[Federal Register Volume 60, Number 131 (Monday, July 10, 1995)]
[Proposed Rules]
[Pages 35544-35548]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16807]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 405

[BPO-121-P]
RIN 0938-AG48


Medicare Program; Telephone and Electronic Requests for Review of 
Part B Initial Claim Determinations

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would allow beneficiaries, providers, and 
physicians (and other suppliers), who are entitled to appeal Medicare 
Part B initial claim determinations, to request a review of the 
carrier's initial determination by telephone or electronic 
transmission. (Currently, a request for review may be made only in 
writing.) Allowing the use of telephone and electronic requests would 
expedite the review process by supplementing, not replacing, the 
current review procedures. It would also improve carrier relationships 
with the provider and beneficiary communities by providing quick and 
easy access to the appeals process. (This rule would not provide for 
telephone or electronic requests for review of Part B initial 
determinations made by Peer Review Organizations and Health Maintenance 
Organizations.)

DATES: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on 
September 8, 1995.

ADDRESSES: Mail written comments (1 original and 3 copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: BPO-121-P, P.O. Box 26688, 
Baltimore, MD 21207.
    If you prefer, you may deliver your written comments (1 original 
and 3 copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., 
Washington, DC 20201, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code BPO-121-P. Comments received timely will be available for 
public inspection as they are received, generally beginning 

[[Page 35545]]
approximately 3 weeks after publication of a document, in Room 309-G of 
the Department's offices at 200 Independence Avenue, SW., Washington, 
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. 
(phone: (202) 690-7890).
    For comments that relate to information collection requirements, 
mail a copy of comments to: Allison Herron Eydt, HCFA Desk Officer, 
Office of Information and Regulatory Affairs, Room 10235, New Executive 
Office Building, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Rosalind Little, (410) 966-6972.

SUPPLEMENTARY INFORMATION:

I. Background

    Under current Medicare regulations, if a party indicates 
dissatisfaction with a Part B initial determination on a claim, either 
a review is made in accordance with regulations set forth in 42 CFR 
405.807 (Review of initial determination) and section 12010 of the 
Medicare Carriers Manual (effective October 1990) or the request is 
dismissed if the appellant is not a proper party. (``Party'' is defined 
at Sec. 405.802 as a person enrolled under Part B of title XVIII, his/
her assignee, or other entity having standing in the initial or 
appellate proceedings.)
    Section 405.807 sets forth the review process to be followed by a 
party who is dissatisfied with an initial determination by a carrier. A 
party is currently required to file a written request for review of the 
initial determination with the carrier, the Social Security 
Administration, or HCFA within 6 months after the date of the notice of 
the initial determination. The carrier may, upon request by the party, 
extend the time period to file a request for review if it finds the 
party had good cause for failing to request a timely review. The 
review, an independent reexamination of the entire claim, is performed 
by carrier staff who played no part in making the initial 
determination.
    ``Supplier'' is defined at Sec. 400.202 as a physician or other 
practitioner, or an entity other than a ``provider,'' that furnishes 
health care services under Medicare. Although ``supplier'' encompasses 
physicians, for clarity in this document, we refer to both 
``physicians'' and ``suppliers''.
    ``Provider'' is defined at Sec. 400.202 as a hospital, a skilled 
nursing facility, a comprehensive outpatient rehabilitation facility, a 
home health agency, or a hospice, that has in effect an agreement to 
participate in Medicare, or a clinic, a rehabilitation agency, or a 
public health agency that has a similar agreement but only to furnish 
outpatient physical therapy or speech pathology services.
    Under section 1879(d) of the Social Security Act (the Act), a 
provider, or a physician or other supplier that accepts assignment to 
furnish services to Medicare beneficiaries has the same appeal rights 
as an individual beneficiary under certain limited circumstances if the 
issue in dispute involves medical necessity or custodial care or home 
health denials involving the failure to meet homebound or intermittent 
skilled nursing care requirements. Additionally, regulations at 42 CFR 
part 405, subpart H (Appeals Under the Medicare Part B Program) provide 
that a supplier or physician that has taken assignment of a Part B 
Medicare claim has the same appeal rights as the beneficiary.

II. Proposed Changes to the Procedures for Requesting a Review

    We propose to change the Medicare regulations at Sec. 405.807 to 
allow a party to request a review of a Part B initial claim 
determination by telephone or by electronic transmission, in addition 
to the current provisions for a written request. The term ``electronic 
transmission'' would refer to tape-to-tape, disk-to-disk, or any other 
HCFA-approved electronic media form for electronic transmission. Fax 
machine transmissions would not be considered ``electronic 
transmissions.'' We have included in this section proposed methods for 
allowing parties to request a review by telephone or electronic 
transmission.

A. Telephone Requests for Review

    The notice accompanying the carrier's initial determination, which 
explains how to initiate a request for review, would include the 
telephone number designated by the carrier for making review requests. 
If an appellant initiates a request for review by telephone, the 
carrier would assign the request a confirmation number. During the 
telephone discussion, the appellant would be given the confirmation 
number and the name of the person who received his or her telephone 
request. It is important that the confirmation number be kept by the 
party requesting a review. If it is unclear to the carrier that a 
request was filed or filed timely, the confirmation number would assist 
the carrier in locating its records of the telephone request. While 
providing a confirmation number serves as additional protection for the 
appellant, loss of the number would not affect access to the appeal 
process and or appeal records.
    We believe that allowing appellants to initiate a request for 
review by telephone would facilitate easier access to the appeals 
process. We recognize, however, that there may be instances in which 
the appellants may have difficulty in reaching a carrier by telephone. 
In order to ensure that appellants who encounter difficulties have 
sufficient time to file a written request for review by the 180-day 
deadline, we would limit the period to request a review by telephone to 
a period of 150 days after the date of the notice of the initial 
determination. This shorter period for initiating a review by telephone 
would afford an appellant who may be unsuccessful in reaching a carrier 
by telephone an additional ``window of opportunity'' to make a written 
request for review before the time to appeal expires.
    We believe that providing this window would establish a safeguard 
for appellants who were unable to reach the carrier by telephone. This 
safeguard is necessary because of difficulty verifying that the 
appellant could not reach the carrier by telephone. Therefore, if the 
appellant telephoned the carrier on the 150th day and could not get 
through, he or she would still have an additional 30 days to submit a 
written request for review.
    We intend to establish instructions for carriers that would ensure 
that the right to a review is not compromised. These instructions would 
include, but may not be limited to, the following:

B. Requests for Review

     The carrier's initial claim notice must specify the 
telephone number that a party dissatisfied with the initial 
determination can call to request a review. The initial claim notice 
must also specify the timeframe for requesting review by telephone 
(that is, 150 days), as well as the timeframe for filing a written 
request for review (that is, 180 days).
     The carrier must inform and educate the beneficiaries 
about its telephone review process through any one of the following:

--Bulletins/newsletters.
--Newspaper articles.
--Senior citizen groups.
--Beneficiary outreach workshops.
--Carrier's customer service/inquiry department.
--Provider relations department.

     The carrier must document all telephone calls at the time 
a call is received. The carrier must record the date the appellant 
called and the confirmation number assigned to assure timely filing. 

[[Page 35546]]

     The carrier must attempt to resolve as many issues as 
possible during the telephone conversation. Some telephone reviews may 
not be processed or completed because of the complexity of issues, need 
for additional documentation, or other factors. At the end of each 
telephone review, the carrier must advise the appellant of further 
appeal rights.
     The carrier must give the appellant a written 
determination advising him or her of the results of the review, 
regardless of whether a review is requested by telephone, in writing, 
or via electronic transmission.

C. Electronic Requests for Review

    Filing review requests electronically would be easier and faster 
for parties than submitting a letter or the HCFA-1964 form (Request for 
Review of Part B Medicare Claim). Electronic requests would shorten the 
mailing time for submitting review requests and eliminate the paper 
hassle of hardcopy requests. Currently, not all of the carriers have 
the capacity to receive electronic requests for review. However, in the 
future all carriers will have the capability to accept electronic 
requests for review from entities that submit their claims 
electronically. We propose to provide for electronic requests for 
review but to limit this process to those entities that electronically 
bill their claims to a carrier system that has the capability to 
receive electronic requests for review. We would instruct carriers to 
inform their billers whenever they obtain this capability and inform 
them how the process works.
    The following steps show how the electronic process is expected to 
work:
     Once the biller electronically receives notification of 
the initial claim determination from the carrier, he or she must enter 
a ``specified code'' to indicate that the retransmission is a request 
for review.
     For each line of the claim being submitted for review, the 
biller must indicate the reason for the review in the ``Notes'' field. 
This request for review is transmitted to the carrier.
     Any additional documentation the biller wants to submit 
can be mailed, or with carrier agreement, faxed to the carrier.
    An appellant would have a 180-day period to request a review of an 
initial determination by electronic means, which is the same time 
allowed to file a written request for review. The appellant submitting 
an electronic request for review would receive an online 
acknowledgement at the time of transmission. Therefore, the appellant 
would have documentation that a request for review was filed and the 
time of filing. Since the appellant who submitted an electronic request 
would have more control over initiating the request for review than an 
appellant who telephoned for a request, we are not limiting electronic 
requests to 150 days.
    The above explanation is being furnished simply to provide an idea 
of the way the process should work. However, should this proposed rule 
be finally implemented, the above process is not necessarily the exact 
process that will be employed.

III. Reasons for the Revisions

    Parties to a Part B determination, particularly physicians who take 
assignment, often contact carriers by telephone to dispute a 
determination that a service was not covered or to obtain information 
about why they were paid less than they thought was reasonable. 
Sometimes, physicians call because they believe the code assigned to 
the service is incorrect, or they want to correct some other error they 
believe the carrier made.
    Many beneficiaries raise questions about initial determinations if 
a denial or partial denial of a bill is involved. Beneficiaries often 
want to know why charges were reduced, especially if they believe the 
charges were reasonable.
    As a result of these calls, carriers frequently make corrections by 
telephone, calling the process a reopening, informal review, or other 
name. This action requires administrative funds, even though the party 
has not actually used the administrative review process. The carrier, 
in effect, may do two reviews in place of one for each instance in 
which the informal action does not satisfy the party.
    A party that calls to inquire about the initial determination, we 
believe, would be pleased to know he or she has the option of writing 
or calling to request a review. Whenever possible, the carrier would 
attempt to resolve issues during a call and provide a review 
determination at the conclusion of the call. At the end of each 
telephone review, the carrier would advise the party of further appeal 
rights.
    The current review process that requires a party to write to 
request a review takes time and effort, especially for beneficiaries. 
At times, the party requesting a review in writing may have to wait 
approximately 45 days to receive a review determination. Our intention 
in encouraging telephone requests for reviews is to foster quick 
communication between the review staff and the parties. The proposed 
additional means of requesting a review by telephone or electronic 
transmission would improve customer service in the following ways:
     Making access to the appeals process easier.
     Saving time.
     Providing a more prompt response.
     Reducing paperwork. (Currently a party must write a letter 
or complete HCFA Form 1964 (Request for Review) or submit a completed 
EOMB to request a review.)
     Ensuring prompt payments.
     Improving our relationship with the beneficiary and 
physician/supplier communities.

IV. Exclusions From Telephone and Electronic Reviews

    We do not intend to provide for telephone requests for review on 
Part B determinations made by Peer Review Organizations (PROs) because 
of the types of issues PROs handle. The issues are usually medically 
focused and highly technical. We also believe this process would not be 
administratively efficient and reasonable, if, in most cases, 
adjudication cannot occur at the time of the call. The process could 
actually result in delays and/or duplication of effort. We believe the 
issues and documentation needed to process PRO appeals are sufficiently 
different from other Part B reviews and the telephone request process 
would be cumbersome for these appeals.
    Similarly, we do not intend to provide for telephone requests for 
review on Part B initial determinations made by Health Maintenance 
Organizations (HMOs). Requests for reconsideration of initial 
determinations made by HMOs are governed exclusively by 42 CFR part 
417, subpart Q. Unlike part 473, subpart B (PRO reconsiderations and 
appeals process), there is no cross-reference to part 405, subpart H in 
part 417, subpart Q.
    Electronic requests for review would be available to those billers 
that bill their claims to a carrier system that has the capability to 
receive electronic requests for review. Although PROs may make the 
review determination, it is the carrier or fiscal intermediary's 
responsibility to process any adjustments to the claim, as a result of 
the review determination. Since the PROs are not involved in the 
billing process, the PROs would not need to have the capability to 
receive claims and/or electronic requests for reviews.
V. Provisions of the Proposed Regulation

    Under sections 205(a), 1102(a), 1871(a)(1) and 1872 of the Act, the 


[[Page 35547]]
Secretary has the authority to prescribe regulations as may be 
necessary to administer the Medicare program. It is under these 
statutory authorities that we propose to change the Medicare 
regulations to allow a party to request a review of a Part B initial 
claim determination by telephone or by electronic transmission.
    We propose to revise Sec. 405.807 (Review of Initial Determination) 
as follows:
     Redesignate existing paragraph (d) as new paragraph (b) 
and remove the words ``in writing'' from newly redesignated paragraph 
(b).
     Redesignate existing paragraph (b) as paragraph (c) and 
revise it to allow the additional methods of telephone and electronic 
transmission for a party (other than a PRO) to request a review of an 
initial determination by a carrier.
     Redesignate existing paragraph (c) as paragraph (d) and 
revise it to allow for a period of 150 days after the date of the 
notice of the initial determination for a party to telephone the 
carrier and request a review.
     Add new paragraph (e) to clarify that a beneficiary, 
provider, or attending practitioner who is dissatisfied with a PRO 
initial determination may request a review of an initial determination 
only in writing.

VI. Collection of Information Requirements

    Section 405.807 of this document contains information collection 
and recordkeeping requirements that are subject to review by the Office 
of Management and Budget (OMB) under the Paperwork Reduction Act of 
1980 (44 U.S.C. 3501 et seq.). These reporting and recordkeeping 
requirements are not effective until a notice of OMB's approval is 
published in the Federal Register. This proposed rule would impose 
minimal recordkeeping requirements. We would require carriers to assign 
a confirmation number to a party that initiates a request for review by 
telephone. The party would be given the confirmation number by the 
person who received his or her telephone request. We anticipate that 
the confirmation number would be the same number the carrier uses as 
its internal control number/documentation number (usually a 13-digit 
number). If this can be done, there would not be any additional 
recordkeeping on the carrier's part. The carrier is already assigning 
this number and recording it.
    The party who would be given the confirmation number would have to 
record the number. This number would confirm that the party timely 
filed a request should that become an issue later. The confirmation 
number would assist the carrier in locating its record of the telephone 
request. It would take less than one minute for the carrier to assign 
and record the confirmation number and the same for the party to record 
the confirmation number. While providing a confirmation number serves 
as additional protection for the party, loss of the number would not 
affect access to the appeal process and/or appeal records. 
Organizations and individuals desiring to submit comments on the 
information collection and recordkeeping requirements should direct 
them to the OMB official whose name appears in the ADDRESSES section of 
this preamble.

VII. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comments, 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 
that document.

VIII. Regulatory Impact Statement

    We generally prepare a regulatory flexibility analysis that is 
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612), unless we certify that a rule would not have a 
significant economic impact on a substantial number of small entities. 
For purposes of the RFA, carriers and beneficiaries are not considered 
to be small entities. We consider all providers, physicians, and other 
suppliers to be small entities. Under this proposed rule, 
beneficiaries, providers, and physicians and other suppliers may 
request a review of an initial claim determination by telephone or 
through electronic transmission. This review is the first level of 
appeal for Part B claims and is performed by carrier staff who had no 
part in making the initial determination. This review, without the 
presence of oral testimony by the appellant party, is considered to be 
less costly to all parties and is a more expeditious way of handling 
complaints than a hearing.
    Section 1102(b) of the Act requires us to prepare a regulatory 
impact statement if a rule may have a significant impact on the 
operations of a substantial number of small rural hospitals. Such an 
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 
Statistical Area and has fewer than 50 beds.
    We are not preparing a regulatory impact statement since we have 
determined, and we certify, that this rule would not have a significant 
economic impact on the operations of a substantial number of small 
rural hospitals.
    In accordance with the provisions of Executive Order 12866, this 
proposed rule was not reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 405

    Administrative practice and procedure, Health facilities, Health 
professions, Kidney diseases, Medicare, Reporting and recordkeeping 
requirements, Rural areas, X-rays.

    42 CFR Part 405 would be amended as follows:

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

    1. The authority citation for part 405, subpart H is revised to 
read as follows:

    Authority: Secs. 205(a), 1102, 1842(b)(3)(C), 1869(b), and 1871, 
and 1872 of the Social Security Act, as amended. (42 U.S.C. 405(a), 
1302, 1395u(b)(3)(C), 1395ff(b), 1395hh and 1395ii.)

Subpart H--Appeals Under the Medicare Part B Program

    2. Section 405.807 is revised to read as follows:


Sec. 405.807  Review of initial determination.

    (a) General. A party to an initial determination by a carrier, who 
is dissatisfied with the initial determination, may request that the 
carrier review the determination. If a review is requested, the request 
for review does not constitute a waiver of the right to a hearing 
(under Sec. 405.815) subsequent to the review.
    (b) Definition. Request for review is a clear expression by a party 
to an initial determination that indicates he or she is dissatisfied 
with the initial determination and wants to appeal the matter.
    (c) Place and method of filing a request. Except for the limitation 
on PRO requests set forth in paragraph (e) of this section, a request 
by a party for a carrier to review the initial determination may be 
made only in one of the following ways:
    (1) In writing and filed at an office of the carrier or at an 
office of SSA or HCFA.
    (2) By telephone to the telephone number designated by the carrier 
as the 

[[Page 35548]]
appropriate number for its receipt of requests for review.
    (3) By electronic transmission to the carrier.
    (d) Time of filing request. (1) For telephone requests, a party to 
the initial determination may request a review of the initial 
determination within 150 days after the date of the notice of the 
initial determination.
    (2) For requests made in writing or by electronic transmission, a 
party to the initial determination may request a review of the 
determination within 180 days after the date of the notice of the 
initial determination.
    (3) The carrier may, upon request by the party affected, extend the 
period for requesting the review.
    (4) For telephone requests, a party to the initial determination is 
not precluded from later making a written or electronic request if 
unable to contact the carrier within the 150 day timeframe. The party 
has an additional 30 days to submit a written or electronic request for 
review.
    (e) Exception to telephone and electronic review requests. A party 
that submits a request for review of a Medicare Part B initial 
determination on a claim by a PRO must follow the submittal 
requirements described in paragraph (c)(1) of this section.

(Catalog of Federal Domestic Assistance Program No. 93.774, 
Medicare--Supplementary Medical Insurance Program)

    Dated: June 28, 1995.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
[FR Doc. 95-16807 Filed 7-7-95; 8:45 am]
BILLING CODE 4120-01-P