CMS officially added a new Section 3.9 to the Medicare Program Integrity Manual [PDF], effective October 27, 2014. These provisions instruct Medicare Administrative Contractors (MACs) to assign a physician to participate at Administrative Law Judge (ALJ) hearings. MACs may participate by filing position papers and/or providing testimony at the hearing to clarify factual and policy issues involved in a case. For cases involving extrapolation, CMS instructs MACs to be prepared to discuss both the background on how the provider/supplier was selected for the audit and issues related to the extrapolation process. CMS also instructs MACs to consider the following factors when deciding to participate in a particular hearing or for a particular claim docketed at a hearing: policy implications, dollars at issue, source of the denial, program integrity matters, and the extent to which a particular issue is, or has been, a recurring issue at the ALJ level of appeal.

The Medicare claims appeal regulations also permit CMS contractors to participate in hearings as a party, which would essentially afford them the opportunity to present opening and closing arguments, as well to direct and cross-examine witnesses just like the provider/supplier that requested the hearing. However, MACs must obtain approval from CMS prior to electing party status, which most likely will be granted in cases involving program integrity matters or significant overpayment amounts. Furthermore, CMS requires MACs to collect and include data of their participation in their monthly status reports to CMS.

Ober|Kaler's Comments

Interestingly, CMS acknowledges that the notices of hearings are sent only to the Qualified Independent Contractors (QICs). Instead of revising its own regulations and policies, CMS instructs MACs to coordinate with the QICs to obtain a copy of the hearing notices from the QICs in time to enter their appearances within the required 10 days. Thus, while more individuals may be attending these hearings from now on, appellants should continue to aggressively require Medicare contractors to comply with all Medicare requirements, including procedural mandates. Most likely, while the Recovery Audit Contractors (RACs) and Zone Program Integrity Contractors (ZPICs) will continue to attend these hearings, the MCAs will file position papers instead.