CMS Rulings Are Not Law; Yet Followed By ALJs

July 12, 2022

I often feel that I have gone through the looking glass with Alice when it comes to the behavior of the Centers for Medicare and Medicaid (CMS). I appreciate attorney Knicole Emanuel’s clear explanation of even the most ridiculously complicated aspects of CMS. She recently posted this blog about the fact that while CMS rulings are not “law,” they are often followed by Administrative Law Judges (ALJs) when clinicians appeal payment denials by the growing alphabet soup of auditors.

The most common reason for payment denial is “lack of medical necessity.” There is an actual law stating that because the Medicare and/or Medicaid auditor never actually saw the patient, in an audit, the treating physician should be allowed deference with the decision that medical necessity exists. However, CMS has a ruling (without the weight of actual law) that contradicts this. So, some ALJs ignore the law and go with CMS policy. A clinician would have to wait years and spend a lot of money to get in front of a federal district judge in order to get a ruling based on law.

My experience is that hospitals in particular are prepared to just write checks to CMS rather than fight audits – and the auditors who are paid on a percentage of these clawbacks expect that. As wound care begins to shift into the private doctor’s office – doctors are not going to be able to just may paybacks without a fight. Defending against audits will become more and more important – and it seems one of the most important areas to focus on is that of “medical necessity.”

CMS Rulings Are Not Law; Yet Followed By ALJs

Caroline Fife, MD

Dr. Fife is Co-Founder and Chief Medical Officer of Intellicure, Executive Director of the US Wound Registry, and Editor of Today’s Wound Clinic.

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