period
A. Summary of Provisions
For the convenience of the reader, listed below are the major
elements of the regulations concerning the new expedited proceedings
that are set forth in this final rule with comment period. This listing
is intended solely as a reference aid rather than as a comprehensive
statement of the policies set forth in the regulation text.
Section 405.1200 describes the applicability of the expedited
determination and reconsideration provisions and establishes an advance
notification requirement for all provider service terminations and
discharges. Section 405.1200(a) specifies that for purposes of these
provisions in 405.1200 through 405.1204, the term provider includes the
non-hospital providers of SNFs, HHAs, CORFs, and hospices. Hospitals
have their own special rules that apply by virtue of section 1154(e) of
the Act, which was incorporated into section 1869(c)(3)(C)(iii)(III) of
the Act.
Section 405.1200(b) sets forth the notification requirement that
applies when a beneficiary's SNF, HHA, CORF, or hospice services are
being terminated. These procedures require that the provider deliver,
generally no later than 2 days before the termination of services, a
standardized notice that informs the beneficiary of the date of
discharge and how to file an appeal.
Section 405.1202(a) describes a beneficiary's right to an expedited
determination of a non-hospital provider's decision to terminate
services.
Section 405.1202(b) explains how a beneficiary must request an
expedited determination: A beneficiary must make a request to the QIO
by no later than noon of the next calendar day following receipt of the
notice of termination. The beneficiary must be available to answer
questions by the QIO and may submit evidence to be used in the
decision-making process.
Section 405.1202(c) and (d) sets forth the coverage rules
associated with the expedited determination process and the procedural
burden of proof rules.
Section 405.1202(e) describes the procedures a QIO must follow from
the time it receives a beneficiary's request for an expedited
determination through the issuance of its decision. These include
immediately informing a provider of a beneficiary's request for an
expedited determination, assessing the validity of the discharge
notice, examining pertinent medical records, offering the beneficiary,
provider, and
[[Page 69262]]
physician an opportunity to present their views, and reaching a
decision and informing the appropriate parties of its decision. All of
these activities must be carried out within 72 hours of the
beneficiary's request for an expedited determination.
Section 405.1202(f) and (g) detail the responsibilities of
providers. Upon learning that a beneficiary has requested an expedited
determination, the provider, by close of business of the day of the
QIO's notification, must send a detailed notice to the beneficiary
containing the reasons why the services are no longer covered and
applicable Medicare coverage rules or policy. Providers may not bill a
beneficiary who has requested an expedited determination for any
disputed services until the expedited appeals process is complete
(including an expedited reconsideration, if applicable).
Section 405.1204 sets forth a beneficiary's right to an expedited
reconsideration by a QIC regarding a QIO expedited determination. This
right is established under Sec. 405.1204(a), and the procedures to be
followed by beneficiaries, the QIC, the QIO, and the provider are
described in the following sections. We believe that QICs will be
operational at the time we implement the reconsiderations established
in this final rule. However, in the event the QICs are not yet
operational at the time of implementation, QIOs will perform expedited
reconsiderations. We believe it would be contrary to the public
interest to delay implementation of these expedited review procedures
until the QICs have been fully established. QIOs are well suited to
administer expedited reconsiderations and currently perform this
function for expedited appeals of inpatient hospital discharges. In
addition, we believe that even had BIPA not been passed, we would have
had the administrative authority to create a procedural rule
establishing a pretermination review process, to be conducted by the
QIOs under sections 1102 and 1154(a) of the Act. If QIOs do perform the
expedited reconsiderations until QICs are established, they will use
the same procedures to be used by QICs, although we would formally view
the process as a process separate from the process fully implementing
BIPA expedited reviews using QICs to process reconsiderations.
Section 405.1206 outlines longstanding procedures regarding a
beneficiary's right to an expedited determination in response to an
inpatient hospital discharge. Consistent with Sec. 1154(e)(4) of the
Act, if a beneficiary files a timely request for such a determination,
the beneficiary is not financially responsible for inpatient hospital
services before noon of the calendar day after receiving the written
expedited QIO determination. Consistent with the statute, we note that
412.42(c)(3) specifies that a hospital cannot charge a beneficiary
until and unless the hospital provides the beneficiary with a notice of
noncoverage.
Section 405.1208 outlines longstanding rules concerning the right
of a hospital to request an expedited QIO review. In short, a hospital
may request QIO review if it believes the beneficiary does not need
further inpatient care but is unable to obtain physician agreement.
B. Decision To Issue a Final Rule With Comment Period
Section 1869(b)(1)(F) of the Act, as revised by section 521 of
BIPA, requires that the Secretary establish a process by which a
beneficiary may obtain an independent, expedited determination if he or
she receives a notice from a provider of services that the provider
plans to terminate the services or discharge the individual from the
provider. Currently, this right to an expedited review exists only with
respect to hospital discharges (under sections 1154 and 1155 of the
Act). In the November 15, 2002 proposed rule we set forth the
procedures needed to implement this statutory directive.
As discussed above, the new expedited review process set forth in
this final rule is closely modeled on the process now in effect for MA
enrollees under our April 4, 2003 final rule. Some commenters on the
November 15 proposed rule recognized the close relationship between the
two processes, and thus, they recommended changes to the proposed rule
notice and appeal procedures that would make the procedures largely
parallel. We strongly agree that making the notice and appeal
procedures available to MA enrollees and original Medicare
beneficiaries as similar as possible is prudent public policy, and will
minimize confusion among beneficiaries and providers as we implement
the new expedited appeal rights for provider service terminations.
However, although the provisions implemented here are clearly a logical
outgrowth of the proposed provisions and the comments on them, some of
the changes are fairly significant, such as the introduction of a
standard coverage termination notice, rather than use of the existing
ABN. Moreover, the public's familiarity with the issues involved here
has now been informed both by this final rule and our April 4, 2003
final rule on the MA process, as well as with actual experience with
the MA process (which began on January 1, 2004). Thus we believe it
would be in the public interest to welcome further comments on the
changes set forth in this final rule. If these comments warrant changes
to these requirements, we will carry out further rulemaking.
V. Response to Comments
Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, 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 the
document.
VI. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 30-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
The PRA exempts the majority of the information collection
activities referenced in this Final Rule with Comment, including
collections associated with SNFs. In addition, 5 CFR 1320.4 excludes
collection activities during the conduct of redeterminations,
reconsiderations, appeals, and other administrative actions. However,
the information collection requirement associated with the initial
request to seek an expedited determination, in a non-SNF setting, is
subject to the PRA.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements:
[[Page 69263]]
Section 405.1200 Notifying Beneficiaries of Provider Service
Terminations
[If you choose to comment on issues in this section, please include the
caption ``Notifying Beneficiaries of Provider Service Terminations'' at
the beginning of your comments.]
For any termination of Medicare-covered services, the provider of
the service must notify the beneficiary in writing of its decision to
terminate services. The provider must use a standardized notice,
required by the Secretary, in accordance with the requirements and
procedures set forth in this section.
Given that CMS has developed standardized formats for these
notices, and notices will be disseminated during the normal course of
related business activities, we estimate that it will take providers
(HHAs, CORFs, and Hospices) 5 minutes to deliver each notice. In 2002,
there were approximately 4.2 million Medicare HHA discharges. (Note
that the amount of Medicare business with CORFs is so small that
Medicare statistical summaries do not include a separate line item for
patient encounters with these facilities. Similarly, while we do not
have precise estimates of hospice discharges, the number is considered
to be an extremely small percentage of the 0.5 million number of annual
hospice patients. Thus, our analysis is necessarily limited to HHA
services.) We estimate that HHA providers will be required to give an
estimated 4.2 million notices to beneficiaries. The total annual burden
associated with this requirement is 350,000 hours.
If you wish to view the proposed standardized notices and the
supporting documentation, you can download a copy from the CMS Web site
at http://www.cms.hhs.gov/regulations/pra/.
Section 405.1202 Expedited Determination Procedures
[If you choose to comment on issues in this section, please include the
caption ``Expedited Determination Procedures'' at the beginning of your
comments.]
A beneficiary who desires an expedited determination must submit a
request for an appeal to the QIO, in writing or by telephone, by no
later than noon of the effective date of the written termination
notice. If, due to an emergency the QIO is closed on the day the
beneficiary requests an expedited determination, the beneficiary must
file a request by noon of the next day that the QIO is open for
business.
The right to an expedited review of the termination of HHA/CORF/
hospice services has never been available to Medicare beneficiaries.
Consistent with our estimate of the proportion of MA enrollees who are
likely to request QIO reviews of HHA/CORF/hospice services, we are
estimating that approximately 1-2 percent of Medicare fee-for-service
beneficiaries who receive termination notices will request an expedited
review. We believe this is a reasonable estimate of the maximum number
of HHA/CORF/hospice enrollees who are likely to file appeals with the
IRE. Thus, we estimate the annual number of fee-for-service reviews at
no more than 2 percent of the approximately 4.2 million HHA/CORF/
hospice discharges (FY 2002 data), meaning that the maximum number of
beneficiaries that are likely to request an expedited determination by
the QIO is about 84,000 annually. It is estimated that it will take
84,000 beneficiaries 15 minutes to file an appeal on an annual basis.
The total annual burden associated with this requirement is 21,000
hours.
The beneficiary may submit evidence to be considered by the QIO in
making its decision and may be required by the QIO to authorize access
to his or her medical records in order to pursue the appeal. It is
likely that no more than 10 percent of the 84,000 beneficiaries who
file appeals will also submit additional evidence. It is estimated that
it will take 8,400 beneficiaries 60 minutes to submit evidence on an
annual basis. That is, since beneficiaries may not be functioning at
their maximum capacity, they may need to contact family members,
friends, or their personal physicians who might provide assistance in
gathering additional evidence. The total annual burden associated with
this requirement is 8,400 hours.
It should be noted that requirements are currently captured and
accounted for in currently approved information collection under OMB
numbers 0938-0045 ``Requirements for Reconsideration for Part A Health
Insurance Benefits''.
If you comment on these information collection and recordkeeping
requirements, please mail copies directly to the following:
Centers for Medicare & Medicaid Services, Office of Strategic
Operations and Regulatory Affairs, Regulations Development and
Issuances Group, Attn: Dawn Willinghan, CMS-4004-FC, Room C5-14-03,
7500 Security Boulevard, Baltimore, MD 21244-1850 and,
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 10235, New Executive Office Building, Washington, DC
20503, Attn.: Christopher Martin, CMS Desk Officer.
Comments submitted to OMB may also be e-mailed to the following
address: e-mail: Christopher_Martin@omb.eop.gov; or faxed to OMB at
(202) 395-6974.
VII. Regulatory Impact Statement
[If you choose to comment on issues in this section, please include the
caption ``Regulatory Impact Statement'' at the beginning of your
comments.]
A. Introduction
We have examined the impact of this rule under the criteria of
Executive Order 12866 (September 1993, Regulatory Planning and Review),
section 1102(b) of the Social Security Act, the Regulatory Flexibility
Act (RFA), Public Law No. 96-354, the Unfunded Mandates Reform Act of
1995, Public Law 104-4, and Executive Order 13132. Executive Order
12866 directs agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). A regulatory impact analysis (RIA) must be
prepared for major rules with economically significant effects ($100
million or more annually). This rule would not meet the $100 million
threshold and therefore is not a major rule. In accordance with the
provisions of Executive Order 12866, this regulation was reviewed by
the Office of Management and Budget.
The RFA requires agencies, in issuing certain rules, to analyze
options for regulatory relief of small businesses. For purposes of the
RFA, small entities include small businesses, nonprofit organizations
and government agencies. Most SNFs and HHAs are small entities, either
by nonprofit status or by having revenues of $25 million or less
annually. For purposes of the RFA, all providers affected by this
regulation are considered to be small entities. Individuals and States
are not included in the definition of a small entity.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis for a final rule that may have a significant
impact on the operations of a substantial number of small rural
hospitals. This 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
[[Page 69264]]
Statistical Area and has fewer than 100 beds.
We are not preparing analyses for either the RFA or section 1102(b)
of the Act because we have determined, and we certify, that this rule
would not have a significant economic impact on a substantial number of
small entities or a significant impact on the operations of a
substantial number of small rural hospitals, since as we explain in C.,
below, we estimate a cost of about $200 a provider. Although a
regulatory impact analysis is not mandatory for this final rule, we
believe it is appropriate to discuss the possible impacts of the new
appeals procedures on beneficiaries and providers, regardless of the
monetary threshold of that impact. Therefore, a brief voluntary
discussion of the anticipated impact of this rule is presented below.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that would include any Federal mandate that may result
in expenditure in any one year by State, local, or tribal governments,
in the aggregate, or by the private sector, of $110 million. This rule
would not have such an effect on State, local, or tribal governments,
or on the private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a rule that would impose
substantial direct requirement costs on State and local governments,
preempts State law, or otherwise has Federalism implications. This rule
does not have a substantial effect on State and local governments.
B. Overview of the Changes
This final rule implements the requirement under section
1869(b)(1)(F) of the Act that a beneficiary has a right to an expedited
determination upon notification by a provider of the provider's
decision to discharge the beneficiary or to terminate services. This
rule specifies that providers (that is, SNFs, HHAs, CORFs and hospices)
must issue a standardized termination notice before all discharges or
service terminations to inform beneficiaries of these new appeal
rights. In general, we believe that these changes will enhance the
rights of Medicare beneficiaries, without imposing any significant
financial burden on these individuals. Most notably, the new
requirements will significantly reduce a beneficiary's potential
liability in situations where disputed provider services are denied on
appeal.
C. Expedited Determination and Reconsideration Procedures for Provider
Terminations (Sec. 405.1200 Through Sec. 405.1204)
We project that providers will be responsible for delivering short
standardized termination notices to approximately 5.3 million
beneficiaries a year. This includes about 1.1 million SNF discharges
and 4.2 million HHA discharges. The required termination notices will
be largely standardized, requiring only the insertion of the
beneficiary's name and discharge date. We estimate that it will take no
more than 5 minutes to deliver a notice, at a per-notice cost of no
more than $2.50 (based on a $30 per hour rate if the notice is
delivered by health care personnel). Based on an estimated 5.3 million
notices annually, we estimate the aggregate cost of delivering these
notices to be roughly $13 million. Given that there are roughly 24,000
affected providers, the average costs associated with this provision
will be less than $600 per provider.
At most, we believe that 2 percent of affected individuals (that
is, 106,000 beneficiaries) will request an expedited determination. For
these 106,000 cases, providers will be required under this final rule
to deliver a detailed termination notice to the beneficiary and to make
a copy of that notice and any necessary supporting documentation
available to the QIO (and to the beneficiary upon request). We estimate
that it will take providers 60 to 90 minutes to prepare the detailed
termination notice and to prepare a case file for the QIO. At an
estimated cost of $30 per hour, we project an aggregate cost of $3.2
million to $4.8 million to approximately 24,000 providers, or about
$200 per provider.
Thus, we believe that the total financial impact of the new notice
and expedited determination requirements is less than $20 million
annually. We do not anticipate that the provisions of this final rule
will have a significant financial impact on individual providers. We
note that both the advance termination notice and the detailed
termination notice will be developed through OMB's Paperwork Reduction
Act process and thus will be the subject of further opportunity for
public comment. The only other significant costs associated with this
provision will result from the Secretary's commitment to contract with
QIOs and QICs to conduct these expedited reviews. We are projecting
first year costs, including training and start costs for QIOs, to the
Medicare Trust Fund of about $32 million to carry out this function.
List of Subjects in 42 CFR Parts 405 and 489
Health facilities, Medicare, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR chapter IV as set forth below:
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
0
1. The authority citation for part 405 continues to read as follows:
Authority: Secs. 1102, 1861, 1862(a), 1869, 1871, 1874, 1881,
and 1886(k) of the Social Security Act (42 U.S.C. 1302, 1395x,
1395y(a), 1395ff, 1395hh, 1395kk, 1395rr and 1395ww(k)), and sec.
353 of the Public Health Service Act (42 U.S.C. 263a).
0
2. Add a new subpart J to read as follows:
Subpart J--Expedited Determinations and Reconsiderations of
Provider Service Terminations, and Procedures for Inpatient
Hospital Discharges
Sec. 405.1200 Notifying beneficiaries of provider service
terminations.
(a) Applicability and scope. (1) For purposes of Sec. Sec.
405.1200 through 405.1204, the term, provider, is defined as a home
health agency (HHA), skilled nursing facility (SNF), comprehensive
outpatient rehabilitation facility (CORF), or hospice.
(2) For purposes of Sec. Sec. 405.1200 through 405.1204, a
termination of Medicare-covered service is a discharge of a beneficiary
from a residential provider of services, or a complete cessation of
coverage at the end of a course of treatment prescribed in a discrete
increment, regardless of whether the beneficiary agrees that the
services should end. A termination does not include a reduction in
services. A termination also does not include the termination of one
type of service by the provider if the beneficiary continues to receive
other Medicare-covered services from the provider.
(b) Advance written notice of service terminations. Before any
termination of services, the provider of the service must deliver valid
written notice to the beneficiary of the provider's decision to
terminate services. The provider must use a standardized notice, as
specified by CMS, in accordance with the following procedures:
(1) Timing of notice. A provider must notify the beneficiary of the
decision to terminate covered services no later than
[[Page 69265]]
2 days before the proposed end of the services. If the beneficiary's
services are expected to be fewer than 2 days in duration, the provider
must notify the beneficiary at the time of admission to the provider.
If, in a non-residential setting, the span of time between services
exceeds 2 days, the notice must be given no later than the next to last
time services are furnished.
(2) Content of the notice. The standardized termination notice must
include the following information:
(i) The date that coverage of services ends;
(ii) The date that the beneficiary's financial liability for
continued services begins;
(iii) A description of the beneficiary's right to an expedited
determination under Sec. 405.1202, including information about how to
request an expedited determination and about a beneficiary's right to
submit evidence showing that services must continue;
(iv) A beneficiary's right to receive the detailed information
specified under Sec. 405.1202(f); and
(v) Any other information required by CMS.
(3) When delivery of the notice is valid. Delivery of the
termination notice is valid if--
(i) The beneficiary (or the beneficiary's authorized
representative) has signed and dated the notice to indicate that he or
she has received the notice and can comprehend its contents; and
(ii) The notice is delivered in accordance with paragraph (b)(1) of
this section and contains all the elements described in paragraph
(b)(2) of this section.
(4) If a beneficiary refuses to sign the notice. The provider may
annotate its notice to indicate the refusal, and the date of refusal is
considered the date of receipt of the notice.
(5) Financial liability for failure to deliver valid notice. A
provider is financially liable for continued services until 2 days
after the beneficiary receives valid notice as specified under
paragraph (b)(3) of this section, or until the service termination date
specified on the notice, whichever is later. A beneficiary may waive
continuation of services if he or she agrees with being discharged
sooner than the planned service termination date.
Sec. 405.1202 Expedited determination procedures.
(a) Beneficiary's right to an expedited determination by the QIO. A
beneficiary has a right to an expedited determination by a QIO under
the following circumstances:
(1) For services furnished by a non-residential provider, the
beneficiary disagrees with the provider of those services that services
should be terminated, and a physician certifies that failure to
continue the provision of the service(s) may place the beneficiary's
health at significant risk.
(2) For services furnished by a residential provider or a hospice,
the beneficiary disagrees with the provider's decision to discharge the
beneficiary.
(b) Requesting an expedited determination. (1) A beneficiary who
wishes to exercise the right to an expedited determination must submit
a request for a determination to the QIO in the State in which the
beneficiary is receiving those provider services, in writing or by
telephone, by no later than noon of the calendar day following receipt
of the provider's notice of termination. If the QIO is unable to accept
the beneficiary's request, the beneficiary must submit the request by
noon of the next day the QIO is available to accept a request.
(2) The beneficiary, or his or her representative, must be
available to answer questions or to supply information that the QIO may
request to conduct its review.
(3) The beneficiary may, but is not required to, submit evidence to
be considered by a QIO in making its decision.
(4) If a beneficiary makes an untimely request for an expedited
determination by a QIO, the QIO will accept the request and make a
determination as soon as possible, but the 72-hour time frame under
paragraph (e)(6) and the financial liability protection under paragraph
(g) of this section do not apply.
(c) Coverage of provider services. Coverage of provider services
continues until the date and time designated on the termination notice,
unless the QIO reverses the provider's service termination decision. If
the QIO's decision is delayed because the provider did not timely
supply necessary information or records, the provider may be liable for
the costs of any additional coverage, as determined by the QIO in
accordance with paragraph (e)(7) of this section. If the QIO finds that
the beneficiary did not receive valid notice, coverage of provider
services continues until at least 2 days after valid notice has been
received. Continuation of coverage is not required if the QIO
determines that coverage could pose a threat to the beneficiary's
health or safety.
(d) Burden of proof. When a beneficiary requests an expedited
determination by a QIO, the burden of proof rests with the provider to
demonstrate that termination of coverage is the correct decision,
either on the basis of medical necessity, or based on other Medicare
coverage policies.
(1) In order for the QIO to determine whether the provider has met
the burden of proof, the provider should supply any and all information
that a QIO requires to sustain the provider's termination decision,
consistent with paragraph (f) of this section.
(2) The beneficiary may submit evidence to be considered by a QIO
in making its decision.
(e) Procedures the QIO must follow. (1) On the day the QIO receives
the request for an expedited determination under paragraph (b) of this
section, it must immediately notify the provider of those services that
a request for an expedited determination has been made.
(2) The QIO determines whether the provider delivered valid notice
of the termination decision consistent with Sec. 405.1200(b) and
paragraph (f) of this section.
(3) The QIO examines the medical and other records that pertain to
the services in dispute. If applicable, the QIO determines whether a
physician has certified that failure to continue the provision of
services may place the beneficiary's health at significant risk.
(4) The QIO must solicit the views of the beneficiary who requested
the expedited determination.
(5) The QIO must provide an opportunity for the provider/
practitioner to explain why the termination or discharge is
appropriate.
(6) No later than 72 hours after receipt of the request for an
expedited determination, the QIO must notify the beneficiary,
beneficiary's physician, and the provider of services of its
determination whether termination of Medicare coverage is the correct
decision, either on the basis of medical necessity or based on other
Medicare coverage policies.
(7) If the QIO does not receive the information needed to sustain a
provider's decision to terminate services, it may make its
determination based on the evidence at hand, or it may defer a decision
until it receives the necessary information. If this delay results in
extended Medicare coverage of an individual's provider services, the
provider may be held financially liable for these services, as
determined by the QIO.
(8) The QIO's initial notification may be by telephone, followed by
a written notice including the following information:
[[Page 69266]]
(i) The rationale for the determination;
(ii) An explanation of the Medicare payment consequences of the
determination and the date a beneficiary becomes fully liable for the
services; and
(iii) Information about the beneficiary's right to a
reconsideration of the QIO's determination, including how to request a
reconsideration and the time period for doing so.
(f) Responsibilities of providers. (1) When a QIO notifies a
provider that a beneficiary has requested an expedited determination,
the provider must send a detailed notice to the beneficiary by close of
business of the day of the QIO's notification. The detailed termination
notice must include the following information:
(i) A specific and detailed explanation why services are either no
longer reasonable and necessary or are no longer covered;
(ii) A description of any applicable Medicare coverage rule,
instruction, or other Medicare policy, including citations to the
applicable Medicare policy rules or information about how the
beneficiary may obtain a copy of the Medicare policy;
(iii) Facts specific to the beneficiary and relevant to the
coverage determination that are sufficient to advise the beneficiary of
the applicability of the coverage rule or policy to the beneficiary's
case; and
(iv) Any other information required by CMS.
(2) Upon notification by the QIO of the request for an expedited
determination, the provider must supply all information that the QIO
needs to make its expedited determination, including a copy of the
notices required under Sec. 405.1200(b) and under paragraph (f)(1) of
this section. The provider must furnish this information as soon as
possible, but no later than by close of business of the day the QIO
notifies the provider of the request for an expedited determination. At
the discretion of the QIO, the provider may make the information
available by phone or in writing (with a written record of any
information not transmitted initially in writing).
(3) At a beneficiary's request, the provider must furnish the
beneficiary with a copy of, or access to, any documentation that it
sends to the QIO including records of any information provided by
telephone. The provider may charge the beneficiary a reasonable amount
to cover the costs of duplicating the documentation and/or delivering
it to the beneficiary. The provider must accommodate such a request by
no later than close of business of the first day after the material is
requested.
(g) Coverage during QIO review. When a beneficiary requests an
expedited determination in accordance with the procedures required by
this section, the provider may not bill the beneficiary for any
disputed services until the expedited determination process (and
reconsideration process, if applicable) has been completed.
Sec. 405.1204 Expedited reconsiderations.
(a) Beneficiary's right to an expedited reconsideration. A
beneficiary who is dissatisfied with a QIO's expedited determination
may request an expedited reconsideration by the appropriate QIC.
(b) Requesting an expedited reconsideration. (1) A beneficiary who
wishes to obtain an expedited reconsideration must submit a request for
the reconsideration to the appropriate QIC, in writing or by telephone,
by no later than noon of the calendar day following initial
notification (whether by telephone or in writing) receipt of the QIO's
determination. If the QIC is unable to accept the beneficiary's
request, the beneficiary must submit the request by noon of the next
day the QIC is available to accept a request.
(2) The beneficiary, or his or her representative, must be
available to answer questions or supply information that the QIC may
request to conduct its reconsideration.
(3) The beneficiary may, but is not required to, submit evidence to
be considered by a QIC in making its decision.
(4) A beneficiary who does not file a timely request for an
expedited QIC reconsideration subsequently may request a
reconsideration under the standard claims appeal process, but the
coverage protections described in paragraph (f) of this section would
not extend through this reconsideration, nor would the timeframes or
the escalation process described in paragraphs (c)(3) and (c)(5) of
this section, respectively.
(c) Procedures the QIC must follow. (1) On the day the QIC receives
the request for an expedited determination under paragraph (b) of this
section, the QIC must immediately notify the QIO that made the
expedited determination and the provider of services of the request for
an expedited reconsideration.
(2) The QIC must offer the beneficiary and the provider an
opportunity to provide further information.
(3) Unless the beneficiary requests an extension in accordance with
paragraph (c)(6) of this section, no later than 72 hours after receipt
of the request for an expedited reconsideration, and any medical or
other records needed for such reconsideration, the QIC must notify the
QIO, the beneficiary, the beneficiary's physician, and the provider of
services, of its decision on the reconsideration request.
(4) The QIC's initial notification may be done by telephone,
followed by a written notice including:
(i) The rationale for the reconsideration decision;
(ii) An explanation of the Medicare payment consequences of the
determination and the beneficiary's date of liability; and
(iii) Information about the beneficiary's right to appeal the QIC's
reconsideration decision to an ALJ, including how to request an appeal
and the time period for doing so.
(5) Unless the beneficiary requests an extension in accordance with
paragraph (c)(6) of this section, if the QIC does not issue a decision
within 72 hours of receipt of the request, the QIC must notify the
beneficiary of his or her right to have the case escalated to the ALJ
hearing level if the amount remaining in controversy after the QIO
determination is $100 or more.
(6) A beneficiary requesting an expedited reconsideration under
this section may request (either in writing or orally) that the QIC
grant such additional time as the beneficiary specifies (not to exceed
14 days) for the reconsideration. If an extension is granted, the
deadlines in paragraph (c)(3) of this section do not apply.
(d) Responsibilities of the QIO. (1) When a QIC notifies a QIO that
a beneficiary has requested an expedited reconsideration, the QIO must
supply all information that the QIC needs to make its expedited
reconsideration as soon as possible, but no later than by close of
business of the day that the QIC notifies the QIO of the request for an
expedited reconsideration.
(2) At a beneficiary's request, the QIO must furnish the
beneficiary with a copy of, or access to, any documentation that it
sends to the QIC. The QIO may charge the beneficiary a reasonable
amount to cover the costs of duplicating the documentation and/or
delivering it to the beneficiary. The QIO must accommodate the request
by no later than close of business of the first day after the material
is requested.
(e) Responsibilities of the provider. A provider may, but is not
required to, submit evidence to be considered by a QIC in making its
decision. If a provider fails to comply with a QIC's request for
additional information beyond that furnished to the QIO for purposes of
the expedited determination, the QIC makes
[[Page 69267]]
its reconsideration decision based on the information available.
(f) Coverage during QIC reconsideration process. When a beneficiary
requests an expedited reconsideration in accordance with the deadline
specified in (b)(1) of this section, the provider may not bill the
beneficiary for any disputed services until the QIC makes its
determination.
Sec. 405.1206 Expedited determinations for inpatient hospital
discharges.
(a) Beneficiary's right to an expedited determination for an
inpatient hospital discharge. A beneficiary who has received a notice
of noncoverage under section 1154(e)(1) of the Act and 42 CFR
412.42(c)(3) may request an expedited determination by the QIO when a
hospital (acting directly or through its utilization review committee),
with physician concurrence, determines that inpatient care is no longer
necessary. A beneficiary who timely requests an expedited QIO review in
accordance with paragraph (d)(1) of this section and who meets the
conditions of section 1879(a)(2) of the Social Security Act (that is,
the individual did not know, and could not reasonably have been
expected to know, that payment would not be made for such items or
services under part A or part B) may remain in the hospital with no
additional financial liability until the QIO makes its determination.
(b) When delivery of the notice is valid. (1) Except as provided in
paragraph (b)(2) of this section, valid delivery of the notice of non-
coverage requires that the beneficiary (or the beneficiary's authorized
representative) has signed and dated the notice to indicate that he or
she has received the notice and can comprehend its contents.
(2) If a beneficiary refuses to sign the notice, the provider may
annotate its notice to indicate the refusal, and the date of refusal is
considered the date of receipt of the notice.
(c) Beneficiary's right to other review. (1) A beneficiary who
fails to request an expedited determination in accordance with
paragraph (d)(1) of this section, and remains in the hospital, may
request an expedited review at any time during the course of his or her
inpatient hospital stay. The QIO will issue a decision in accordance
with paragraph (e)(5)(ii) of this section. The escalation procedures
described in Sec. 405.1204(c)(5) and the financial liability rules of
paragraph (f)(2) of this section do not apply.
(2) A beneficiary who fails to request an expedited determination
in accordance with paragraph (d)(1) of this section, and who is no
longer an inpatient in the hospital, may request QIO review within 30
calendar days after receipt of the notice of noncoverage as provided
under section 1154(e)(1) or at any time for good cause. The QIO will
issue a decision in accordance with paragraph (e)(5)(iii) of this
section. The escalation procedures described in Sec. 405.1204(c)(5)
and the financial liability rules of paragraph (f)(2) of this section
do not apply.
(d) Procedures the beneficiary must follow. For the expedited
appeal process, the following rules apply:
(1) The beneficiary must submit the request for an expedited
determination--
(i) To the QIO that has an agreement with the hospital under part
475 of this chapter;
(ii) In writing or by telephone; and
(iii) By noon of the first working day after he or she receives
written notice that the hospital has determined that the hospital stay
is no longer necessary.
(2) The beneficiary (or his or her authorized representative), upon
request by the QIO, must be prepared to discuss the case with the QIO.
(e) Procedures the QIO must follow. On the date that the QIO
receives the beneficiary's request:
(1) The QIO must notify the hospital that the beneficiary has filed
a request for immediate review.
(2) The hospital must supply any information, including medical
records, that the QIO requires to conduct its review and must make it
available, by phone or in writing, by the close of business of the
first full working day after the day the beneficiary receives notice of
the planned discharge.
(3) The QIO must examine the pertinent records pertaining to the
services.
(4) The QIO must solicit the views of the beneficiary (or the
beneficiary's authorized representative) who requested the expedited
determination.
(5)(i) When the beneficiary requests an expedited determination in
accordance with paragraph (d)(1) of this section, the QIO must make a
determination and notify the beneficiary, the hospital, and physician
of its determination by close of business of the first working day
after it receives all requested pertinent information.
(ii) When the beneficiary does not request an expedited
determination in accordance with paragraph (d)(1) of this section, and
remains an inpatient in the hospital, the QIO will make a determination
and notify the beneficiary, the hospital, and physician of its
determination within 2 working days following receipt of the request
and pertinent information.
(iii) When the beneficiary does not request an expedited initial
determination in accordance with paragraph (d)(1) of this section, and
is no longer an inpatient in the hospital, the QIO will make a
determination and notify the beneficiary, the hospital, and physician
of its determination within 30 calendar days after receipt of the
request and pertinent information.
(f) Coverage during QIO expedited review. (1) In general, if the
beneficiary remains in the hospital after receiving the hospital issued
notice of noncoverage, and the hospital, the physician who concurred in
the hospital's determination on which the advanced written notice of
termination was based, or the QIO subsequently finds that the
beneficiary requires an acute level of inpatient hospital care, the
beneficiary is not financially responsible for continued care until the
hospital once again determines that the beneficiary no longer requires
inpatient care, secures concurrence from the physician responsible for
the beneficiary's care or the QIO and notifies the beneficiary.
(2) Timely filing and limitation on liability. If a beneficiary
both files a request for an expedited determination by the QIO in
accordance with paragraph (d)(1) of this section, and meets the
conditions of section 1879(a)(2) of the Social Security Act (that is,
the individual did not know, and could not reasonably have been
expected to know, that payment would not be made for such items or
services under part A or part B), the beneficiary is not financially
responsible for inpatient hospital services furnished before noon of
the calendar day after the date the beneficiary (or his or her
representative) receives notification (either orally or in writing) of
the expedited determination by the QIO.
(3) Untimely filing. When a beneficiary does not file a request for
an expedited determination by the QIO in accordance with paragraph
(d)(1) of this section, that beneficiary may be responsible for charges
that extend beyond the date specified on the hospital's advance written
notice of termination or as otherwise stated by the QIO.
(4) Hospital requests expedited review. When the hospital requests
review in accordance with Sec. 405.1208, and the QIO concurs with the
hospital's decision, a hospital may not charge a beneficiary until the
date specified by the QIO.
(g) Notice of an expedited determination. (1) When a QIO issues an
expedited determination in accordance with paragraph (e)(5) of this
section, the
[[Page 69268]]
QIO must notify the beneficiary, physician, and hospital of its
decision, by telephone and subsequently in writing.
(2) A written notice of the expedited determination must contain
the following:
(i) The basis for the determination;
(ii) A detailed rationale for the determination;.
(iii) A statement explaining the Medicare payment consequences of
the expedited determination and date of liability, if any;
(iv) A statement informing the beneficiary of his or her subsequent
appeal rights, and the timeframe for requesting a reconsideration by
the QIC.
(h) Effect of an expedited QIO determination. The QIO determination
is binding upon the beneficiary, physician, and hospital, except in the
following circumstances:
(1) When beneficiary remains in the hospital. If the beneficiary is
still an inpatient in the hospital and is dissatisfied with the
determination, he or she may request a reconsideration according to the
procedures described in Sec. 405.1204. If the beneficiary does not
make a request in accordance with paragraph (d)(1) of this section, the
timeframes described in Sec. 405.1204(c)(3), the escalation procedures
described in Sec. 405.1204(c)(5), and the coverage rule described in
Sec. 405.1204(f) will not apply.
(2) When beneficiary is no longer an inpatient in the hospital. If
the beneficiary is no longer an inpatient in the hospital and is
dissatisfied with this determination, the determination is subject to
the general claims appeal process.
Sec. 405.1208 Hospital requests expedited QIO review.
(a) General rule. If the hospital (acting directly or through its
utilization review committee) believes that the beneficiary does not
require further inpatient hospital care but is unable to obtain the
agreement of the physician, it may request an expedited determination
by the QIO.
(b) Procedures hospital must follow. (1) The hospital must (acting
directly or through its utilization review committee) notify the
beneficiary (or his or her representative) that it has requested that
review.
(2) The hospital must supply any pertinent information the QIO
requires to conduct its review and must make it available by phone or
in writing, by close of business of the first full working day
immediately following the day the hospital submits the request for
review.
(c) Procedures the QIO must follow. (1) The QIO must notify the
hospital that it has received the request for review and must notify
the hospital if it has not received all pertinent records.
(2) The QIO must examine the pertinent records pertaining to the
services.
(3) The QIO must solicit the views of the beneficiary in question.
(4) The QIO must make a determination and notify the beneficiary,
the hospital, and physician within 2 working days of the hospital's
request and receipt of any pertinent information submitted by the
hospital.
(d) Notice of an expedited determination. (1) When a QIO issues an
expedited determination as stated in paragraph (c)(4) of this section,
it must notify the beneficiary, physician, and hospital of its
decision, by telephone and subsequently in writing.
(2) A written notice of the expedited initial determination must
contain the following:
(i) The basis for the determination;.
(ii) A detailed rationale for the determination;
(iii) A statement explaining the Medicare payment consequences of
the expedited determination and date of liability, if any; and
(iv) A statement informing the beneficiary of his or her appeal
rights and the timeframe for requesting an appeal.
(e) Effect of an expedited determination. The expedited
determination under this section is binding upon the beneficiary,
physician, and hospital, except in the following circumstances:
(1) When a beneficiary remains in the hospital. If the beneficiary
is still an inpatient in the hospital and is dissatisfied with this
determination, he or she may request a reconsideration according to the
procedures described in Sec. 405.1204. The procedures described in
Sec. 405.1204 will apply to reconsiderations requested under this
section. If the beneficiary does not make a request in accordance with
paragraph (d)(1) of this section, the timeframes described in Sec.
405.1204(c)(3), the escalation procedures described in Sec.
405.1204(c)(5), and the coverage rule described in Sec. 405.1204(f)
will not apply.
(2) When a beneficiary is no longer an inpatient in the hospital.
If the beneficiary is no longer an inpatient in the hospital and is
dissatisfied with this determination, this determination is subject to
the general claims appeal process.
PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL
0
Part 489 is amended as set forth below:
0
1. The authority citation for part 489 is revised to read as follows:
Authority: Secs. 1102, 1819, 1861, 1864(m), 1866, 1869, and 1871
of the Social Security Act (42 U.S.C. 1302, 1395i-3, 1395x,
1395aa(m), 1395cc, 1395ff, and 1395hh).
0
2. Section 489.27(b) is revised as follows:
Sec. 489.27 Beneficiary notice of discharge rights.
* * * * *
(b) Notification by other providers. Other providers that
participate in the Medicare program must furnish each Medicare
beneficiary, or authorized representative, applicable CMS notices in
advance of the termination of Medicare services, including the notices
required under Sec. Sec. 405.1202 and 422.624 of this chapter.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: December 23, 2003.
Dennis G. Smith,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: July 12, 2004.
Tommy G. Thompson,
Secretary.
Editorial note: The Office of the Federal Register received this
document on November 19, 2004.
[FR Doc. 04-26133 Filed 11-24-04; 8:45 am]
BILLING CODE 4120-01-P