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Health Law Advisories

Extensive Changes to Procedures Governing PRRB Appeals

August 22, 2008

Dear Friends and Clients:

On May 23, 2008, the Centers for Medicare and Medicaid Services (CMS) issued regulatory amendments that effectively overhauled many of the procedures governing administrative appeals before the Provider Reimbursement Review Board (PRRB or Board). The regulatory amendments, which are effective as of August 21, 2008, impact not only future appeals, but all appeals pending before the Board as of the effective date.

Further, in addition to the revised regulations, on August 8, 2008, the PRRB issued extensive revisions to its own “instructions.” As discussed further below, the Board's changes to the instructions, which are now characterized as “rules,” are issued as interim final rules, as the PRRB still is soliciting comments from the provider community up to October 1, 2008.

The changes to both the PRRB regulations and instructions/rules are intended in large part to help clear up the back log of approximately 7,500 cases that now are pending before the Board and to streamline and quicken the appeal process going forward. Along these lines, certain deadlines are shortened, the requirements for initiating appeals and adding issues to pending appeals are more exacting, and the Board's enforcement of the various requirements will be more stringent. The changes are so significant that the PRRB recently announced that is was unilaterally extending by four months all currently pending position paper deadlines in order to ease the burden of adjusting to the new rules.

Because the changes to both the regulations and the instructions are so numerous, it is beyond the scope of this letter to discuss each change in detail. Rather, we highlight the policy changes that we believe are likely to be of most interest to affected providers.

Regulatory Amendments
As mentioned, CMS issued the amendments to the regulations governing PRRB appeals, which are codified at 42 Code of Federal Regulations (C.F.R”) §§ 405.1800 et seq., on May 23, 2008. The majority of changes became effective August 21, 2008 and impact any appeals either pending before the PRRB or filed with the Board on or after that date. The following is a list of some of the more significant changes made through the amended regulations:

• Date of Filing: The regulations now specify that the deadlines for submitting hearing requests, requests to add issues to a pending appeal and any other transmittal to the PRRB are based on “date of receipt” instead of date of mailing. “Date of receipt” can be either the date identified as delivered by a national next day carrier or the date the document is stamped received by the Board, depending on the method of transmittal.
• Provider Hearing Requests: Hearing requests must be more detailed than was previously required, as they now must explain each item at issue, including a discussion of why the provider believes payment was incorrect or why the provider lacks access to information necessary to calculate a correct payment, how and why the payment must be determined differently and, significantly, a description of the nature and amount of each self-disallowed item. The provider must also submit a copy of the appealed determination and any available supporting evidence with the hearing request.
• Adding Issues to Appeals: Whereas under the previous regulations, issues could be added to a pending appeal at virtually any time before the hearing, issues now must be added within 240 days of the receipt of the determination from which the provider appealed or, in the case of an appeal that is already pending before the Board, the later of the above time or October 20, 2008. Consequently, providers that have appeals currently pending before the PRRB should immediately start to consider whether to add issues to those appeals. In addition, any issues added to an appeal must independently satisfy all jurisdictional requirements, except the aggregate $10,000 amount in dispute.
• Self-Disallowed Items: Providers will no longer be able to get the PRRB to consider “self-disallowed” items just by virtue of filing a timely appeal of other issues. Rather, provider appeal requests must now describe any self-disallowed items, show the reimbursement sought and cite the authority that was the basis for the provider's pre-determination that the item would be disallowed by the intermediary. Further, with respect to cost report periods ending after December 31, 2008, providers also must show that they indicated any self-disallowed items on the protested items line on the cost report in order to preserve their appeal rights for such issues.
• Group Appeals: The regulations pertaining to group appeals also have changed significantly. In order to meet the minimum $50,000 amount of controversy requirement to file a group appeal, providers may appeal more than one cost reporting period, or, at the Board’s discretion, may appeal more than one such period for another purpose (such as convenience). Other noteworthy changes in this area include: detailed provisions related to filing common issue related parties (CIRP) appeals and non-CIRP appeals; information to be included in a group appeal request; and procedural issues pending the completion of the group and issuance of the Board’s decision. Of particular note are the changes requiring that CIRP appeals be initiated as group appeals and permitting CIRP appeals to be initiated by a single provider. Previously, at least two providers were required to form a CIRP group appeal.
• Discovery: PRRB prehearing discovery rules have changed to become more exacting and specific. For example, where the former rules generally permitted prehearing discovery requests “before the beginning of the hearing,” the new rules mandate that discovery requests must be served “no later than 120 days before the initially scheduled starting date of the Board hearing,” unless the Board itself extends the time for the request. Additionally, the new rules expressly state that CMS, the Secretary of DHHS, and any Federal agency may not be served with a request for production of documents. This provision directly changes former PRRB instructions that in certain instances, a party may serve CMS with such a request.

Two more significant changes to the PRRB’s discovery rules involve the enforcement of a party’s request. First, the new rules make it clear that the party must make a good faith effort to resolve a discovery dispute prior to filing a motion to compel another party’s response. Accordingly, motions to compel now must include a “self-sworn declaration” from the party that describes the party’s good faith efforts to settle the dispute. Second, the Board may not issue a subpoena any later than 90 days before the hearing.

In addition to the issues discussed above, the amended regulations also impact, among other things, the rules applicable to appeals from revised notices of program reimbursement (NPRs) and items claimed under protest. Impacted providers should familiarize themselves with all of these regulatory changes.

Changes to the PRRB Rules
The PRRB promulgated interim final changes to its instructions for provider appeals on August 8, 2008. The Board has designated August 21, 2008 as the effective date for the new instructions to coincide with the effective date of the regulatory changes. However, the PRRB will continue to accept written suggestions regarding the rules through October 1, 2008.

As with the regulations, the Board's changes to the rules are fairly extensive and detailed. Some of the rules largely track the requirements of the amended PRRB regulations, while other rules go beyond the regulatory requirements. Set forth below are a few of the more notable new “rules.”

• Rule 1 – Overview: With respect to this rule, the most significant development is the PRRB's adoption of a variety of model forms for such things as individual hearing requests, group hearing requests, requests to add issues to pending appeals and requests to transfer issues from an individual to group appeal. The PRRB is strongly encouraging providers to utilize the model forms, which are included in an appendix to the rules.
• Rule 6 – Filing an Individual Appeal: The rules establish that providers are to file individual appeal requests by submitting Model Form A along with all documentation listed in the form. Under the new rules, an individual appeal may only be filed for one cost reporting period. If multiple final determinations were issued on different dates for the cost reporting period being appealed (i.e. NPR, revised NPR, exception request denials, etc.), timely appeal requests must be filed for each subsequent final determination. In filing subsequent appeals for the same cost reporting period, providers must identify the case number of the existing individual appeal. As a general rule, the Board will consolidate all appeals from final determinations for the same cost reporting period into the existing case number. The Board expects parties to meet deadlines in the existing case for both the old and new issues, though the Board will consider motions to extend such deadlines for newly added issues from subsequent determinations.
• Rule 8 – Framing Issues for Adjustments Involving Multiple Components: Provider appeals must now identify different components of disputes concerning a single category of reimbursement (i.e. disproportionate share hospital (“DSH”), bad debt) as entirely separate issues for the purposes of appeal. The identification of each issue must include a concise issue statement describing the adjustment (including the adjustment number) why the adjustment is incorrect, and how the payment should be determined differently. Some examples of issues that must now be appealed separately include dual eligible, general assistance, charity care, and HMO days, which all relate to DSH reimbursement adjustments. (Previously, many providers commonly grouped these issues together under a single issue titled “DSH Adjustments”). With respect to Medicare bad debt reimbursement, examples of issues that now must be appealed separately are crossover patients, use of collection agency, 120-day presumption, and indigence determinations. Various issues related to Graduate Medical Education/Indirect Medical Education (GME/IME), including managed care days, resident count, and outside entity rotations also must now be appealed separately.
• Rules 23 & 24 – Duty to Confer/Joint Scheduling Orders: In completely new rules, the PRRB is now requiring that providers and intermediaries confer in advance regarding whether they will submit preliminary position papers in a particular case according to deadlines set by the PRRB or will instead file a proposed Joint Scheduling Order (JSO) with the Board. Rule 24 specifies the format required for proposed JSOs. The Board is strongly advocating the use of JSOs.
• Rule 25 – Preliminary Position Papers: Under the new rules, the PRRB's requirements for preliminary position papers are much more demanding. The Board expects all issues to be thoroughly and completely briefed in the Preliminary Position Paper. Further, the Board is also requiring providers to submit all relevant evidence with the Preliminary Position Paper. If a provider is unable to do so, the Preliminary Position Paper must include an explanation of what documents are missing and when they are expected to become available. New arguments and documents not included with the Preliminary Position Paper may be excluded by the PRRB at the time of hearing.

As with the regulations, there are other issues addressed in the new PRRB rules that are not discussed above. Impacted providers should make an effort to familiarize themselves with all of the new rules. As alluded to above, if there are any elements of the new rules that providers find objectionable, there is still time to submit comments and/or suggestions to the PRRB.

* * * *

Hooper, Lundy & Bookman (HLB) has long had extensive expertise in handling appeals before the PRRB and, consequently, has actively followed the development of both the amended PRRB regulations and the new Board instructions/rules. Providers that have questions about the issues discussed above, questions regarding any regulatory or rule changes not discussed specifically, or an interest in submitting comments to the PRRB regarding the new rules should feel free to contact John Hellow (310-551-8155), Laurence Getzoff (310-551-8190), Byron J. Gross (310-551-8125), Jon P. Neustadter (310-551-8151) or Jordan B. Keville (310-551-8103) in the Los Angeles office of HLB; Mark Reagan at (415-875-8501) in the San Francisco office; or Mark Johnson at (619–744-7301) in the San Diego office.

 

Very truly yours,

Hooper, Lundy & Bookman, Inc.

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