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Is no notice enough notice
Legal principles require that the government
afford certain procedures (known as “due
process”) before depriving individuals of
important life, liberty, or property interests.
Among those procedures is the right to
receive adequate notice before the government
undertakes to deprive an individual of
one of these protected interests. Providers’
and suppliers’ right to receive reimbursement
from the Medicare program is arguably one of
the important property interests to which the
protections of due process apply, especially
when providers or suppliers have already
performed the services for which they are
being denied payment. It is for this reason
that Medicare and its contractors are subject
to strict rules requiring that proposed NCDs
and LCDs be published before they become
effective.
Notice of this sort should also be required in
the case of individual claim determinations.
Providers and suppliers have an important
property interest at stake, that being their
right to reimbursement by the Medicare program,
at least for services which have already
been performed. They should not be deprived
of that right without adequate notice of the
information and evidence a contractor will
use in making coverage determinations.
Adequate notice would allow providers and
suppliers to make informed recommendations
to beneficiaries and adjust their treatment
options accordingly.
Instead, it appears that Medicare contractors
and adjudicators are systematically denying
claim reimbursement to providers and
suppliers, whose remuneration and benefits
under the Medicare program will be affected,
without adequate notice of the kinds of evidence
they use to make those determinations.
The notice problem is magnified when the
type of authority contractors and adjudicators
may use includes Internet Websites, because
of the vast amount of information available
on-line. It is unreasonable to charge providers
and suppliers with a duty of knowing which
information on what Websites that Medicare
will use to support its coverage and medical
necessity determinations.
Medicare’s vague or non-existent coverage and
medical necessity standards and inadequate
guidance in making individual claim determinations
ultimately threaten providers’ and
suppliers’ ability to practice and earn income.
Without meaningful standards and useful,
reliable, and consistent guidance, providers
and suppliers are often left with no choice
but to assume the risk of non-payment if a
contractor or adjudicator deems the item or
service not to be covered, or worse still, not
furnish the item or service at all. Beneficiaries
also have an interest in access to clear
information regarding what the Medicare
program will cover to foster confidence in
the health care system and to allow informed
decision-making on their part.
Limitations on liability
The Medicare Act provides financial relief to
providers and suppliers by permitting Medicare
to make payment for items and services
for which Medicare payment would otherwise
be denied in instances where the provider or
supplier knew, or could reasonably have been
expected to know, that the items or services
were not covered. These rules are known
as the “limitation on liability” provisions.
Medicare contractors determine whether the
provider or supplier had prior knowledge
that services or items would likely be denied
or whether knowledge reasonably could have
been expected.
Aside from having received notice from
Medicare (in the form of either actual written
notice to the provider or supplier, or manual
instructions, bulletins, directives, etc.) that
the same or similar items or services are
not covered, the only other evidence of a
provider’s or supplier’s fault that a contractor
can consider is the provision of items
and services in a manner “inconsistent with
acceptable standards of practice in the local
medical community.” Medicare policy states
that “acceptable standards of practice in the
medical community” are determined by
looking to:
published medical literature, a consensus
of expert medical opinion, and consultations
with their medical staff, medical
associations, including local medical societies,
and other health experts. “Published
medical literature” refers generally to
scientific data or research studies that have
been published in peer-reviewed medical
journals or other specialty journals that
are well recognized by the medical profession,
such as the New England Journal
of Medicine and the Journal of the
American Medical Association. 4
Providers or suppliers who are found at fault
under the limitation on liability provisions
may appeal that determination. Those whose
individual claims have been denied based
on evidence from Internet Websites (in the
absence of formal written policy) and who
did not receive any other form of written
notice from Medicare that the same or similar
claims were not covered, may have a good
argument that their fault determination
should be reversed. In order to argue this successfully,
the on-line information referenced
in a contractor’s notice of decision cannot be
material reprinted from a source which could
be considered “published medical literature.”
In addition, providers or suppliers should
be prepared to present evidence, perhaps by
medical associations or health experts, that
the consensus of medical opinion and/or
Health Care Compliance Association • 888-580-8373 • www.hcca-info.org
25
October 2008