Improper Medicare Advantage Plan Noncoverage Notices May Benefit Labs

Laboratories may be positively affected by changes outlined in a May 5 memo concerning limitations of liability for financial responsibility for providers of services to Medicare beneficiaries covered under Medicare Advantage (MA) plans. After receiving reports that Medicare Advantage organizations (MAOs) are issuing improper noncoverage notices to Medicare beneficiaries, the directors of two separate Centers for Medicare and Medicaid Services (CMS) groups sent a memo ordering offending MAOs to “immediately cease this practice and instead follow the process for issuing a notice of a denial of coverage in accordance with 42 CFR § 422.568 and 422.572.” In a May 5 memo, Arrah Tabe-Bedward, director of the Medicare Enrollment and Appeals Group, and Danielle R. Moon, director of the Medicare Drug and Health Plan Contract Administration Group, stated that the notices being used by MAOs appear to be similar in purpose and content to advance beneficiary notices of noncoverage (ABNs) used in the original Medicare program. “Such notices are not applicable to the Medicare Advantage program and are not appropriate for use by an MAO with respect to its enrollees.” One of the purposes of an ABN is to allow a Medicare beneficiary to determine whether or not a service is covered by Medicare without having to receive the services. According to the memo, Medicare Advantage enrollees have always had the right to an advance determination of whether services are covered prior to receiving the service. Regulations require MAOs to have a procedure for making these determinations. There Is an Official CMS Form for That This long-standing policy is in Chapter 4, section 170 of the Medicare Managed Care Manual, which states, in part, that services including referrals of a contracted provider to another provider like a laboratory are considered plan-approved unless the enrollee is notified that the services will not be covered. In the case of a laboratory that provides services to an MAO enrollee who identifies as such, the plan is liable for payment if the beneficiary has never been notified, on the appropriate CMS form, that the service is noncovered. Until Nov. 1, 2013, there were two types of notices that could be used, one for a denial of payments and the other for a denial of coverage. Both were official CMS forms, CMS-10003-NDP and NDMC respectively. In an effort to streamline the notice requirements, CMS combined the forms into a new form called the Integrated Denial Notice (IDN) form (CMS–10003–NDMCP). The form and its instructions can be found on the CMS Web site in the beneficiary notices initiative Web page and is a required form. Some Medicaid plans are also covered under these regulations. The IDN integrates Medicaid appeal rights for Medicare health plan enrollees receiving benefits under a Medicaid program. Plans administering Medicaid benefits are responsible for including any applicable Medicaid information in the notice. The IDN is a three-page form that is used for both coverage and payment denials and explains in some detail how the beneficiary goes about appealing the decision of the plan in the case of a denial of coverage or payment. The MAO is required to explain why the coverage or payment has been denied. The form also explains that beneficiaries can have someone else act on their behalf and provides instructions on how to go about accomplishing that. There is also a mechanism for a “fast appeal” in a case where beneficiaries or their doctors believes their health could be seriously harmed by waiting 30 days for a standard appeal. A fast appeal will provide a decision within 72 hours after the appeal form is received. A fast appeal is automatic if the physician asks for it or supports the beneficiary’s request for one. Also, if the MAO denies the appeal, it is supposed to provide a written decision and automatically forward the case to an independent reviewer. In the case of a Medicaid beneficiary, the specific state Medicaid appeal process is to be described on the form. Benefit for Labs? Labs may be able to avoid performing tests or having claims denied with no recourse for MA beneficiaries in cases where they believe a test will not be covered. MAOs have denied claims for providers like laboratories and have avoided the stigma of informing enrollees of coverage limitations because these rules are not well known and MAOs have not followed the correct procedures. Many labs believe that there is not a mechanism to hold the beneficiary liable if a service is not covered by an MA plan, as is the case with an ABN in regular fee-for-service Medicare. That apparently has not been exactly true. The main difference is that the MAO is required to provide the notice, not the lab or other provider. If the laboratory is willing to create a process for handling MA beneficiaries in cases where it believes a test will be denied, like many of the new genetic and molecular tests, it can avoid having to write off the charges. Here is how that would work. It is the responsibility of a provider, such as a laboratory, to advise the enrollee to request a coverage determination from the MAO in any case where it believes the test will be denied. The provider can request the coverage determination on behalf of the enrollee as is explained in the form and its instructions. In any case, the notice is required for an MAO to deny coverage or payment. If the MAO notifies the beneficiary that it will not cover the test, the laboratory may hold the beneficiary liable for the payment. If the determination is that the test is covered, the lab should be able to bill the MA plan and receive payment. In the event of a denial, the lab can appeal using the positive coverage determination from the MA to overturn the denial. In the case of a negative determination, the lab can bill the patient for the service. The lab should make sure that it has a copy of the notice of noncoverage and informs beneficiaries that they are responsible for payment for the service provided. Many laboratories include this on their requisition, and the patient signature along with a copy of the MAO notice to the patient should be sufficient to collect payment from the patient or the plan. Takeaway: Laboratories have options to hold Medicare Advantage plans and beneficiaries liable for payment for denied claims as long as they make adjustments to their process to account for the requirements of noncoverage or nonpayment notices.