Lack of medical necessity is one of the leading reasons for denials during RAC, MAC, TPE, and UPIC audits. However, case law dictates that the treating physician should be allowed deference with the decision that medical necessity exists because the Medicare and/or Medicaid auditor never had the privilege to see the recipient.

However, recent ALJ decisions have gone against case law. How is that possible? CMS creates “Rules” – I say that in air quotes – these Rules are not promulgated, but are binding on anyone under CMS’ umbrella. Guess what? That includes the ALJs for Medicare appeals. As an example, the “treating physician” Rule is law based on case law. Juxtapose, CMS’ Ruling 93-l. It states that no presumptive weight should be assigned to a treating physician’s medical opinion in determining the medical necessity of inpatient hospital and skilled nursing facility services. The Ruling adds parenthetically that the Ruling does not “by omission or implication” endorse the application of the treating physician rule to services not addressed in the Ruling. So, we get a decision from an ALJ that dismisses the treating physician rule.

The ALJ decision actually said: Accordingly, I find that the treating physician rule, standing alone, provides no basis for coverage.

This ALJ went against the law but followed CMS Rulings.

CMS Rulings, however, are not binding. CMS Rulings aren’t even law. Yet the CMS Rulings, according to CMS, are binding onto the entities that are under the CMS umbrella. This means that the Medicare appeals process, which include the redeterminations, the reconsiderations, the ALJ decisions, and the Medicare Appeals Councils’ decisions are all dictated by these non-law, CMS Rulings, which fly in the face of actual law. ALJs uphold extrapolations based on CMS Rulings because they have to. But once you get to a federal district court judge, who are not bound by CMS, non-law, rulings, you get a real Judge’s decision, and most extrapolations are thrown out if the error rate is under 50%.

Basically, if you are a Medicare provider, you have to jump through the hoops of 4 levels of appeals that is not dictated by law, but by an administration that is rewarded for taking money from providers on the pretense of FWA. Most providers do not have the financial means to make it to the 5^th level of appeal. So, CMS wins by default.

Folks, create a legal fund for your provider entity. You have got to appeal and be able to afford it. That is the only way that we can change the disproportionately unfair Medicare appeal process that providers must endure now.