CMS Pub. 100-10, ch. 7, § 7115

A. Format of Notice

Make your denial notices understandable and write the notices in "plain English." In

addition, make sure that the beneficiary notice:

• Is in letter format;

• Is addressed to the beneficiary or his/her representative, if applicable (Where the

beneficiary is deceased, address the notice to the beneficiary's representative or

estate);

• Has a personalized salutation line (e.g., "Dear Mr. Smith" instead of "Dear

beneficiary" or "Dear representative"); and

• Includes all pertinent information in the body of the notice (i.e., attachments or

enclosures are not acceptable if they are in lieu of required information).

B. Identifying Information

The heading of the notice must include:

• The date of notice;

• The beneficiary's name;

• The beneficiary's Medicare Health Insurance Claim (HIC) Number;

• The beneficiary's address, his/her representative's address, or address of the

person handling the beneficiary's estate if beneficiary is deceased;

• The provider's name;

• The provider's Medicare number (not necessary if you transfer notices to the A/B

MAC (A) electronically);

• The medical record number (if known);

• The admission date (for denials related to "deemed" admission date cases, use the

actual admission date); and

• The attending physician's name (for the services in question).

C. Specificity of Notice

The body of the notice must include:

• Identification of QIO -- Include a brief statement concerning your duties and

functions under the Act.

• Reason for Admission -- Specify the reason for the admission. For partial denials

(i.e., part of the stay is covered), include a statement specifying that the admission

was medically necessary and appropriate (Do not include this statement in

"deemed" admission date denial notices).

• Opportunity for Discussion -- Reference your discussions with the attending

physician and provider. This requirement is met if your notice states that the

involved physician and hospital were provided with an opportunity to discuss the

case.

This applies to initial denial determinations and DRG assignment changes. When the

DRG assignment is changed (either higher or lower), provide the hospital and physician

an opportunity to discuss the DRG change.

• Solicitation of Views -- Reference your solicitation of the beneficiary's or his/her

representative's views. Include the date of your discussion (This provision applies

only when your review is based on a beneficiary's, his/her representative's, or

provider's request for review of a continued-stay HINN).

• Reason for Denial -- Include the relevant facts explaining the reason(s) for the

denial determination. The discussion in the beneficiary notice should be in

layman's terms, and include all the information necessary to support the denial

determination. The discussion must be specific to the individual case (i.e., it is

unacceptable to state only that the services were medically unnecessary,

inappropriate, or constituted custodial care).

o For procedure denials, specify either that the patient requires the

procedure but the services could be performed on an outpatient basis or

that the patient did not require the surgery and, therefore, the procedure

was not medically necessary (See Exhibit 7-28).

o For deemed admission denials, continued-stay denials, day outlier denials,

and partial admission denials (for non-PPS providers), specify the

date(s)/period(s) for the stay or services that are not approved as being

medically necessary or appropriate (A partial denial includes

services/items that Medicare determined to be covered). In addition, for

day outlier and partial admission denials (non-PPS providers), specify the

total number of denied days (See Exhibits 7-26, 7-27, and 7-29).

o For continued-stay denials (related to HINNs) involving "deemed"

admission situations, modify the notice to include the applicable language

(e.g., reason for denial, periods approved and denied, liability

determination) (See Exhibits 7-26 and 7-27).

o For cost outlier denials, specify the dates, charges, and specific

services/items that will not be approved as being medically necessary or

appropriate (See Exhibit 7-30).

o For day outlier denials, distinguish between those days that were not

medically necessary and those where the beneficiary could have safely and

effectively received the services on an outpatient basis.

o For changes to DRG coding information that affect the DRG assignment

(either higher or lower), include a listing of the diagnosis and procedure

codes and a narrative description as submitted by the provider and as

changed by you along with the reason for the changes. Be as specific as

possible in explaining the reason(s) for the changes (See Exhibit 7-31).

Do not notify the hospital of changes to DRG coding information when

the changes do not revise the DRG assignment.

o For billing errors, explain that the error precludes you from completing

review of the case. Instruct the provider to submit an adjusted claim to the

A/B MAC (A) (in accordance with your agreements with the A/B MAC (A)

and provider) (See Exhibit 7-24).

o For circumvention of PPS denials, specify that you are denying the second

admission. Explain whether the denial is based on services that should

have been furnished during the first admission, on an inappropriate

transfer from a PPS unit to a PPS-excluded unit, or on an inappropriate

transfer from a PPS-excluded unit to a PPS unit. Cite the provision of the

law that authorizes QIOs to deny payment for circumvention of PPS (See

Exhibit 7-34).

• Liability Determination for the Beneficiary and Provider -- Include a statement of

the beneficiary's or his/her representative's and the provider's liability

determinations (under §1879 of the Act), including a detailed rationale for the

decision (This applies only to initial medical necessity/custodial care denial

determinations) (See Exhibit 7-20).

o For denials based on circumvention of PPS, explain that the limitation on

liability provisions under §1879 do not apply, that the hospital is liable for

the denied charges, and that the beneficiary or his/her representative is

only responsible for payment of any applicable amounts for deductible,

coinsurance, and convenience services and items normally not covered by

Medicare (See Exhibit 7-34).

o If the beneficiary or his/her representative is found liable, specify the date

of the prior notice. Include a copy of the notice. Do not include a copy of

the beneficiary's prior notice with the provider/physician notice unless the

notice was issued by that provider.

o If the provider is found liable, specify the dates of liability (if applicable)

and the source: brochures, prior notices (including dates), manual

references, criteria, etc. Reference must be specific to individual case.

Give the provider a copy of the source material referenced by you (See

Exhibit 7-20, Conditions II, III, V, IX and X).

o For denials based on a beneficiary's or his/her representative's request for

review of a continued-stay HINN or a provider's request for review of a

proposed continued-stay HINN, include the date of your phone

notification to the beneficiary or his/her representative (See Exhibit 7-20,

Conditions VI and VII).

o For denials involving review of a HINN, do not approve payment for

additional days under §1879 of the Act for purposes of post-discharge

planning (i.e., grace days). A provider who issued a HINN has

demonstrated knowledge that Medicare will not cover the services and,

therefore, §1154(a)(2)(b) is not applicable (See Exhibit 7-20, Conditions

VI and VII).

o For denials based on concurrent review not involving a HINN, you may

approve payment for up to two additional days under §1879 of the Act for

purposes of post-discharge planning (i.e., grace days) (See Exhibit 7-20,

Condition VIII).

NOTE: When you deny a case that involves non-covered services such as routine foot or

dental care, do not apply the provisions of §1879.

• Liability Determination for the Physician -- Include a statement of the payment

liability determination related to denied physician services (Under §§1842(l) and

1879 of the Act). Include a detailed rationale for the decision (Applies to hospital

inpatient and ambulatory/outpatient surgical procedures/services and cost

outlier(s) with physician component denials that are determined to be medically

unnecessary).

o For denials involving claims for services billed on an assigned basis

(whether furnished by Medicare participating or nonparticipating

physicians), make your liability determination in accordance with the

provisions of §1879 of the Act.

o For denials involving services billed on an unassigned basis (by

nonparticipating physicians), make your liability determination in

accordance with the provisions of §1842(l) of the Act.

NOTE: The determination as to whether the physician is protected from payment

liability (when the physician accepts assignment) under §1879 of the Act or from making

a refund to the beneficiary or his/her representative (when the physician does not accept

assignment) under §1842(l) of the Act is made when the initial denial decision is

furnished. In both situations make a determination of the physician's and the

beneficiary's knowledge of the non-covered services. Unless there is evidence to the

contrary (e.g., the physician annotated in the medical record that he/she has given the

beneficiary a written advance notice), presume that the beneficiary or his/her

representative had no knowledge that Medicare would not pay for the denied items or

services furnished by the physician. On a case-by-case basis, the physician may

challenge this presumption when you offer the physician an opportunity to discuss the

case. At the same time, ask the physician if he/she accepted assignment (if you were

unable to determine this information from your review of the documents in the medical

record). The physician should be able to provide you with the information you need as

well as a copy of the written advance notice that he/she gave the beneficiary or his/her

representative.

• Beneficiary Indemnification for Provider Services -- Include a statement related to

the indemnification of the beneficiary or his/her representative when the provider

has been found liable for the denied services.

Include the name, address, and telephone number of the A/B MAC (A, B, or HHH)

where the beneficiary or his/her representative can file a request for

indemnification.

Inform the beneficiary that the following documents must be provided to the A/B

MAC (A, B, or HHH):

o A copy of the denial notice;

o A copy of the bill for the services; and

o A copy of the payment receipt from the provider or any other evidence

showing that the beneficiary paid the provider.

Instruct the beneficiary that the request must be filed within 6 months of the date

of your denial notice (See 42 CFR 411.402(a)(4)).

Specify that if the beneficiary or his/her representative and the provider are not

held liable §§1879(a)(1) and (2) conditions are met, he/she is responsible only for

payment of any deductible, coinsurance, and convenience services and items

normally not covered by Medicare that are furnished during the admission (See

Exhibit 7-20, Condition I).

In addition, specify that if the beneficiary or his/her representative is not held

liable but the provider is held liable, he/she is responsible only for payment of any

convenience services and items normally not covered by Medicare for the denied

period. In this situation, the beneficiary or his/her representative is not

responsible for the denied services including any applicable deductible and

coinsurance (See Exhibit 7-20, Condition II).

• Beneficiary Indemnification for Physician Services -- Include a statement related

to the indemnification of the beneficiary or his/her representative for denied

physician's services (e.g., inpatient procedure, cost outlier with a physician

component, and ambulatory/outpatient surgical denials).

Include the name, address, and telephone number of the A/B MAC (B) where the

beneficiary or his/her representative can file a request for indemnification.

Inform the beneficiary that the following documents must be provided to the A/B

MAC (B):

o A copy of the denial notice;

o A copy of the bill for the services; and

o A copy of the payment receipt from the physician or any other evidence

showing the beneficiary paid the physician.

Instruct the beneficiary that the request must be filed within 6 months of the date

of your denial notice (See 42 CFR 411.402(a)(4)).

For denials involving services billed on an assigned basis by a Medicare

participating or nonparticipating physician, specify that the beneficiary or his/her

representative should contact the A/B MAC (B) for any refund (See Exhibit 7-20,

Conditions III, XI, and XII).

For denials involving services billed on an unassigned basis by a nonparticipating

physician, specify that the beneficiary or his/her representative should contact the

physician for any refund (See Exhibit 7-20, Condition IIIA).

• Beneficiary's Future Payment Liability -- Include a statement related to the

liability for payment of denied services occurring in the future that involve the

same, or reasonably comparable, conditions.

This applies only to initial medical necessity/custodial (level of) care denial

determinations.

Do not include such a statement if the denial is for a procedure that cannot be

repeated (e.g., total removal of an organ).

• Reconsideration Rights -- Include a statement of the reconsideration rights

(including expedited reconsideration, if applicable) of the beneficiary or his/her

representative, provider, and attending physician (See Exhibit 7-21). This applies

only to initial denial determinations.

The statement must specify:

o The places that the beneficiary or his/her representative may file a

reconsideration (i.e., Social Security Administration (SSA) Office,

Railroad Retirement Office, if applicable, or at your office);

o The time requirements to file a request; and

o The possible outcomes of your review as a result of a request for

reconsideration.

• Beneficiary Right To Legal Representation -- Include a statement informing the

beneficiary or his/her representative of the options for obtaining attorney

representation at any step of the appeal process, of the availability of free legal

services organizations, and to contact the local social security office for additional

information, if needed (See §206(c) of the Act). This requirement is applicable to

QIOs involved in the Medicare program by 42 USC 1395(ii). This applies only to

initial medical necessity/custodial (level of) care denial determinations.

Insert the following statement, which shall not be altered, after the reconsideration

rights paragraph in all initial denials where the beneficiary or his/her

representative receives your notification:

o "If you want help with your appeal of this denial determination, you can

have a friend, lawyer, or someone else help you. Some lawyers do not

charge unless you win your appeal. There are groups, such as lawyer

referral services, that can help you find a lawyer. There are also groups,

such as legal aid services, who will give you free legal services if you

qualify."

• Beneficiary Right to Review the Medical Record -- Include a statement informing

the beneficiary or his/her representative of the right to examine his/her complete

medical record and to receive a copy of that record. This applies only to initial

medical necessity/custodial (level of) care denial determinations.

Insert the following statement, which cannot be altered, after the beneficiary right

to legal representation paragraph in all initial denials where the beneficiary or

his/her representative receives your notification:

o "You have the right to examine the complete medical record (and other

pertinent information) that we relied upon in making this denial

determination. Although the hospital is the official repository of the

medical records relevant to stays in the facility, should you wish to

examine the records and other pertinent information for this particular

stay, contact us at the address or telephone number listed above. There is

no charge to examine the material at our office. You may also request a

copy of the medical record and other pertinent information. We will,

however, charge you a reasonable fee for photocopying and mailing this

information."

If the beneficiary or his/her representative requests the record, redact any QIO

deliberations and the names of any QIO review coordinators, physician advisors,

or consultants from the material before its release. All practitioner-specific

information must be released. Disclose the names of all practitioners who were

involved in the patient's treatment and whose names appear in the medical record

or other pertinent information.

NOTE: Do not make notations on pages of the medical record in order to minimize the

amount of redacting required.

Provide the record at a reasonable cost. The cost is limited to the cost of copying,

redacting, and mailing the information.

• Re-review Rights Related to DRG Assignment Changes -- Include a statement of

the re-review or reopening rights of the provider and physician. Re-review or

reopening rights do not apply when the DRG assignment does not change.

Specify the place to file a review (i.e., QIO).

Specify the time requirements for filing such a request.

NOTE: The re-review or reopening rights do not apply to coding changes that do not

affect DRG assignment.

• Signature -- For denial notices include the signature, including title, of the QIO

Medical Director or the signature of the QIO physician to whom the Medical

Director has delegated this authority. If you delegate this authority to your

physician reviewers, do so in accordance with the confidentiality regulations,

which specify that the identity of the reviewer cannot be disclosed unless the

individual gives his/her consent (See 42 CFR 476.101(b) and 133(a)(2)(iii)). The

Billing Error Denial Notice (Exhibit 7-24) may also be signed by the QIO Chief

Executive Officer (CEO) or appropriate designee. DRG assignment changes that

do not involve medical judgment may also be signed by the Accredited Record

Technician or Registered Record Administrator.

7200 - Introduction - (Rev. 4, 07-18-03)

Under your contract with CMS, you are required to conduct medical case review to

determine whether the quality of the services provided meets professionally recognized

standards of care (See 42 CFR 476.71(a)(2)).

7210 - Notification Requirements - (Rev. 4, 07-18-03)

When you identify a potential quality concern, issue a written notice to the provider and

to any physicians apparently involved in the concern. Advise them of your concern, and

offer them an opportunity to discuss the potential concern.

Send notices only to the physicians involved in a concern who can provide you with

information necessary for you to make a quality determination (See Exhibit 7-74). Much

of the information in notices sent to the involved physicians may be identical. However,

preserve the confidential nature of the communication to each physician. Tailor each

notice to elicit each physician's unique perspective on the concern in question. Inform

each physician only of his/her involvement in the potential concern. Do not advise a

physician of another physician's involvement.

Do not needlessly proliferate notices to physicians. Send only those notices necessary for

resolution of the potential concern. If, after the opportunity to discuss, you believe that

an additional physician(s) should be contacted, issue an additional preliminary notice(s),

as appropriate.

Once you have completed your review of the potential quality concern (after the

opportunity to discuss has been offered), issue a written final notice to each party to

whom you sent an initial notice, advising them of your favorable or unfavorable quality

determination. If you conduct a re-review of a confirmed quality concern, issue a written

notice to the provider and any physicians affected by your re-review determination,

advising them of your favorable or unfavorable quality determination.

Issue separate, original notices in all cases. Issuing copies to the provider or physician is

not acceptable.

NOTE: Your agreement with the provider may specify where to send your provider

notices. It is expected that the designated contact(s) would represent both the

administrative and medical staffs (e.g., Chair of the Quality Assurance Committee).

7220 - Basic Elements for Quality Concern Notices - (Rev. 4, 07-18-03)

Your quality concern notices must be clear, informative, and non-threatening (e.g., do not

quote at length from QIO regulations). In addition, all notices must contain the following

basic elements:

A. Heading

The heading of the notice must include:

 Your letterhead;

 The date of the notice;

 The name and address of the addressee; and

 Case-identifying information. Specify the patient's name, patient's health

insurance claim number, provider name, provider number, date of

admission/service, and medical record number (if known).

B. Body

The body of the notice must contain:

 A salutation;

 A brief statement concerning your duties and functions under the Act;

 A brief statement explaining the purpose of your quality review activities and

acknowledging the importance of the provider's/physician's cooperation;

 A brief summary of the background of the case. Specify the name of the patient,

the name of the provider, the procedure, treatment, condition, and/or services

involved, as appropriate; and

 A confidentiality and re-disclosure statement.

C. Signature

The notice must be signed by the medical director or the QIO physician to whom the

medical director has delegated this authority. Include a title with the signature.

7230 - Potential Quality Concern Notices - (Rev. 4, 07-18-03)

In addition to the basic elements listed in §7220, the body of all potential quality concern

notices must contain the following elements:

 A statement that a QIO physician reviewer has reviewed the medical record;

 A summary of the case findings and concerns from the Preliminary Decision

portion of the Physician Reviewer Assessment Format (PRAF) (Attaching a copy

of the PRAF and referring to the attachment is not acceptable). Although you

may reference the PRAF categories for classifying your concerns, do not use the

PRAF numbering scheme (e.g., A.1, B.3, C.40, D.99) in your notice. Include

sufficient detail so that the parties addressed will clearly understand the identified

potential concern;

 A statement that the identified concern is a potential concern;

 A statement offering an opportunity to discuss the case. Specify the method

(either by telephone or in writing is acceptable), the timeframe (20 calendar days),

and that your determination will be made on the basis of the medical record alone

if no response is received within the stated timeframe. Include the name of a QIO

contact person, your address, and telephone number;

 For physician notices, a statement that the provider is also being notified of the

potential quality concern and given an opportunity to discuss the case. Specify

the name of the provider. Do not specify the name of any other physician(s) you

may be notifying;

 For provider notices, a statement that the involved physician(s) is also being

notified of the potential quality concern and given an opportunity to discuss the

case. Specify the name of the physician(s); and

 A statement encouraging the provider and physician to coordinate their responses

to you.

7240 - Final Quality Concern Determination Notices - (Rev. 4, 07-18-03)

A. Confirmed Quality Concern Determination

In addition to the basic elements listed in §7220, the body of these notices must contain

the following elements:

 A statement that a QIO physician reviewer has reviewed the medical record and

any additional information provided during the opportunity for discussion;

 A summary of the case findings and concerns, including a preferred course of

action which would have improved care, from the Initial/Final Decision portion of

the PRAF (Attaching a copy of the PRAF and referring to the attachment is not

acceptable). Although you may reference the categories for classifying your

concerns, do not use the numbering scheme (e.g., A.1, B.3, C.40, D.99) in your

notice;

 A brief statement of your action to be taken. Explain that the results of your

review will be entered into your database for pattern analysis and used for related

analysis activities. Explain that the physician and provider will have ample

opportunity to discuss any patterns involving confirmed quality concerns;

 For physician notices, a statement that the provider is also being notified of the

confirmed quality concern. Specify the name of the provider. Do not specify the

name of any other physician(s) you may be notifying;

 For provider notices, a statement that the involved physician(s) is also being

notified of the confirmed quality concern. Specify the name of the physician(s);

and

 A statement of re-review rights. Specify the method of request (in writing), the

timeframe for the request (30 calendar days), and that the request should include

the reason for disagreement with the determination and any additional information

to be considered in making a re-review determination. Include the name of a QIO

contact person, your address, and telephone number.

B. Favorable Quality Review Determination

In addition to the basic elements listed in §7220, the body of these notices must contain

the following elements:

 A statement that a QIO physician reviewer has reviewed the medical record and

any additional information provided during the opportunity for discussion;

 A summary of the case findings and concerns, including the basis for your

favorable determination, from the Initial/Final Decision portion of the PRAF

(Attaching a copy of the PRAF and referring to the attachment is not acceptable).

Although you may reference the categories for classifying your concerns, do not

use the numbering scheme (e.g., A.1, B.3, C.40, D.99) in your notice;

 A brief statement of your action to be taken. Explain that the results of your

review will be entered into your database for pattern analysis and used for related

analysis activities;

 For physician notices, a statement that the provider is also being notified of your

final determination. Do not specify the name of any other physician(s) you may

be notifying; and

 For provider notices, a statement that the involved physician(s) is also being

notified of your final determination. Specify the name of the physician(s).

7250 - Re-review Quality Concern Notices - (Rev. 4, 07-18-03)

A. Confirmed Quality Concern Upheld

In addition to the basic elements listed in §7220, the body of these notices must contain

the following elements:

 The date of the re-review request;

 An explanation that the physician reviewer who conducted the re-review was not

involved in the original quality concern determination;

 A statement that the QIO physician reviewer has re-examined the medical record

and any additional information provided by the provider and/or physician;

 A summary of the case findings and concerns, including a preferred course of

action which would have improved care, from the Reconsideration/Re-review

Decision portion of the PRAF (Attaching a copy of the PRAF and referring to the

attachment is not acceptable). Although you may reference the categories for

classifying your concerns, do not use the numbering scheme (e.g., A.1, B.3, C.40,

D.99) in your notice;

 A brief statement of the action to be taken. Explain that the results of your review

will be entered into your database for pattern analysis, used for your related

pattern analysis activities, and that the physician and provider will have ample

opportunity to discuss any patterns involving quality concerns;

 A statement that the re-review determination is final (i.e., no further appeals

apply);

 For physician notices, a statement that the provider is also being notified of your

re-review determination. Specify the name of the provider. Do not specify the

name of any other physician(s) you may be notifying; and

 For provider notices, a statement that the affected physician(s) is also being

notified of your re-review determination. Specify the name of the physician(s).

B. Confirmed Quality Concern Reversed

In addition to the basic elements listed in §7220, the body of these notices must contain

the following elements:

 The date of the re-review request;

 An explanation that the physician reviewer who conducted the re-review was not

involved in the original quality concern determination;

 A statement that the QIO physician reviewer has re-examined the medical record

and any additional information provided by the provider and/or physician;

 A summary of the case findings and concerns, including the basis for your

favorable determination, from the Reconsideration/Re-review Decision portion of

the PRAF (Attaching a copy of the PRAF and referring to the attachment is not

acceptable). Although you may reference the categories for classifying your

concerns, do not use the numbering scheme (e.g., A.1, B.3, C.40, D.99) in your

notice;

 A brief statement of the action to be taken. Explain that the results of your review

will be entered into your database for pattern analysis and your pattern analysis

activities;

 For physician notices, a statement that the provider is also being notified of your

re-review determination. Specify the name of the provider. Do not specify the

name of any other physician(s) you may be notifying; and

 For provider notices, a statement that the affected physician(s) is also being

notified of your re-review determination. Specify the name of the physician(s).