The Maryland Department of Health and Mental Hygiene has proposed a rule that significantly improves the dispute resolution process for healthcare providers appealing managed care organization (MCO) payment denials based on medical necessity grounds.
Under the proposed rule – published in the Oct. 18, 2013, edition of the Maryland Register as COMAR 10.09.86.01-10.09.86.08 – hospitals and other providers that have exhausted the current two-tier Medicaid MCO appeals process for claims reimbursement denials may submit an adverse medical necessity decision for independent review.
As detailed in the draft regulation, the provider must file the complaint with the state’s new Independent Review Organization (IRO) within 30 days of the second appeal rejection. The IRO then designates an “expert reviewer” – presumably a physician or other healthcare provider – to take a fresh look at the case. After the IRO’s final decision, the losing party has 60 days to pay all IRO fees, including interest.
Of course, the provider needs to weigh the risk of being saddled with the IRO fees against the cost of the unpaid claims, but a major plus for providers with this new process is they no longer need to hire their own independent reviewers. Moreover, the IRO’s expert reviewer would not be bound by the Medicaid MCO-preferred Milliman criteria, which are so vague that they permit MCOs to deny payment with impunity. And if the IRO finds in the provider’s favor, the MCO must fully reimburse the provider within 60 days or face steep penalties.
While there are some loopholes and other weaknesses in the draft rule that providers are addressing during the comment period, if adopted, this new rule would be without a doubt the most important advance in regulation of Maryland Medicaid MCOs since the establishment of the mandatory appeals process. It represents the best hope for Maryland hospitals fighting to be reimbursed fairly so they can continue caring for their patients.
Anderson & Quinn, LLC is a renowned law firm based in Rockville, Maryland, providing individuals, businesses, corporations, and healthcare institutions with the legal and litigation support they need.
