April 14, 2014
Guide to the responsibilities of Health and Human Services Centers for Medicare
and Medicaid, Provider reimbursement, and the Provider Reimbursement Review
The purpose of this Memorandum is to acquire a better understanding of the responsibilities of Health and Human Services Centers for Medicare and Medicaid Services (the “Agency,” or “CMS”), Provider Reimbursement,1 and the Provider Reimbursement Review Board (the “PRRB” or “Board”). This memorandum focuses on (1) recent Medicaid and Medicare legislation; (2) the process of becoming a Provider;2 (3) the reconsideration process for prospective Providers; (4) the appellate review process of Provider reimbursement decisions; (5) the role of the PRRB; and (6) alternatives to administrative or appellate review of Provider reimbursement decisions.
ISSUES: What is Medicare and Medicaid? How does an individual or entity become a Medicare or Medicaid Provider? What is the reconsideration process? What is a Fiscal Intermediary? What is the appellate review process for Provider reimbursement decisions? What is the role of the PRRB in regards to Provider reimbursement claims? How does Section 1878 of the Social Security Act affect Provider reimbursement? What is the mediation process for Providers? In addition to mediation, what are other alternatives available to Providers for early resolution of reimbursement disputes?
BRIEF ANSWER: In the United States (“U.S.”), health insurance is mostly in the hands of the private sector; however there are two federal government health insurance programs known as Medicare and Medicaid. Medicaid is a medical assistance means tested program jointly financed by the state and federal governments for eligible low-income individuals; whereas, Medicare is a federal health insurance program for the elderly and disabled.3 Congress created the PRRB in 1972 to give Providers of services an independent forum for resolving payment disputes arising from final determinations made by Fiscal Intermediaries. The Board is comprised of five members, appointed by the Secretary of the Department of Health and Human Services (“HHS”), to serve three-year terms. The statute requires that the members are knowledgeable about Provider reimbursement and that one member must be a certified public accountant. The Board is administratively staffed by the CMS’ Office of Hearings.
A Provider of services annually files a cost report with a FI. In the cost report, the Provider identifies all of the items and services it has provided to Medicare or Medicaid beneficiaries for which it believes it is entitled to reimbursement. The FI audits the Provider's cost report. Upon completion of the audit, the FI issues to the Provider a Notice of Program Reimbursement ("NPR"). If the Provider is dissatisfied with the total amount of reimbursement determined by the FI, the Provider has the option to request a reopening of the FI’s determination, mediation, expedited judicial review, and the PRRB administrative judicial review process. If unsatisfied with the final outcome of the PRRB administrative judicial process, a Provider may seek judicial review of any final decision of the Board, or any reversal, affirmance or modification by the Secretary, by filing a suit in federal court. All of the above referenced options have time restraints.
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