Click here to view a chart, reproduced from CMS's November 15, 2002 proposed rule, that compares the old and new claims appeal mechanisms.

Implementation Schedule
BIPA requires that all of its section 521 provisions are to be applicable to initial determinations made on or after October 1, 2002. However, CMS asserted in an October 7, 2002 Federal Register notice that it intends to implement only three of the section 521 changes timely. 67 Fed. Reg. 62,478. CMS asserted that all other provisions must go through notice and comment procedures, and that it must ensure appropriate structures and resources are dedicated to the BIPA requirements before the provisions can be put into place. It further instructed contractors not to implement the section 521 provisions, other than the three discussed below, until further notice from CMS. The provisions CMS intends to implement for initial determinations made on or after October 1, 2002 are:

1. 120-day deadline for filing requests for redeterminations of initial determinations: This creates the same deadline for Part A and Part B requests. It has the effect of increasing the previous 60-day deadline for Part A appeals, but decreasing the previous 180-day deadline for Part B appeals. CMS stated in its October 7, 2002 Federal Register notice that it will, however, allow 60-day extensions of the 120-day period for Part B claims when a patient, provider, or supplier requests extra time necessary to gather supporting records.
2. Reduced $100 AIC threshold for requesting an ALJ hearing: This has the effect of maintaining the same AIC for Part A appeals, but decreasing the AIC for Part B appeals from $500 and for quality improvement organizations (QIOs) (formerly peer review organizations) from $200. The pre-BIPA rules regarding aggregation of claims to meet the AIC threshold will continue until new rules implementing BIPA are finalized.
3. Contractor's review before appeal and no redetermination by individual involved in the initial determination: The third so-called new provision CMS is implementing is already in place. That provision incorporates the policy that a contractor's review of the initial determination must precede a higher level of appeal and that no redetermination may be made by an individual involved in the initial determination.

Proposed Rules
CMS proposed rules implementing section 521 of BIPA on November 15, 2002. 67 Fed. Reg. 69,312. The rules would implement the new mechanism outlined in the chart, which was published as part of the rules. The proposed rules were substantial and detailed. Some areas of particular interest that are not included in the chart are discussed below.

Reopenings
Reopenings may be made by a CMS contractor, QIC, ALJ, or the Medicare Appeals Council (MAC). The proposed rules strongly favor reopenings against providers and extend the time limits for reopenings beyond what is reasonable in expecting finality to these determinations. For example, the proposed rules would allow reopenings:

• Within one year of the decision for any reason when initiated by a contractor or requested by a party.
• Within four years of the decision for good cause when initiated by a contractor or requested by a party. Good cause is defined as new and material evidence that was not available or known at the time of the decision and may result in a different conclusion, or evidence that was considered in making the decision clearly shows on its face that an obvious error existed at the time the decision was made. § 405.986(a). No good cause will be found if the only reason given is a change in substantive law or interpretive policy. § 405.986(b).
• Within five years of the decision when initiated by the contractor, where the contractor discovers a pattern of billing errors or identifies an overpayment extrapolated from a statistical sampling. (Note: No allowance for a pattern of underpayment.)
• At any time where there is reliable evidence that the initial determination was procured by "fraud or similar fault" when initiated by a contractor. The rule states that "similar fault" means to obtain, retain, convert, seek, or receive Medicare funds to which a person knows or should reasonably be expected to know one is not legally entitled, which includes failure to demonstrate the filing of a proper claim.

Expedited Appeals Process (EAP)
This process would allow parties to skip over certain appeal levels and go directly to court, where the party asserts that the decision-maker is bound by certain authority which is invalid.

A party could request court review in place of an ALJ hearing or MAC review if the amount in controversy is at least $1,000, and all parties concur in the request. The request for expedited review must allege that there is no material issue of fact in dispute and that the only factor precluding a decision favorable to the requester is a statutory provision that is unconstitutional or a regulation, national coverage decision, or CMS ruling that is invalid.

Escalation
The new rules would permit a party to escalate the appeal to the next level if the decision-maker did not act timely. Escalation is permitted only where a QIC, ALJ, or MAC does not timely issue its decision. If escalation is not requested, it will remain with the decision-making entity.

As CMS urges, a party should consider whether escalation is in its best interest before such a request is made. Since different procedures apply at each step of the appeals procedure, thought should be given to the type of review that is best to resolve the case. Escalation of a case from the QIC to the ALJ level will result in the loss of the benefit of a review by health care professionals that the QIC provides. Escalation of a case from the ALJ to the MAC level will result in the loss of the right to an oral hearing to explain one's case. Escalation will result in the waiving of the right to obtain a decision within the usual statutory deadline at the next level. Neither CMS nor its contractors, which may become party to a case at the ALJ level, are permitted to request escalation.

Expedited Determinations and Reconsiderations
BIPA significantly changes the existing procedures available to beneficiaries to contest provider decisions to terminate care. Historically, beneficiaries have had a right to obtain expedited review by a QIO where the beneficiary disagrees with a hospital's decision to discharge the beneficiary. Under BIPA, expedited determinations and reconsiderations apply to terminations of services furnished by a nonresidential provider and the discharge of a beneficiary from a residential provider of services. CMS asserts in the preamble to the regulations that termination of services would not include a reduction in an ongoing course of services. 67 Fed. Reg. at 69,336. This is arguably inconsistent with BIPA, which requires expedited proceedings addressing a provider's plan "to terminate services."

Section 522: National and Local Coverage Determination Appeals
BIPA section 522 creates a new process for challenges to national coverage determinations (NCDs) and local coverage determinations (LCDs). The appeals process is separate and apart from the individual claims appeals process established by section 521.

Highlights
Some of the more notable changes BIPA section 522 makes to the NCD and LCD appeals process are as follows:

• Only beneficiaries who are "in need" of a particular item or service may appeal an NCD or LCD.
• The appeal must be taken before the item or service in need has been provided. If the item or service has been provided, appeal must be taken pursuant to section 521.
• Appeals of NCDs are conducted by the HHS Departmental Appeals Board (Board).
• Appeals of LCDs are conducted by an ALJ of the Social Security Administration (SSA).
• Decisions of the Board and ALJs are subject to judicial review.

Implementation
BIPA requires implementation of section 522 by October 1, 2001. However, CMS, in a September 28, 2001 ruling, directed Medicare contractors not to act on complaints challenging LCD/NCDs until CMS publishes final rules. Ruling No. 01-01.

Proposed Rules
CMS proposed new rules to implement BIPA section 522 on August 22, 2002. 67 Fed. Reg. 54,534. Some areas of particular interest are discussed below.

Burden and Standard of Review
The beneficiary bears the burden of proof to establish its position by a preponderance of the evidence.

The ALJ or Board must uphold the LCD or NCD as valid, if the findings of fact, interpretations of law, and applications of fact to law by CMS or the contractor are reasonable based on the NCD or LCD record.

Review of LCDs and NCDs
The process for review of NCDs is largely the same as for LCDs, with the following major exceptions:

• NCDs may be based on other statutory provisions, not just section 1862(a)(1)(A) (reasonable and necessary provisions) of the Act.
• NCD reviews are conducted by the Board, while LCDs are conducted by an ALJ.
• Neither ALJs nor contractors participate in any way in the NCD review.
• CMS is always a party in an NCD review.
• The process of taking an NCD out of effect is different than that of an LCD being retired.
• Board NCD decisions will be available in a searchable format on Medicare's Internet site.
• LCD decisions by an ALJ are appealable to the Board by an aggrieved party, CMS, or its contractors; NCD decisions by the Board may be challenged only by an aggrieved party, not CMS or its contractors, in federal court.