On January 16, 2009, the Centers for Medicare and Medicaid Services (CMS) issued Transmittal 1671 (Transmittal), elaborating on its definition of what constitutes "new and material evidence" as good cause for reopening a claim between one and four years after the initial determination or redetermination. The applicable regulations provide that a contractor may reopen, or a party may request reopening, a claim within four years of the date of the initial determination or redetermination for good cause. See 42 C.F.R. § 405.980(b)(2)&(c)(2).

Under regulation 42 C.F.R. § 405.986, "good cause" is established when there is new and material evidence that was not available or known at the time of the determination or decision and may result in a different conclusion, or if the evidence that was considered in making the determination or decision clearly shows on its face that an obvious error was made at the time of the determination or decision.

In the Transmittal, CMS issued the following clarifications, among others:

  1. Evidence may include any record used in the provision of medical care that supports whether or not the service was covered, medically necessary and provided as billed;
  2. The contractor, in determining whether good cause exists for reopening a determination or decision, considers whether evidence is new and material from the perspective of the person or entity requesting or initiating the billing;
  3. The submission of additional evidence is not necessarily sufficient to establish good cause to reopen -- the information must be "new" (i.e., not readily available or known to exist at the time of the initial determination);
  4. When a party requests a reopening of an initial determination or redetermination for good cause based on the submission of new and material evidence, the contractor should require that the person or entity requesting the reopening explain how information constitutes new and material evidence that establishes good cause; and
  5. If a medical record or other supporting documentation was not utilized when a contractor made an initial determination because it was not requested or was not provided, then the content of any medical records or supporting documentation which are subsequently requested during the course of its review would constitute new evidence.

This last clarification is particularly relevant because most contractors generally do not utilize medical records when making initial determinations. Although it is still necessary for contractors to show that evidence is "material" (i.e., that it may result in a conclusion different from that reached in the initial determination or redetermination), contractors who did not initially utilize the medical record will have no difficulty proving that the evidence is "new."

The Transmittal does not alter the rules governing claims reopened within one year from the date of the initial determination, which may be reopened for any reason. See 42 C.F.R. § 405.980(b)(1)&(c)(1).

The changes set forth in the Transmittal, which affect sections 10.11 through 10.11.3 of Chapter 34 of the Medicare Claims Processing Manual, are effective February 16, 2009.