100-10 Quality Improvement Organization Manual: Chapter 7 - Denials, Reconsiderations, Appeals

Quality Improvement Organization Manual
Chapter 7 - Denials, Reconsiderations, Appeals
Table Of Contents
(Rev. 18, 10-10-14)
Transmittals for Chapter 7
REVIEW OF HOSPITAL-ISSUED NOTICE OF NON-COVERAGE (HINN) AND
NOTICE OF DISCHARGE AND MEDICARE APPEAL RIGHTS (NODMAR)
7000 - Hospital-Issued Notice of Non-coverage (HINN) Citations and Authority
7005 - Issuance of Hospital-Issued Notice of Non-coverage
7010 - Content of Hospital-Issued Notice of Non-coverage
7015 - Beneficiary Request for Hospital-Issued Notice of Non-coverage Review by a
QIO
7020 - Solicitation of Views Regarding Hospital-Issued Notice of Non-coverage
7025 - Monitoring of Hospital-Issued Notice of Non-coverage
7030 - Beneficiary Liability Related to Review of Hospital-Issued Notice of Non-
coverage
7035 - Provider Liability
7040 - Right to Reconsideration
7045 - Notice of Discharge and Medicare Appeal Rights Citations and Authority
7050 - Notice of Discharge and Medicare Appeal Rights
7055 - Medicare Enrollee Request for Quality Improvement Organization Immediate
Review
DENIAL DETERMINATIONS
7100 - Authority
7101 - Types of Denial Determination
7102 - Denial and Reopening Timeframes
7105 - Notification of Denial
7110 - Timing of Denial Notice
7115 - Content of Denial Notice
NOTICES FOR QUALITY OF CARE DETERMINATIONS
7200 - Introduction
7210 - Notification Requirements
7220 - Basic Elements for Quality Concern Notices
7230 - Potential Quality Concern Notices
7240 - Final Quality Concern Determination Notices
7250 - Review Quality Concern Notices

RE-REVIEWS
7300 - Diagnosis Related Groups (DRG) Validation Re-reviews
7310 - Re-review of Quality Concerns
RECONSIDERATION DETERMINATIONS
7400 - Statutory and Regulatory Requirements
7410 - Requests for Reconsideration
7420 - QIO Reconsiderations
7430 - Reconsideration Process
7440 - Circumvention of Prospective Payment System (PPS)
HEARINGS AND FURTHER APPEALS
7500 - Background
7510 - Preparing the Acknowledgment Letter
7520 - Assembling the Hearing Claim File
7530 - Pre-hearing Case Review
7540 - Routing the Hearing Claim File to Office of Hearings & Appeals (OHA)
7550 - Reporting Requirements
7560 - Hearings by an Administrative Law Judge (ALJ)
7570 - Appeals Council (AC) Review
7580 - Judicial Review
EXHIBITS
Exhibit 7-20 - Limitation of Liability Model Paragraphs
Exhibit 7-21 - Reconsideration Model Paragraphs
Exhibit 7-23 - Record Not Submitted Timely Denial Model Notice
Exhibit 7-24 - Billing Error Denial Model Notice
Exhibit 7-25 - Preadmission Denial Model Notice
Exhibit 7-26 - Admission Denial Model Notices
Exhibit 7-27 - Continued-stay Denial Model Notices
Exhibit 7-28 - Procedure Denial Model Notices
Exhibit 7-29 - Day Outlier Denial Model Notice
Exhibit 7-30 - Cost Outlier Denial Model Notices
Exhibit 7-31 - DRG Changes as a Result of DRG Validation Model Notice
Exhibit 7-32 - Outpatient/Ambulatory Surgery Denial Model Notices
Exhibit 7-33 - Continued-stay Denial Completed Notice
Exhibit 7-34 - Circumvention of Prospective Payment System (PPS) Denial Model
Notice
Exhibit 7-40 - Reconsideration Notices -- Hearings Model Paragraphs
Exhibit 7-41 - Reconsideration Model Notice -- Preadmission Denial
Exhibit 7-42 - Reconsideration Model Notice -- Admission Denial

Exhibit 7-43 - Reconsideration Model Notice -- Continued-stay Denial
Exhibit 7-44 - Reconsideration Model Notice -- Procedure Denial
Exhibit 7-45 - Reconsideration Model Notice -- Day Outlier Denial
Exhibit 7-46 - Reconsideration Model Notice -- Cost Outlier Denial
Exhibit 7-47 - Re-review Model Notice -- DRG Changes as a Result of DRG Validation
Exhibit 7-48 - Reconsideration Model Notice -- Outpatient/Ambulatory Surgery Denial
Exhibit 7-49 - Reconsideration Completed Notice -- Continued-stay Denial
Exhibit 7-50 - Reconsideration Model Notice -- Circumvention of Prospective Payment
System (PPS)
Exhibit 7-60 - Sample Acknowledgment Letter to Beneficiary/Representative When
Request Is Sent to the Hearing Office
Exhibit 7-61 - How to Locate the Correct Hearing Office
Exhibit 7-71 - Potential Quality Concern Model Notice
Exhibit 7-72 - Confirmed Quality Concern Model Notice
Exhibit 7-73 - Re-review Upheld Quality Concern Model Notice
Exhibit 7-74 - Examples of Potential Quality Concern Scenarios

7000 - Hospital-Issued Notice of Non-coverage (HINN) Citations and
Authority - (Rev. 4, 07-18-03)
The statutory authorities applicable to your review of a Hospital-Issued Notice of Non-
coverage (HINN) are found at §1154(e), §1154(a), and §1879 of the Social Security Act
(the Act). The regulatory authorities for issuing a HINN are found at 42 CFR 489.34, 42
CFR 411.404, and 42 CFR 412.42(c).
Hospitals (including ones with swing beds) have the authority to issue notices of non-
coverage to beneficiaries or their representatives if the hospital determines that the care
the beneficiary is receiving, or is about to receive, is not covered because it is not
medically necessary, not delivered in the most appropriate setting, or custodial in nature.
A HINN may be given prior to admission, at admission, or at any point during the
inpatient stay (HINNs are discussed in detail in the Hospital Manual, §§414.3-414.10,
and model hospital HINNs are contained in §414.11).
NOTE: The hospital is not required to issue a HINN when it does not plan to bill the
beneficiary or his/her representative.
Section 1154(e) of the Act requires you to review all hospital continued-stay notices of
non-coverage upon a request by a Medicare beneficiary, his/her representative, or a
hospital. This statutory provision does not apply to Quality Improvement Organization
(QIO) review involving Skilled Nursing Facility (SNF) swing bed services.
7005 - Issuance of Hospital-Issued Notice of Non-coverage –
(Rev. 4, 07-18-03)
A. Preadmission/Admission HINN
The hospital issues a notice of non-coverage when it determines that the admission is not
medically necessary, inappropriate, or custodial in nature. The hospital is not required to
obtain concurrence from you or the attending physician prior to issuing the preadmission
or admission notice of non-coverage. This also applies to HINNs related to direct
admissions to swing beds (i.e., beneficiary is admitted to the swing bed after he/she was
discharged from another hospital) and when the hospital determines that the beneficiary
does not need SNF services.
B. Continued-stay HINN
A hospital may issue a continued-stay notice of non-coverage when it determines that a
beneficiary no longer requires continued inpatient care and either the attending physician
or you concur. Before a hospital can issue a continued-stay notice of non-coverage, it
must consider the admission to be covered.

 	Attending Physician Concurs -- If the attending physician concurs in writing (e.g.,
written discharge order) with the hospital's determination that the beneficiary no
longer requires inpatient care, the hospital may issue a notice of non-coverage to
the beneficiary.
 	Attending Physician Does Not Concur -- The hospital is required to give a notice
to the beneficiary or his/her representative when the beneficiary's physician
disagrees with the hospital's proposed notice of non-coverage and you are
requested to review the case (See Hospital Manual §414.11, Exhibit 10). The
hospital may use its own letterhead, but it may not alter or change the language.
The notice must be given to the beneficiary or his/her representative concurrently
when the hospital requests your review. Develop procedures to monitor issuance
of that notice to beneficiaries or their representatives. For example, at the time
you solicit the beneficiary's views, ask the beneficiary or his/her representative if
he/she received the notice. The hospital may request, either by phone or in
writing, that you review the case immediately. Complete your review within 2
working days of either the hospital's request or receipt of any additional
information you requested (such as copies of medical records). Determine, on a
case-by-case basis, whether a medical record is needed to make the determination
as to the medical necessity and appropriateness of the admission and days of care.
If you concur with the hospital's decision, notify the hospital that it may issue its
HINN and issue your denial notice.
NOTE: In cases where the beneficiary requires a SNF level of care, the hospital cannot
issue a notice of non-coverage if a SNF bed is not available. Medicare pays hospitals for
days awaiting placement until a SNF bed is available, and the medical record
documentation indicates that SNF placement is actively being sought.
 	Advance Continued-stay HINN -- The hospital could project and determine when
acute care furnished to a beneficiary would end and issue a continued-stay notice
of non-coverage (with concurrence from you or the attending physician). If a
hospital is able to determine in advance that the beneficiary will not require acute
inpatient hospital care as of a certain date, it may give the notice of non-coverage
in advance of that date (but ordinarily no earlier than 3 days before the first non-
covered day).
EXAMPLE: The beneficiary had hip surgery, and he/she requires rehabilitative services
but not at an acute hospital level of care. The hospital determines that the most
appropriate setting for those services would be a SNF, and it makes arrangements to
transfer the beneficiary (within 3 days) because a SNF bed will be available.
EXAMPLE: The beneficiary is recovering from an uneventful post-surgical period after
a cholecystectomy. The hospital can predict that within 2 days the beneficiary will no
longer require injections for pain control and will tolerate a regular diet and ambulation.

The advance notice does not relieve the hospital or the attending physician of the
responsibility for monitoring the beneficiary's condition/level of care changes or for
making appropriate discharge planning. If the beneficiary's condition/level of care
changes after the notice is issued and further acute care is required (or the SNF bed is no
longer available), then the hospital must rescind its notice of non-coverage.
C. Combined Notices in Swing Bed Situations
The "combined notice" applies to situations where the beneficiary is in an acute care
hospital that has beds certified as swing beds, and he/she no longer requires an acute level
of care.
The discharge from the acute care bed and admission to the SNF or Nursing Facility (NF)
swing bed is essentially a paper transaction with no physical movement of the
beneficiary. The purpose of the combined notice is to notify the beneficiary or his/her
representative that neither the acute nor SNF care is medically necessary or that the
beneficiary no longer requires acute care hospital services but will begin to receive SNF
swing bed services. The combined notice also notifies the beneficiary or his/her
representative that if he/she disagrees with the hospital's decision an immediate QIO
review may be requested (See §7015.B.1.b).
The hospital must issue the combined notice of non-coverage with either the attending
physician's or your concurrence. The two post-discharge planning days applicable to
Prospective Payment System (PPS) hospital cases (See 42 CFR 412.42(c)) would not
apply to this situation. The beneficiary's or his/her representative's liability for payment
begins the day following the date of receipt of the notice. The beneficiary may request
your immediate review; however, the beneficiary's liability remains the same as specified
in the HINN.
D. Continued-stay HINN in Swing Beds Treated as SNF Beds
The hospital does not need the attending physician's or your concurrence to issue a
continued-stay HINN to a beneficiary when SNF swing bed services are no longer
needed. The immediate review provisions in §1154(e) of the Act do not apply to stays in
SNF swing beds.
7010 - Content of Hospital-Issued Notice of Non-coverage –
(Rev. 4, 07-18-03)
You are required to monitor the content of the HINN to determine whether the
information is accurate/appropriate. The HINN to the beneficiary or his/her
representative must conform to the content (but need not be a duplicate) of the model
letters contained in Exhibits 1 through 10 of §414.11 of the Hospital Manual (See §414.5
for instructions concerning the content of hospital HINNs).

7015 - Beneficiary Request for Review of Hospital-Issued Notice of Non-
coverage by a QIO - (Rev. 4, 07-18-03)
A. Preadmission/Admission HINN
When a beneficiary or his/her representative requests review of a preadmission or
admission HINN, review any records pertaining to health care services furnished.
Include records pertaining to any inpatient hospital services provided or proposed to be
provided to the Medicare beneficiary whether or not, in the hospital's view, the services
are covered (See 42 CFR 476.88(a) and §§1154 and 1156 of the Act).
 	Immediate Review -- If the beneficiary or his/her representative disagrees with
the hospital preadmission notice, he/she may request your review, by telephone or
in writing, within 3 calendar days of receipt of the HINN. If admitted, the
beneficiary or his/her representative may request your review at any point during
the stay. In either situation review the case within 2 working days following the
beneficiary's or his/her representative's request, and issue either a denial notice or
a notice explaining that the care would be, or is, covered.
 	Review After Discharge or When Beneficiary Was Not Admitted to Hospital --
The beneficiary or his/her representative may request review within 30 calendar
days after receipt of the notice. Complete this review within the timeframe
specified for any retrospective review (See §4540). Once your review is
completed issue either a denial notice or a notice explaining that the care is
covered.
B. Continued-stay HINN
The beneficiary or his/her representative may request your review, as described below,
when the hospital issues a continued-stay notice of non-coverage with the concurrence of
the attending physician (see §7005.B.1). If the hospital issues a continued-stay notice of
non-coverage with your concurrence, the beneficiary may request a reconsideration of
your determination (see §7040).
 	Beneficiary Request for QIO Immediate Review of a HINN -- If the beneficiary
or his/her representative disagrees with the HINN and remains in the hospital,
he/she may request (not later than noon of the first working day after the day the
notice was received) an immediate review by you. This request for review may
be made by telephone or in writing.
• 	The hospital must provide the medical records you require by close of
business of the first working day after the date that the beneficiary
receives the notice. Develop a procedure with the hospital that will ensure
timely receipt of records (e.g., express mail service).

• 	When a beneficiary or his/her representative requests your review,
perform the review regardless of whether or not the hospital charges for
continued-stay, or the beneficiary is liable for such care.
 	Prior to rendering a determination, solicit the views of the
beneficiary or his/her representative, hospital, and attending
physician (See §7020).
 	Complete the requested review and notify the beneficiary or
his/her representative, the attending physician, and the hospital of
your determination (whether adverse or favorable) within one full
working day after the date of receiving the request and the required
medical records.
• 	Make your notification initially by telephone and follow up with a written
notification either:
 	Disagreeing with the hospital's decision (i.e., notifying the
beneficiary that he/she requires covered care); or
 	Agreeing with the hospital's determination (i.e., issuing your initial
denial notice). In addition, the beneficiary will also receive the
HINN.
• 	Document the telephone notification (e.g., time of call, information
presented, and names of parties contacted). Retain this documentation in
your case files.
 	Other Review While the Beneficiary Is In the Hospital -- If the beneficiary or
his/her representative does not request your review by noon of the first working
day after receipt of the HINN and remains in the hospital, he/she may still request
your review at any point during the stay. The request may be made by telephone
or in writing. Review the case within 2 working days following the beneficiary's
or his/her representative's request, and issue either a denial notice or a notice
explaining that the care is covered.
 	Review After Discharge -- If the beneficiary is discharged from the hospital,
he/she or his/her representative may still request review within 30 calendar days
after receipt of the HINN or at any time, for good cause. Complete this review
within 30 calendar days of receipt of the medical records, and issue either a denial
notice or a notice explaining that the care is covered.
NOTE: After a beneficiary has exhausted all of his/her hospital benefit days (and the
length of stay has passed the day outlier threshold), you are not obligated to review the
hospital's decision regarding the beneficiary's need for continued hospital care for those
days. Any advisory determination you make related to these exhausted benefit days is

not subject to your reconsideration process (and further appeal rights) as it is not an initial
determination. Your initial determination pertaining to inpatient days prior to exhausting
benefit days or within the outlier threshold is binding on all parties (i.e., you can approve
or deny Medicare payment, but it is still subject to appeal by the beneficiary).
C. Continued-stay HINN Rescinded -- If the hospital notifies you that the HINN has
been rescinded after requesting the medical records:
 	Instruct the hospital to submit the medical records (including a copy of the notice
rescinding the HINN);
 	Review the medical record and determine whether or not the hospital acted
appropriately in rescinding the notice;
 	Notify the beneficiary that the HINN was rescinded if you agree with the
hospital’s action and that he or she should have received a written notification
from the hospital; and
 	Issue your written initial determination (including a determination of the
beneficiary’s liability for payment under §1869 of the Act) if you disagree with
the hospital’s rescinded HINN.
7020 - Solicitation of Views Regarding Hospital-Issued Notice of Non-
coverage - (Rev. 4, 07-18-03)
A. Beneficiary's Views
When you conduct a review either because the beneficiary or his/her representative
requests one (See §7015.B.1) or the hospital requests your review because the attending
physician does not agree with its decision to issue a notice of non-coverage (See
§7005.B.2), solicit the views of the beneficiary or his/her representative. This may be
done by telephone. Present information solicited to the physician reviewer for use in the
review. Also, make the information part of your case file. Solicit the views of the
beneficiary or his/her representative at the same time as his/her telephone request for
review to minimize the burden on the beneficiary.
Make every attempt to contact the beneficiary or his/her representative within the
timeframe allotted for review completion. If the beneficiary or his/her representative
cannot be contacted by the end of the first full working day after the request for review
and receipt of the medical record, make your review determination without the
beneficiary's or his/her representative's views. Retain documentation of your attempts to
contact the beneficiary/representative.
B. Discussion With the Hospital and Attending Physician

Give the attending physician and provider the opportunity to discuss the case prior to
your determination, whether it will be adverse or favorable. Make every attempt to
contact the hospital and attending physician before you make a determination.
7025 - Monitoring of Hospital-Issued Notice of Non-coverage –
(Rev. 4, 07-18-03)
A. Purpose
Monitor the content of the HINN and the accuracy of the hospital's determination (see
Hospital Manual, §414.5).
 	Upon a beneficiary's or a hospital's request for review, determine whether the
HINN is appropriate and accurate (See §§7005 and 7020).
 	For HINNs (e.g., admission) that are issued and no request for review is made,
ensure no less than every 6 months a year that:
• 	The hospital followed the appropriate process;
• 	The content of the notice is accurate/appropriate; and
• 	The hospital's decision to issue the notice is correct.
 	Monitor the hospital to ensure that it is issuing the Hospital Notice to Beneficiary
of QIO Review of Need for Continued Hospitalization timely to the beneficiary
when your review is requested (See Hospital Manual, §414.11, Exhibit 10).
B. Ongoing Monitoring
 	Case Selection -- Conduct review of cases as follows:
• 	Cases selected monthly by CMS from the processed claims data where the
hospital has issued a HINN and there is beneficiary’s liability for payment.
• 	Cases you have selected (no more than 6 months basis) by using the copy
of the (preadmission, admission, or continued-stay) HINN submitted to
you by the facility within 3 working days of the HINN issuance.
NOTE: Hospitals are required to submit a bill for all inpatient stays, including those for
which no payment can be made. Although no monies are involved with "No-pay bills," a
claim is required because hospitalization could extend a Medicare beneficiary's benefit
period (see Hospital Manual, §411).
 	Timing of Review -- For all cases selected for review, request medical records
and complete review according to the timeframes for retrospective review.

Reconcile the CMS selected claims data with copies of the HINN you received to
ensure that the hospital is notifying you of all notices issued.
If you identify a hospital's failure to submit no-pay claims to the intermediary, work with
the intermediary to establish a procedure to address/resolve the hospital's billing problem.
The procedure should specify that if after a reasonable period of time (e.g., 6 months or
longer) you are unable to reconcile the information between submission of the HINN and
the claim data, you notify the intermediary and the hospital of the problem. The
procedure must delineate the party (you or the intermediary) who is responsible for
sending the hospital formal notification of noncompliance with the billing instructions
(See Hospital Manual, §411). If the hospital does not submit a claim to the intermediary
(after the specified period of time), notify the respective CMS Regional Office (RO) to
take necessary action under its authority to bring the hospital into compliance with
program requirements.
 	Review Process -- For cases involving preadmission, admission, and continued-
stay notices, review:
• 	All notices received to determine whether the language content of the
HINN met the requirements (See Hospital Manual, §414.5);
• 	HINN cases selected by you (from “all notices“ received) to determine the
appropriateness of the notice (i.e., the care was not covered from the point
determined by the hospital and the content of the notice met the
requirements of §414.5 of the Hospital Manual);
• 	All cases selected by CMS where the beneficiary is liable for charges for
services furnished after notification (See §4230.D). Review these cases to
ensure that the beneficiary is not held liable for charges covered by
Medicare as specified at §7025;
• 	All cases involving admission and continued-stay notices identified from
processed claims data where the hospital failed to send you a copy.
Examine these cases to ensure that abuse is not involved (e.g., a hospital is
withholding copies of inaccurate notices to avoid QIO review);
• 	All cases where the medical information you used for approval was
received by telephone and the HINN issued significantly differs from the
claim submitted to the intermediary, or where the past history of the
facility indicates poor compliance; and
• 	All cases where you received a beneficiary complaint that was unrelated to
the issuance of a hospital notice. However, if during your review evidence
is found that a HINN was issued, you should review the HINN as well as
the complaint issue (e.g., cases received under Hospital Payment
Monitoring Program (HPMP)).

NOTE: For all continued-stay cases, determine the medical necessity and
appropriateness of the admission (see §7005.B.2).
 	HINN in the Outpatient Setting -- Review notices issued to Medicare outpatients
undergoing surgery if the notice relates to denial of admission to the hospital.
Review these notices if the beneficiary or his/her representative bring the issue to
your attention or if the case is already under review.
 	HINN Related to Exclusion and Coverage Issues -- The intermediary is
responsible for medical review of claims that involve general exclusion and
coverage issues, and review of HINNs associated with those denials. If the
intermediary refers a coverage issue case (e.g., dental or cosmetic surgery) to you
because a medical necessity review/determination is needed, then review the case
and the HINN, if applicable.
C. Notification of QIO Determination
Upon completion of notice review, take the following actions:
 	Admission/Preadmission Notice of Non-coverage
• 	Issue a notice to all affected parties indicating either that the admission
was non-covered (i.e., the hospital was correct in issuing the notice) or
that the Medicare program would have covered the admission (i.e., the
hospital notice was not issued correctly).
• 	If Medicare should have covered the admission and the beneficiary was
admitted after receipt of notice, notify the hospital, attending physician,
beneficiary, and intermediary that the notice is invalid. Instruct the
hospital to refund any monies collected from the beneficiary except for the
applicable coinsurance and deductible amounts, personal convenience
services, and items not covered by Medicare. The hospital may then
submit a claim for Medicare payment, if appropriate.
 	Continued-stay HINN
• 	For PPS cases, if there is a Diagnosis Related Group (DRG) change as a
result of DRG validation, issue the notice;
• 	If you concur with the hospital that continued inpatient hospital care was
not necessary from the point determined by the hospital, issue the denial
notice and inform the affected parties that you concur with the hospital's
decision (See §§7100-7115);
• 	If you determine that the hospital level of care ended earlier than
determined by the hospital and additional days of care or costs are denied

(non-PPS cases or PPS outlier cases), issue the denial notice (See §§7100-
7115);
• 	If you determine that the admission was not medically necessary or
appropriate, issue an admission denial and determine which party is liable;
or
• 	If you determine that the hospital's finding is invalid (i.e., the beneficiary
required continued inpatient care) and the beneficiary received services for
which he/she could be charged, notify the hospital, attending physician,
intermediary, and beneficiary. These HINNs are considered inappropriate
(See subsection D). Specify in your notice that the charges were invalid
and, to the extent collected, must be refunded by the hospital to the
beneficiary. The hospital may submit the claim for Medicare payment.
NOTE: Except for those cases reviewed at the beneficiary's or hospital's request, you do
not have to issue a denial notice in cases where you agree with the HINN and the
beneficiary was not liable for the charges.
D. Inappropriate HINN
An inappropriately issued HINN would be any case where:
 	The hospital's finding is invalid (e.g., where the admission was covered (See
subsection C.1), and where continued acute care was medically necessary (See
subsection C.2));
 	The content of the notice is not in compliance with §414.5 of the Hospital
Manual;
 	The patient was charged for hospital services without a notice;
 	The patient requires SNF care and there was no available SNF bed (See §7005);
 	A continued-stay HINN is issued without your concurrence or the concurrence of
the attending physician (except in cases where the level of care changes from SNF
swing bed services to NF); and
 	The beneficiary did not receive written notice when discharged from acute care
and admitted to SNF or NF swing bed services.
NOTE: In cases involving an admission HINN where you determine that the
beneficiary's condition changed from non-acute to acute, assign a deemed date of
admission. Because you agree that the HINN was not issued in error, do not count the
case against the hospital as long as the hospital did not charge the beneficiary for the
covered acute inpatient services.

E. Corrective Action
Take corrective action immediately. If, during the course of your review, you detect that
a particular hospital has issued an inappropriate notice, determine whether:
 	The hospital issued a notice of non-coverage that could result in inappropriate
collection of monies from a beneficiary. For example:
• 	In a beneficiary request for an immediate review of a HINN with attending
physician concurrence, a hospital notice indicates that if you review the
case and deny the care, the beneficiary will be liable beginning the third
day after receipt of the notice; or
• 	A beneficiary complained that the hospital advised him/her that the care
was non-covered, but a written notice was never issued.
 	The hospital issued a notice that the admission or continued inpatient hospital care
was non-covered, but a copy was not submitted to you and the case was identified
from the processed claim data (See §7025.B.1); or
 	The notices are improper but do not transfer liability for payment to the
beneficiary (e.g., the HINN states that Medicare made the decision), and the
hospital refuses to change its notices to bring them into conformance with
requirements.
Advise the hospital that issuing invalid notices that result in an improper collection of
monies from beneficiaries is a violation of the hospital's Medicare provider agreement.
The hospital must make immediate restitution except for the applicable deductible and
coinsurance amounts, and if applicable, report the refund (proof of payment) to you and
the intermediary.
The hospital's failure to correct its notices and bring them into conformance with the
requirements will lead to referral of the hospital to the regional Office of Investigations,
Office of Inspector General, Health & Human Services, for enforcement under
§1886(f)(2)(B) of the Act.
Other examples of inappropriate notices and corrective actions include, but are not
limited to:
 	Cases, in which you initially concurred with the hospital on the issuance of the
notices but upon reconsideration or retrospective validation review (See
§7005.B.2) it is determined that in two or more cases the notices should not have
been given (e.g., pertinent information on the cases was not provided), perform
the notice review of cases where the attending physician and hospital do not
concur by requiring medical records on every request for review; and

 	Cases, in which a pattern of abuse is identified (e.g., where you determine that
inpatient care was medically necessary but a notice of non-coverage was given)
that meets the definition of a substantial violation in a substantial number of cases
or a gross and flagrant violation, develop a sanction recommendation in
accordance with §§9000-9070.
7030 - Beneficiary Liability Related to Review of Hospital-Issued Notice
of Non-coverage - (Rev. 4, 07-18-03)
For beneficiary liability determination instructions, see §4230.D.
7035 - Provider Liability - (Rev. 4, 07-18-03)
A provider is considered to have knowledge as of the date of notice that furnished (or
proposed) services were non-covered if it issued a notice of non-coverage to the
beneficiary (See 42 CFR 411.406(d)).
7040 - Right to Reconsideration - (Rev. 4, 07-18-03)
A. You Disagree With the Hospital's Determination
If you disagree with the hospital's determination of non-coverage (i.e., you determine that
the care was covered), your decision is not subject to reconsideration as this is neither a
denial determination nor a QIO determination under §1154 of the Act.
B. You Agree With the Hospital's Determination
If you agree with the hospital's determination either prior to or after issuance of the
hospital's notice, issue a denial notice. Your determination is subject to reconsideration
in accordance with 42 CFR Part 478 and instructions found in §§7100-7115.
7045 - Notice of Discharge and Medicare Appeal Rights Citations and
Authority - (Rev. 4, 07-18-03)
Section 4001 of the Balanced Budget Act of 1997 (BBA) (Public Law 105-33) enacted
August 5, 1997, added §§1851 through 1859 to the Social Security Act (the Act) to
establish a new Part C of the Medicare program known as the Medicare + Choice (M+C)
Program. Medicare Part C establishes a new authority permitting contracts between CMS
and a variety of different managed care and fee-for-service entities (e.g., coordinated care
plans). Regulations require that each M+C enrollee must receive a Notice of Non-
coverage (NONC) before being released from the hospital once it is determined that
inpatient hospital care is no longer necessary (See 42 CFR 422.620). The NONC is now
referred to as the Notice of Discharge and Medicare Appeal Rights (NODMAR). The
enrollee remains entitled to inpatient hospital care until he/she receives the NONC of that
care. An enrollee or his/her representative that disagree with the hospital or M+C

determination may only obtain QIO review of the NODMAR by requesting an immediate
QIO review (See 42 CFR 422.622).
Until January 1, 2003, existing cost-based contracts established under §1876 of the Act
are governed by regulatory provisions in 42 CFR Part 417 (See §1876(h)(5)(B)).
Included in that Part are two protections available to managed care enrollees who believe
they are being discharged prematurely from a hospital: immediate QIO review as
provided by 42 CFR 417.605 or expedited internal review by the HMO or CMP (See 42
CFR 417.609). The regulatory authority for these organizations to issue NODMARs is
found at 42 CFR 417.440(f).
7050 - Notice of Discharge and Medicare Appeal Rights –
(Rev. 4, 07-18-03)
The Medicare+Choice Organization (M+CO) or the hospital (as delegated) issues the
NODMAR with the physician's concurrence to the M+C enrollee. The physician's
concurrence acknowledges agreement that inpatient hospital care is no longer necessary.
A. When the M+CO Issues the NODMAR
The M+CO issues the NODMAR to the M+C enrollee once the required concurrence of
the physician who is responsible for the enrollee's hospital care has been obtained (See 42
CFR 422.620(b)).
B. When Hospital Accepts Delegation
If the M+CO allows the hospital to make the non-coverage/discharge determination
(delegation), the hospital must obtain concurrence from the contracting physician
responsible for the enrollee's hospital care or of another physician as authorized by the
M+CO (see 42 CFR 422.620(d)).
C. Content of NODMAR
The NODMAR must include the following information:
 	The reason why inpatient hospital care is no longer needed;
 	The effective date of the enrollee's liability for continued inpatient care; and
 	The enrollee's appeal rights.
D. QIO Responsibility -- You are not required to review or educate the plans regarding
the content of the NODMAR. However, if you find an inappropriate NODMAR (e.g.,
the liability date is missing) during the course of your review, you are expected to report
such findings to the CMS RO plan manager through your Project Officer.

7055 - Medicare Enrollee Request for Quality Improvement
Organization (QIO) Immediate Review - (Rev. 4, 07-18-03)
A. Enrollee Request
If the Medicare enrollee or his/her representative disagree with the NODMAR and the
Medicare enrollee remains in the hospital, he/she may request (no later than noon of the
first working day after the day the notice was received) an immediate review by you.
This request for review may be made by telephone or in writing (See 42 CFR 422.622).
NOTE: In cases involving a M+CO located outside the QIO review area, the request for
immediate QIO review must be made to and reviewed by the QIO that has the agreement
(under 42 CFR 476.78) with the hospital treating the enrollee, not the QIO with the
agreement with the M+CO. This means regardless of whether the determination was
made by a M+CO or a hospital, the QIO that has the agreement with the M+CO is not
involved (see chapter 3, for the Memorandum of Agreement requirement related to
NODMAR).
B. M+C Notification
On the day that you receive the enrollee's request for an immediate review, you must
notify the M+CO.
C. QIO Request for Medical Information
The M+CO must take the following actions once an enrollee's request for an immediate
review is confirmed:
 	The M+CO must supply any information that you require to conduct your review.
This information must be made available to you, by telephone or in writing, by
close of business of the first full working day immediately following the day the
enrollee submits the request for review.
 	The M+CO must contact the hospital and request that the enrollee's medical
records and other pertinent information be sent to you by close of business of the
first full working day immediately following the organization's request.
D. QIO Immediate Review
 	Solicitation of Views -- You must solicit the view of the enrollee or his/her
representative that requested the immediate review (See §7020).
 	QIO Review Determination -- Once you have received all the necessary
information from the hospital or the organization or both (e.g., medical records),
review the case and notify the enrollee, the hospital, and the M+CO of your
determination by close of business of the first working day following receipt of all

pertinent information. Make your notification initially by telephone and follow
up with a written notification (See §7015.B.1).
E. Enrollee Liability Protection
If the M+CO authorized coverage of the inpatient admission directly or by delegation (or
the admission constitutes emergency or urgently needed services as described in 42 CFR
422.2 and 422.112(c)), the organization continues to be financially responsible for the
costs of the hospital stay when a timely appeal is filed until noon of the calendar day
following the day you notify the enrollee of your decision.
NOTE: The hospital may not charge the M+CO (or the enrollee) if it was the hospital
(acting on behalf of the enrollee) that filed the request for immediate QIO review and the
QIO upholds the non-coverage determination made by the M+CO.
F. Untimely Request for QIO Immediate Review
If the request for an immediate review is not filed timely by the Medicare enrollee or
his/her representative, do not review the case.
Instructions found at 42 CFR 422.622(a)(2) provide an enrollee who fails to make a
timely request for QIO review the fall-back option of requesting an expedited
reconsideration from the M+CO. You must notify the beneficiary that his/her case is
being referred to the M+CO for an expedited reconsideration (72 hour fast review).
NOTE: The beneficiary is not entitled to subsequent review by the M+CO under the
regulations at 42 CFR 422.582 and 42 CFR 422.584 once a QIO review is requested.
Instead, the beneficiary has further appeal rights under 42 CFR 478.
G. NODMAR Rescinded
If the M+CO notifies you that the NODMAR has been rescinded after requesting the
medical records, you should:
 	Instruct the hospital to submit the medical records (including a copy of the notice
rescinding the NODMAR);
 	Review the medical record and determine whether or not the hospital acted
appropriately in rescinding the notice;
 	Notify the beneficiary that the NODMAR was rescinded if you agree with the
hospital’s action and that he/she should have received a written notification from
the hospital; and

 	Issue your written initial determination (including a determination of the
beneficiary’s liability for payment under §1869 of the Act) if you disagree with
the hospital’s rescinded NODMAR.
Because you do not monitor the issuance of the NODMAR, you are to refer to the Project
Officer any single case where a NODMAR has been rescinded.
7100 - Authority - (Rev. 4, 07-18-03)
Deny claims in accordance with 42 CFR 476.83 when you determine that health care
services furnished or proposed to be furnished to a beneficiary are non-covered because
they are not medically necessary and reasonable (§1862(a)(1) of the Act) or constitute
custodial care (§1862(a)(9) of the Act). In addition, QIOs may deny Part A claims when
a hospital circumvents the Prospective Payment System (PPS) through unnecessary
admissions or readmissions in accordance with §1886(f)(2) of the Act (Deny claims only
as specified in §4255). If, as a result of DRG validation, you determine that the diagnosis
and/or procedures billed by the hospital should be changed and the DRG is affected,
change the DRG assignment in accordance with 42 CFR Part 476. Provide written
notification of initial denial determinations and DRG assignment changes to all affected
parties as specified in 42 CFR 476.94.
7101 - Types of Denial Determinations - (Rev. 4, 07-18-03)
Initial and technical denials apply to services/items furnished in acute/specialty hospitals
(including swing beds) and hospital outpatient/ambulatory surgical centers, hereafter
referred to as providers.
A. Initial Denials
Initial denial determinations are subject to reconsideration and further appeals. These
types of denials include:
 	Preadmissions;
 	Admission;
 	Continued-stay;
 	Circumvention of PPS;
 	Services/procedures; and
 	Cost outliers (and day outliers, if applicable).
NOTE: Render an initial denial determination only after you have afforded the
provider/practitioner an opportunity for discussion.

B. Technical Denials
Technical denial determinations are not subject to reconsideration and further appeals,
but may be subject to re-review/reopening (See §7102.B). These types of denials
include:
 	Medical record not submitted timely (42 CFR 476.90(b)); and
 	Billing errors (including cost outlier denials due to duplicative billing for services
or for services not actually furnished or not ordered by the physician).
NOTE: Opportunity for discussion does not apply to technical denials.
C. DRG Assignment Changes
The DRG assignment changes may result from your correction of technical coding errors
or your correction of diagnostic, procedure, or discharge status information and the
related codes. Changes to the DRG coding information are not subject to reconsideration
and further appeals. These changes are, however, subject to re-review/reopening when
they result in a revised DRG assignment and lower payment (See 42 CFR 478.15 and
478.48).
NOTE: Render DRG assignment changes only after you have afforded the
provider/practitioner an opportunity for discussion.
7102 - Denial and Reopening Timeframes - (Rev. 4, 07-18-03)
A. Initial Denial Determinations and DRG Assignment Changes
Render an initial denial determination or DRG assignment change within one year of the
payment date of the claim containing the service(s) in question (see 42 CFR
476.96(a)(1)).
If the RO approves the action in writing, you may render an initial denial determination
or DRG assignment change after one year but within four years of the payment date of
the claim containing the service(s) in question (See 42 CFR 476.96(b)(1)).
NOTE: These timeframes also apply to technical denial determinations.
Issue notices to all appropriate parties as specified in §§7105-7115. Process
reconsideration requests as specified in §§7400-7440.
B. Reopening of Initial Denial Determinations and DRG Assignment Changes

Conduct reopening as specified below. Issue notices to all appropriate parties if the
reopening results in a change in your initial denial determination or a change in DRG
assignment (See §§7105-7115).
 	Reopening Within One Year -- You may reopen an initial denial determination or
DRG assignment change within one year of the date of your decision (See 42
CFR 476.96(a)(2)).
NOTE: You may reopen a technical denial determination within one year of the date of
your decision when you deny the claim for lack of medical record information and the
information is subsequently provided (Do not reopen any other types of technical denial
determinations).
 	Reopening After One Year But Within Four Years -- You may reopen an initial
denial determination or DRG assignment change after one year but within 4 years
of the date of your decision if (See 42 CFR 476.96(b)(2)):
• 	You receive additional information on the patient's condition that affects
the basis of the prior decision;
NOTE: The additional information is generally part of the medical record for the stay in
question. There may be exceptions such as additional information related to other
hospital stays, physician notes, etc. Addendum orders (i.e., where the physician did not
order a service/procedure and retroactively writes such an order) are not considered
"additional information."
• 	Reviewer error occurred in interpretation or application of Medicare
coverage policy or review guidelines;
• 	There is an error apparent on the face of the evidence upon which the
initial denial or DRG assignment change was based; or
• 	There is a clerical error in the statement of the initial denial determination
or DRG assignment change.
NOTE: You may reopen a technical denial determination after one year but within four
years of the date of your decision when you deny the claim for lack of medical record
information and the information is subsequently provided (Do not reopen any other types
of technical denial determinations).
7105 - Notification of Denial - (Rev. 4, 07-18-03)
Provide written notification of initial denials, technical denials, and DRG assignment
changes to all affected parties, as appropriate (See Exhibits 7-22 through 7-34).
A. Parties to be Notified - Provide Written Notice to:

 	The beneficiary or his/her representative. Do not notify the beneficiary or his/her
representative of DRG assignment changes or denials based on circumvention of
PPS or billing errors;
 	The attending physician or other attending health care practitioner. Do not notify
the individual of circumvention of PPS denials. You are only required to notify
the individual of changes to DRG coding information when the changes revise the
DRG assignment;
 	The provider (if known, include in preadmission/pre-procedure cases). You and
the provider are to specify in your memorandum of agreement who will receive
your notices for the provider. You are only required to notify the provider of
changes to DRG coding information when the changes revise the DRG
assignment; and
 	The intermediary/carrier. If you notify the intermediary/carrier electronically of
the denial determination (including limitation of liability determinations, if
applicable), you need not provide a hardcopy of the notice. Notify the
intermediary of DRG assignment changes. Do not notify the intermediary of
coding changes that do not affect the DRG assignment.
B. Issuance of Notice
Issue notices on a case-by-case basis as follows:
 	One notice addressed to the beneficiary or his/her representative with copies to
the provider, attending physician, and intermediary/carrier; or
 	One notice addressed to the provider (when the beneficiary or his/her
representative is not notified) with copies to the attending physician and
intermediary/carrier (Do not send a copy to the attending physician for
circumvention of PPS denials).
If a case is selected for retrospective review and you find that a HINN was issued, do not
issue a denial notice if you agree with the provider's decision and the beneficiary was not
liable for charges (Issue a notice for all HINN cases reviewed at the beneficiary's or
provider's request).
C. Determination of Beneficiary Address
Ensure that denial notices mailed to beneficiaries who are no longer in the facility are
sent to the correct address. To assist you in determining the beneficiary's correct address,
CMS can provide you with copies of the Carrier Alphabetic State File (CASF) on
microfilm or the Beneficiary Eligibility Status Tapes (BEST) on magnetic tape. Use of
these files is optional. To obtain copies on an ongoing basis, send a written request to
your RO project officer. There is no charge to you for these files.

7110 - Timing of Denial Notice - (Rev. 4, 07-18-03)
Notify all affected parties within the mandatory timeframes for review completion (See
42 CFR 466.94) as follows (These timeframes do not apply to denials involving HINNs):
 	For preadmission denials, issue the notice before admission to the facility. If the
patient is admitted before your medical review is completed, issue the notice by
the first working day after the denial determination. At a minimum, maintain a
detailed log that clearly indicates when denial notices are issued and to whom
(complete patient identification).
 	For pre-procedure denials, regardless of whether the patient has been admitted,
issue the notice before the procedure is performed.
 	For continued-stay denials, issue the notice by the first working day after the
denial determination if the beneficiary is still in the facility.
Deliver the notice to beneficiaries in the facility or mail the notice to those no longer in
the facility. In addition, issue all notices simultaneously to all affected parties on a
case-by-case basis as review determinations are made. Do not hold notices pending
completion of a review cycle for notification to a provider, physician, or
intermediary/carrier. Document if the denial notice is subsequently returned as
undeliverable or receipt refused. Include the returned envelope and notice in the case
file.
7115 - Content of Denial Notice
(Rev. 18, Issued: 10-10-14, Effective: Upon Implementation of ICD-10,
Implementation: Upon Implementation of ICD-10)
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).

7300 – Diagnosis Related Groups (DRG) Validation Re-reviews
(Rev. 18, Issued: 10-10-14, Effective: Upon Implementation of ICD-10,
Implementation: Upon Implementation of ICD-10)
You are responsible for conducting DRG validation re-reviews. The authority for
reviewing changes in diagnostic and procedural coding information is found in 42 CFR
478.10(c).
A. Applicability
Although there are no reconsideration or appeal rights available for changes resulting
from DRG validation, the same process used for making a reconsideration determination
is used for DRG re-reviews (See §7430). A provider or practitioner dissatisfied with
your change to the diagnostic or procedural coding information is entitled to a review of
that change if it caused an assignment of a different DRG and resulted in a lower
payment (See 42 CFR 478.15(a)(1)). A beneficiary or his/her representative dissatisfied
with your change of the diagnostic or procedural coding information is also entitled to a
review of that change if it caused an initial denial of a furnished service (See 42 CFR
478.15(a)(2)). Review each case in its entirety.
B. How to Request a Re-review
The party must file a written request within 60 calendar days after the date of receipt of
the notice of change to the diagnostic or procedural coding information. A party may
also file such a request after 60 days for good cause (See §7410.C).
C. Qualifications of a Reviewer
The individual who reviews changes in DRG procedural or diagnostic information must
be a physician who meets the requirements in §7420.A. The individual who reviews
changes in DRG coding must be qualified through training and experience with ICD
coding. The reviewer (physician or non-physician) cannot be the person who made the
initial determination (A Registered Records Administrator or Accredited Records
Technician must have responsibility for the overall DRG validation process).
D. Timing of Re-review
Complete your re-review and send a written notice to all parties within 30 working days
of receipt of the request for a re-review.
E. Notices to Parties
Notify all parties (in writing) of your re-review determination. Be specific in explaining
the reason(s) for the changes (See Exhibit 7-47) (Do not send this notice to the
beneficiary). Notices of re-review must contain the following elements:

• 	A brief statement concerning your duties and functions under the Act, including
your responsibility to perform DRG validation;
• 	A listing of the ICD diagnosis and procedure code(s) and narrative description as
submitted by the provider and as originally changed by you, along with the reason
for the changes;
• 	A brief statement explaining that the provider and practitioner were given an
opportunity to provide additional information;
• 	The rationale used in upholding or reversing the initial DRG determination,
including the code(s) you finally determined to be correct upon re-review;
• 	A statement that the re-review determination is final (i.e., no further appeals
apply); and
• 	The signature, including title, of the medical director or designated physician if
the change(s) involve DRG procedural or diagnostic information (i.e., medical
judgment). If the change(s) involve(s) DRG coding errors, the re-review notice
may be signed by the medical director, designated physician, Chief Executive
Officer, Accredited Record Technician, or Registered Record Administrator (See
§7115.C.15).
7310 - Re-review of Quality Concerns - (Rev. 4, 07-18-03)
A. Applicability
Although no reconsideration rights are available for final quality concern determinations,
a physician or provider dissatisfied with your confirmed quality concern determination is
entitled to a review of that determination. The physician or provider does not need to
submit new information to be entitled to a re-review. This is an administrative appeal not
required by statute or regulation. No additional review or appeal beyond this re-review is
available for a confirmed quality concern determination.
B. Request for a Re-review
The physician or provider must file a written request for a re-review within 30 calendar
days after the date of the receipt of a notice of a confirmed quality concern determination
(Assume the date of receipt to be within 5 days of the date of the confirmed quality
concern notice if absent proof to the contrary). In the case of late filing, determine
whether the physician or provider has good cause for not requesting a re-review timely
(see §7420.C).
 	Maintain a system for documenting your receipt of re-review requests. The
receipt date, unless otherwise proven, is the date recorded in your documentation
system.

C. Qualifications of Physician Reviewers Who Render Quality Re-review
Determinations
Physician reviewers conducting re-reviews must meet the requirements for physician
reviewers. Use a physician reviewer who was not involved in the determination of the
confirmed quality concern to perform the re-review.
D. Duties of Physician Reviewers Who Render Quality Re-review Determinations
Duties of physician reviewers include:
 	Re-reviewing the original final determination about the quality concern, utilizing
the medical record, the PRAF 1, the PRAF 2, and any additional information
furnished by the physician or provider;
 	Making a final determination regarding the quality concern(s) and the source(s) of
the quality concern(s); and
 	Completing the PRAF for re-review (PRAF 3).
E. Timing of Re-review
Complete your review and send a written notice within 30 calendar days after you receive
the request for a re-review.
F. Notices to Parties
Issue a notice of a re-review determination for every case where a re-review is requested.
Send the re-review notice to the provider and to the physician(s) affected by your re-
review determination.
G. Update of Data System
(e.g., for pattern analysis, internal quality control) when notices of re-review
determinations are sent out.
7400 - Statutory and Regulatory Requirements - (Rev. 4, 07-18-03)
Sections 1862 and 1155 of the Social Security Act (the Act) and 42 CFR Part 478 set
forth the appeals requirements applicable to your Part A and Part B initial denial
determinations by providing that a beneficiary, practitioner, or provider dissatisfied with
your initial denial determination involving medical necessity, reasonableness of services,
or appropriateness of setting is entitled to a reconsideration. A provider dissatisfied with
your initial denial determination involving circumvention of PPS (§1886(f)(2) of the Act)
is also entitled to a reconsideration.

Section 1879 of the Act (Limitation on Liability) and 42 CFR Part 405 Subpart G provide
that the beneficiary who has been found liable may obtain a reconsideration and appeal of
a Part A QIO determination. §1879(a) of the Act and 42 CFR Part 405 Subpart H
provide that the beneficiary who has been found liable may obtain a reconsideration and
appeal of a Part B QIO determination. If the provider or practitioner has been found
liable and the beneficiary has been found not liable, or if the beneficiary has been found
liable and does not pursue a reconsideration on the issue of knowledge, the provider or
practitioner may obtain a reconsideration on the issue that they did not know and could
not be expected to have known the services denied were not covered under Medicare Part
A and/or B. The criteria for determining beneficiary and provider/practitioner knowledge
are found in 42 CFR 411.404 and 411.406.
7410 - Requests for Reconsideration - (Rev. 4, 07-18-03)
A. Right to Request Reconsideration
A beneficiary, provider, or practitioner (including a practitioner who does not accept
assignment) may request a reconsideration regardless of whether there is a dollar amount
in controversy (e.g., a party may request a reconsideration when a case is paid under the
limitation on liability provision) (See 42 CFR 478.16).
NOTE: The term "party" is used throughout this chapter to mean a person (or group)
involved in a legal proceeding, usually the beneficiary, provider, and practitioner.
A beneficiary, provider, or practitioner dissatisfied with your denial determination may
obtain a reconsideration of the following issues:
 	Reasonableness, medical necessity (including the need for using assistants at
cataract surgery), and appropriateness of the services furnished or proposed to be
furnished (e.g., whether treatment was appropriate for the condition) (See
§1862(a)(1) or (9) and §1154(a)(1)(A) of the Act);
 	Appropriateness of the setting in which the services were, or are proposed, to be
furnished (See §1154(a)(1)(c) of the Act); and
 	Whether financially liable under §1879 of the Act (Limitation on Liability):
• 	If the beneficiary (or the provider or practitioner) has been found liable by
you, the beneficiary may obtain a reconsideration of the liability
determination;
• 	If the provider or practitioner has been found liable, or the beneficiary has
been found liable but does not pursue a reconsideration on the issue of
knowledge, the provider or practitioner may obtain a reconsideration of
the liability determination; and

• 	If the practitioner has been found liable and the beneficiary has been found
not liable, or the beneficiary has been found liable but does not pursue a
reconsideration on the issue of knowledge, the practitioner may ask for a
reconsideration on the issue that neither the beneficiary nor the
practitioner knew and could not have known that the services denied were
not covered under Medicare Part B.
NOTE: When a reconsideration is conducted, make a determination on the issue of
knowledge. Providers/practitioners can only appeal the limitation on liability
determination, not the medical necessity determination, beyond the reconsideration.
A provider dissatisfied with your denial determination may obtain a reconsideration of a
Part A denial for circumvention of PPS as specified in §7440.
B. Timeframes To Request Reconsiderations
 	Reconsiderations of Retrospective Initial Denials -- A beneficiary who is
dissatisfied with your initial denial determination may request a reconsideration
by writing to you, a SSA District Office, or a Railroad Retirement Board Office
(if the party is a railroad retirement beneficiary). A provider or practitioner may
request a reconsideration by writing to you. Reconsider an initial denial
determination if the beneficiary, provider, or practitioner files a timely written
request:
• 	Within 60 calendar days after receipt of the initial denial notice (except for
a request for expedited reconsideration under 42 CFR 478.18(c)). Receipt
of the notice is assumed to be within 5 days of the date of the initial notice
if absent proof to the contrary (See 42 CFR 478); or
• 	After 60 days, for good cause (See §7410.C).
 	Expedited Reconsiderations of Preadmission/Pre-procedure (Including Assistant
at Cataract Surgery) Initial Denials -- A beneficiary, provider, or practitioner who
is dissatisfied with your initial denial determination may request an expedited
reconsideration by writing or telephoning you. Reconsider an initial denial
determination if the beneficiary, provider, or practitioner files a timely written or
telephone-expedited request within 3 calendar days after the date of receipt of the
notice of a preadmission/pre-procedure (including an assistant at cataract surgery)
denial. If an expedited reconsideration is not filed timely, a non-expedited
reconsideration may still be requested (See §7410.B.1).
 	Expedited Reconsiderations of Concurrent Initial Denials -- A beneficiary,
provider, or practitioner who is dissatisfied with your initial denial determination
may request an expedited reconsideration through the hospital or by writing or
telephoning you. Reconsider an initial denial determination if the beneficiary,

provider, or practitioner files a timely expedited request at any time while the
beneficiary remains in the hospital. If an expedited reconsideration is not filed
timely, a non-expedited reconsideration may still be requested (See §7410.B.1).
C. Good Cause for Late Filing of a Request for a Reconsideration
In determining whether a party has shown that it had good cause for not filing a timely
request for reconsideration, consider, but do not limit your consideration to:
 	The circumstances that kept a party from making the request on time;
 	Whether your action(s) misled a party; and
 	Whether a party did not understand the requirements for filing a timely request.
Examples of circumstances for which you may find good cause include:
 	A party was seriously ill and was prevented from requesting a reconsideration;
 	There was a death or serious illness in a party's immediate family;
 	Important records were accidentally destroyed or damaged;
 	A party made a diligent effort, but could not find or obtain the necessary relevant
information to support approval of the medical services before the deadline for
requesting reconsideration;
 	A party requested within the applicable time limit additional information from
you explaining the action, and requested reconsideration within 60 calendar days
of receiving that information;
 	The party was given incorrect or incomplete information by you about when and
how to request a reconsideration;
 	A party sent the request within the time limit in good faith to another Government
agency, but the request did not reach the authorized office until after the time
period had expired; or
 	Other unusual or unavoidable circumstances that show that a party could not have
known of the need to file timely or that prevented the party from filing timely.
7420 - QIO Reconsiderations - (Rev. 4, 07-18-03)
A. Qualifications of a QIO Reconsideration Reviewer

A QIO reconsideration reviewer must meet the qualifications required of a QIO physician
who makes an initial denial determination (See 42 CFR 478.28 and 42 CFR 476.98 for
the eligibility requirements for and responsibilities of physician reviewers, including the
obligation to consult with peers).
The physician reviewer must also be a board-certified or board-eligible specialist in the
same specialty as the physician whose services are being reviewed, and must be
practicing in a setting similar to that of the physician whose services are under review,
except:
 	If use of a like specialist in a similar setting is impractical for a particular case,
use, if possible, a like specialist who practices in another setting.
 	If it is impractical for you to meet the conditions listed above, use a board-
certified specialist (or board candidate) in the specialty that matches the services
under review and who practices in a setting similar to that of the physician whose
services are under review. If this is impractical, use a physician reviewer whose
practice includes the services under review and whose practice is located in a
setting similar to that of the physician whose services are under review. When
this is not possible, document the reason(s) in the case file. Also, document the
physician reviewer's qualifications in the case file (See §7430.F).
The physician reviewer must not:
 	Be the reviewer who made the initial denial determination;
 	Have participated in developing or executing the beneficiary's treatment plan;
 	Be in practice with any physician involved in the care of the beneficiary;
 	Be a member of the beneficiary's family;
 	Be a governing body member, officer, partner, 5 percent or more owner, or
managing employee in the health care facility where the services were or are to be
furnished; or
 	Be a member of a reviewer's family, a spouse (other than one who is legally
separated under a decree of divorce or separate maintenance), a child (including a
legally adopted child), grandchild, parent, grandparent, or sibling.
NOTE: A beneficiary's attending physician may not request a specific reviewer to
conduct the reconsideration.
B. Finality of a Reconsidered Determination
Your reconsidered determination is final and binding upon all parties unless:

 	Reopened and revised by you, either on your own motion or at the request of any
party within l year from the date of the reconsidered determination;
 	Reopened and revised by you after l year, but within 4 years, because:
• 	You receive new and material evidence;
• 	There is a clerical error in the statement of your reconsidered
determination;
• 	You erred in interpretation or application of Medicare coverage policy; or
• 	There is an error apparent on the face of the evidence upon which your
reconsidered determination was based.
 	Reopened and revised by you at any time if the reconsidered determination was
obtained through fraud or an abusive practice (e.g., describing services in such a
way that a wrong conclusion is reached); or
 	Reversed after appeals filed in accordance with §7440. The Administrative Law
Judge (ALJ) or the Appeals Council, whichever made the final decision, may
reopen and revise its decision in accordance with the procedures set forth in 42
CFR 405.750(b)(1) and (2) which covers reopening and re-reviews under subpart
G of Part 405.
A reconsidered determination, a review of a DRG change, or a decision of an ALJ or the
Appeals Council may be reopened and reviewed at any time if the reconsideration
determination, review, or decision was obtained through fraud or a similar abusive
practice that does not support a formal finding of fraud.
7430 - Reconsideration Process - (Rev. 4, 07-18-03)
A. Provision of Information to Parties
Prior to the reconsideration, give all parties, upon request, an opportunity to examine or
obtain a copy of all the material upon which the initial denial determination was based,
including the complete medical record and summary of your findings and conclusions in
making the initial denial determination. Inform the requester that he may have to pay a
reasonable fee for the redaction of, reproduction of, and postage for, the material
requested (If patient information would be harmful to the beneficiary, provide it to the
beneficiary's designated representative upon receiving the request in writing pursuant to
42 CFR 480.132(c)).
In accordance with regulations governing disclosure of confidential QIO information and
regulations at 42 CFR 478.24(a), do not give a party access to:

 	Your deliberations; and
 	The identity of your review coordinators, physician advisors, or consultants that
assisted in reviewing the case (unless they have consented to release of their
names).
Establish and implement procedures to segregate your deliberations and identifiers from
the medical records when redacting.
No document or other information produced by you in connection with your deliberations
in making reconsiderations under Title XI of the Act shall be subject to subpoena or
discovery in any administrative or civil proceeding, except that you shall provide, upon
request of a practitioner or other person adversely affected by such a determination, a
summary of the organization's findings and conclusions in making the determination (See
§1160(d) of the Act).
B. Provision For Submittal of Additional Information from Parties
Give all parties the opportunity to present additional documentary materials (e.g., new
evidence) for consideration.
C. The Reconsideration Proceedings
Conduct the reconsideration proceedings as spelled out in your contract with CMS.
Conduct a medical records review at your office with no party being present, or conduct
proceedings similar to an evidentiary hearing. In either case, give the party advance
notice of the date of the reconsideration to allow sufficient time for submission of
evidence. Reschedule a reconsideration if a party submits a written request presenting
reasonable justification for rescheduling.
If your contract calls for an evidentiary hearing:
 	Give any party the opportunity to ask reasonable questions (e.g., to clarify
information presented) of you or of any person who gives testimony; and
 	Do not deny any involved party access to the hearing either while you present
information or while another party (or a witness) presents information.
You are not required to have your legal counsel attend even if legal counsel for a party
attends. In addition, you are not required to make a transcript of the reconsideration
proceedings. A summary of the proceedings is adequate.
D. Evidence at Reconsideration

Consider all information in the medical record, the basis for the initial determination, and
any additional evidence submitted by a party.
E. Areas of Consideration
Make a determination on medical necessity, reasonableness and appropriateness of
setting, and whether the beneficiary/physician/provider knew or should have known that
the care in question was not covered.
F. Timing of the Reconsidered Determination
Complete your reconsidered determination and send written notice within the timeframes
that follow:
 	For preadmission or pre-procedure or assistant at cataract surgery reviews, within
3 working days after you receive the reconsideration request. Apply this
timeframe if the initial denial determination was made before the beneficiary was
admitted to the institution or before surgery was performed and a timely expedited
reconsideration request was made (see §7410.B.2).
 	When the beneficiary is a hospital inpatient, within 3 working days after you
receive the reconsideration request. Apply this timeframe if the initial denial
determination was made while the beneficiary was still in the hospital and a
timely expedited reconsideration request was made (See §7410.B.3).
 	When the beneficiary is an inpatient in a SNF or receiving home health agency
(HHA) services, within 10 working days after you receive the reconsideration
request. Apply this timeframe if the beneficiary is still an inpatient in a SNF for
the stay in question or is receiving home health services for the stay in question
when you receive the request.
 	When the beneficiary is receiving non-institutional services, is no longer an
inpatient, or does not file a timely expedited request, within 30 working days after
you receive the reconsideration request. Apply this timeframe if the initial denial
determination concerns ambulatory or non-institutional services (except pre-
procedure reviews), the beneficiary is no longer an inpatient in a hospital or SNF
and is not receiving home health services for the stay in question, or the party
does not file a timely request for expedited reconsideration (see §§7410.B.1 and
2).
Maintain a system, such as a log, for documenting your receipt of the request for
reconsideration. Receipt, unless otherwise proven, means the day that you have in your
records documentation that a notice was received. A party may request additional
information to further explain the determination within 30 working days, and may request
a reconsideration within 60 days of receiving the explanation (or within 30 days for an
Appeals Council hearing).

G. Notices of a Reconsideration Determination
Notices to Parties -- Notify all parties in writing of your reconsidered determination.
Discuss in detail the reasons for the initial and reconsidered determinations. Ensure that
the appellant understands the reason(s) for your determination and provide support for
your determination should the case be heard by an ALJ.
NOTE: Do not send beneficiaries or physicians reconsideration notices for
circumvention of PPS (See §7440 for further instructions for processing circumvention of
PPS reconsiderations).
All reconsideration notices must contain the following elements unless otherwise
specified (see Exhibits 7-40 through 7-50):
 	A brief statement concerning your duties and functions under the Act (Cite the
regulatory basis for your review authority);
 	The date that the reconsideration was requested and the party who requested it;
 	The date of the admission or procedure, the name of the provider, and the reason
for the admission or the name of the procedure furnished;
 	A detailed explanation of the reason for the initial denial determination. A
statement that the care was not medically necessary is not an adequate explanation
(see §7115.C.5);
 	The qualifications of the physician(s) who reviewed the case at the
reconsideration level in a manner consistent with your disclosure requirements;
 	A brief statement explaining that the provider and practitioner were given an
opportunity to provide additional information;
 	A clear explanation of the reasons for the reconsidered determination, including a
narrative description of the medical facts and a detailed rationale for the
determination. Provide the appropriate statutory and regulatory citations. Include
an evaluation of any new points raised as part of the reconsideration request. If
no new points are raised, state this in your notice;
 	A statement about each party's liability for payment. State the initial liability
determination for each party, including the rationale for each liability
determination. State the reconsidered determination for each party. Provide a
clear discussion of the Medicare payment consequences of the reconsidered
determination for the beneficiary, provider, and/or physician, including the
rationale for the liability determination;

 	Fully document your determination that the beneficiary/provider/practitioner
knew or should have known that the care in question was not covered. The
following are examples of rationales that would support your liability
determination (see 42 CFR 411.406, §§7115.C.6 and 7):
• 	The beneficiary received written notice from you, the fiscal intermediary
(FI), carrier, utilization review committee, provider, or physician that the
services were not covered or that similar or reasonably comparable
services were not covered. Include a copy of the written notice in the
reconsideration notice; and
• 	The provider and/or physician had prior knowledge that the services
furnished were not covered or that similar or reasonably comparable
services were not covered based on experience, actual notice, or
constructive notice. This knowledge is based upon the provider's receipt
of CMS/QIO/FI/carrier notices (such as manual issuances, bulletins, or
other written guides or directives), medical review screening criteria
specific to the condition of the beneficiary for whom the furnished
services are at issue, or the provider's knowledge of what are considered
acceptable standards of practice by the local medical community. Provide
specific references and dates in the provider's and physician's rationale
(e.g., Bulletin #200, issued September 30, 1990).
 	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 7-50);
 	A statement regarding the indemnification of the beneficiary for provider and/or
physician services when the beneficiary has been found not liable (see §§7115C.8
and 9) (Include only if the initial denial is upheld or partially reversed. Do not
include in circumvention of PPS denials);
 	If the beneficiary, provider, and/or physician has been found not liable, specify
that the beneficiary is responsible only for payment of any deductible,
coinsurance, and convenience services and items normally not covered by
Medicare for the denied period;
 	If the provider and/or physician has been found liable and the beneficiary has
been found not liable, specify that the beneficiary is responsible only for payment
of any convenience services and items normally not covered by Medicare for the
denied period;
 	Include the name, address, and telephone number of the FI and/or carrier where
the beneficiary can file a request for indemnification;

 	Inform the beneficiary that if a request for indemnification is filed, a copy of the
denial notice, a copy of the bill for services, and a copy of the payment receipt
from the provider or any other evidence showing that the beneficiary paid the
provider must be provided to the FI or carrier;
 	A statement regarding future liability (See §7115.C.10) (Include only if the initial
denial is upheld or partially reversed. Do not include in circumvention of PPS
denials);
 	A complete discussion about further appeal rights of all parties (i.e., right to
request a hearing before an ALJ) (Include only if the initial denial is upheld or
partially reversed);
 	Make it clear that beneficiaries may appeal the reasonableness, medical necessity,
or appropriateness of services furnished or proposed to be furnished, the
appropriateness of the setting in which the services were or are proposed to be
furnished, or whether they are liable for payment under §1879 of the Act
(Limitation on Liability). The provider and physician may only request a hearing
on the issue of knowledge under §1879. Providers may request a hearing on the
issue of circumvention of PPS (see §7410.A);
 	State the minimum amount that must be in controversy to appeal your
reconsideration determination (see §7500);
 	State that a written request for appeals (ALJ hearings) must be filed within 60
calendar days after receipt of a reconsideration determination;
 	State that the request should include: the beneficiary's name, Medicare health
insurance claim number, where and when the services were received, the reason
for dissatisfaction with your determination, any additional evidence the
beneficiary, provider or physician wishes to submit, and a copy of the
reconsideration notice;
 	State that a beneficiary may send an ALJ hearing request to you, any SSA District
Office, any Office of Hearings and Appeals (OHA), or a Railroad Retirement
Board Office (if eligible) and that a provider or practitioner may send an ALJ
hearing request to you or OHA (Do not include in circumvention of PPS denials);
 	A statement regarding the beneficiary's or his/her representative's right to legal
representation (Include only if the initial denial is upheld or partially reversed.
Do not include in circumvention of PPS denials). Use the following language
without alteration:
• 	"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."
 	A statement regarding the beneficiary's or his/her representative's right to examine
or receive a copy of the complete medical/clinical record (Include only if the
initial denial is upheld or partially reversed. Do not include in circumvention of
PPS denials). Use the following language without alteration:
• 	"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."
 	The signature of the medical director or designated physician (see §7115.C.15).
Notice to Payers -- Provide prompt written or electronic notification to the appropriate
Medicare FI or carrier of a reconsidered determination when the initial denial and/or
liability determination is partially or totally reversed. Include the name of the
beneficiary, the health insurance claim number, the name of the provider and physician,
date of admission, and dates of services, if any, for which Medicare payment will not be
made.
H. Record of the Reconsideration
Maintain the record (i.e., file) of your reconsideration until the later of 4 years after the
date on the notice of your determination or completion of litigation and the passage of the
time period for filing all appeals.
The record (file) must include:
 	The initial denial determination and its basis (i.e., all documents associated with
the determination);
 	A copy of the initial denial notice;
 	Documentation of the date of the receipt of the parties' request for
reconsideration;

 	Evidence submitted by the parties in support of the reconsideration request;
 	The basis for the reconsidered determination;
 	A copy of the reconsideration notice; and
 	Documentation of when the initial denial and reconsideration notices were
given/mailed out to the parties (This may be written in a separately kept log).
7440 - Circumvention of Prospective Payment System (PPS) –
(Rev. 4, 07-18-03)
Circumvention of Prospective Payment System (PPS) is a hospital action that results in
the unnecessary admission or multiple admissions of an individual entitled to benefits
under Medicare Part A. §1886(f)(2) of the Act provides that the Secretary determines,
although based upon information supplied by the QIO, the prohibited actions have taken
place, and the Secretary denies payment. Therefore, the provisions of §1869 of the Act
and 42 CFR 405, which deal with appeals from non-QIO payment denials, are applicable
and provide for ALJ, Appeals Council, and judicial review.
Under the Medicare program, circumvention of PPS denials are considered to be initial
denial determinations that give further reconsideration and appeal rights to hospitals.
Therefore, a hospital dissatisfied with your initial denial determination for circumvention
of PPS may request a reconsideration regardless of the amount in controversy (See 42
CFR 405.710(b)). Do not notify the beneficiary or physician of your reconsideration
determination (See §7430.G.1 for reconsideration notice requirements) (See Exhibit 7-
50).
Section 1886(f)(2) of the Act is directed only to hospitals that are reimbursed under PPS.
Because physicians are not paid for services under PPS, a physician does not have an
independent right to appeal an adverse determination under this section. The appeal right
belongs to the hospital. The hospital may appoint the physician to act as its
representative for an appeal or may call a physician as a witness if the appeal goes to a
hearing before an ALJ. Although the physician(s) who provided the services during the
denied Part A stay do not receive a copy of your denial notice, they do receive notice
when the associated Part B payments are denied. Then he/she may separately appeal the
denial of Part B services related to the Part A denial if he or she has accepted assignment
of the claim from the beneficiary.
Limitation on liability under §1879 of the Act does not apply to Part A denials for
circumvention of PPS. If, however, the Part B services associated with the Part A denial
are also denied, limitation on liability may apply.
A. Listing of Documentation Required for Hearing

Obtain the following documentation before you forward the file to OHA. If any of the
evidence deemed necessary is not in existence, or is otherwise unobtainable, fully
document this and explain.
 	Medical Records -- The medical record must contain information to justify
admission and continued hospitalization, support the diagnosis, and describe the
patient's progress and response to medication and services (See 42 CFR
482.24(c)). If possible, send a copy of the entire medical record. Generally, the
medical record contains the following documents:
• 	Consent to treatment statement;
• 	Consultations, if any;
• 	Demographics sheet (e.g., face sheet);
• 	Discharge summary;
• 	Discharge/transfer instructions;
• 	Emergency department records, if any;
• 	Graphic sheets;
• 	History and physical;
• 	Intake/output sheets;
• 	IV flow sheets, if any;
• 	Laboratory results (e.g., blood work, urine tests);
• 	Medication records;
• 	Nursing assessments;
• 	Operative/procedural consent to treatment statement, if any;
• 	Operative reports, if any;
• 	Physician attestation statement;
• 	Physician's orders;
• 	Problem list, if any;

• 	Progress notes (e.g., physician, nurse, other multi-disciplined
practitioners);
• 	Rehabilitation reports, if any; and
• 	Test results (e.g., X-rays, MRIs, EKGs, CAT scans), if any.
 	QIO Documents -- Include the following documents from your files:
• 	Notice of initial denial determination, including a determination on
limitation on liability (See §7115 for denial notice content);
• 	Request for reconsideration (See §7430.G.1 for reconsideration notice
content);
• 	Request for hearing; and
• 	Reconsideration determination notice including a determination on
limitation on liability. To support your reconsideration determination,
include the following information:
 	The professional qualifications and experience of the physician
reconsideration reviewer. Explain that in accordance with
regulations governing disclosure of confidential QIO information
you may not reveal the identity of the reviewer unless he/she gives
his/her consent (See 42 CFR 480 and §7430); and
 	Rationale supporting the determination with the corresponding
statute/regulation. Provide your rationale in your reconsideration
letter so that it may be taken into consideration by OHA. It is not
sufficient to add an explanation to the hearing file.
To request a hearing, the beneficiary or his/her representative (whose appointment has
been properly documented) may send a letter or submit OHA's Form CMS-5011-U6,
Request for Hearing (see Exhibit 7-62). If a beneficiary submits a letter requesting a
hearing without Form CMS-5011-U6, fill out Form CMS-5011-U6 and attach the
incoming letter and the form to a letter to OHA that includes the following statement:
"See attached letter dated." Staple the letter and the postmarked envelope in which it
arrived to the hearing request form. You are not responsible for completing Form SSA-
1696-U4, Appointment of Representative. Instead, check the appropriate blank under
Item 19A on Form CMS-384, QIO Case Summary, indicating whether a completed
beneficiary representative form is on file.
NOTE: Upon receipt of a request for hearing, it is imperative that you date-stamp the
request. A request is considered filed on the date it is postmarked (see 42 CFR

478.42(b)(3)). Also, retain a copy of the envelope in which the request for hearing was
received in order to have a record of the exact date a request was filed.
 	Other Pertinent Documents -- Include the following pertinent documents in your
file:
• 	Hospital denial notice, preadmission/pre-procedure denial notice and the
physician's response to the pre-denial notice. These documents may be
the only records in the file if the beneficiary was never subsequently
admitted to the hospital or the procedure was never performed following a
preadmission/pre-procedure denial;
• 	Copies of prior denial notices that involve the same or reasonably
comparable conditions. These are especially important for appeals made
under the limitation on liability provision;
• 	Copies of the laws and regulations not otherwise referenced in your
determination on which you relied;
• 	Copies of relevant review criteria with a statement explaining that you
developed the review criteria with the assistance of specialty physicians
from your State and that they are medically recognized indicators of care
that reflect local standards of medical practice. Also, include a copy of
CMS' generic quality screens that have been applied to the case, if
appropriate;
• 	Copies of the actual document/bulletin/Memorandum of Understanding
(MOU) containing the information given to the provider community.
Reference actual documents sent to the hospitals, which may include
relevant pages of the QIO Manual; and
• 	All appropriate billing forms and current benefit data from the claim
history. If billing forms and benefit data are not available in the file,
request that the Fiscal Intermediary (FI) send this information to the
appropriate hearing office (See Exhibits 7-63 and 7-64). Do not hold the
hearing folder if you only need FI data. Forward the folder directly to
OHA.
NOTE: These documents support your determination. ALJs rule based on
preponderance of evidence. The parties to the appeal can bring medical specialists and
lawyers to the hearing to establish evidence on their behalf (Party is legally defined as "a
person or group involved in a legal proceeding"). However, because neither CMS nor the
QIO is a party, ensure that the file forwarded to OHA is as complete as possible.
B. Assembling the Hearing Claim File

Place all hearing requests in folders before you send them to the hearing office. Each
folder must contain the beneficiary's Health Insurance Claim Number (HICN) (i.e.,
Medicare number) on one line followed directly underneath by the surname, first name,
and middle initial (if known). All claims material that pertains to services in question,
including the envelope in which the request for hearing was received, must be profiled in
this folder in chronological order by type of evidence (e.g., nurse's notes, physician's
orders) with the most current material on top.
To provide the ALJ with a concise overview of your determination, add a sheet with the
qualifications and experience of the physician reconsideration reviewer and his/her
rationale supporting the determination with the corresponding statute/regulation.
Include documents to support your limitation on liability determination.
7500 - Background - (Rev. 4, 07-18-03)
The Office of Hearings and Appeals (OHA) of the Social Security Administration (SSA)
conducts hearings. Beneficiaries may appeal any medical necessity or appropriateness of
setting determination made by you to an Administrative Law Judge (ALJ) where there is
at least $200 or more at issue (See 42 CFR 478.40). Beneficiaries also may appeal your
limitation on liability determination (Title XVIII, §1879 of the Act) where $100 or more
is at issue. Providers and practitioners may only appeal to an ALJ your waiver on
liability determination where $100 or more is at issue (if the beneficiary does not request
an ALJ hearing on that same issue). That is, they can only appeal the issue of whether
they knew or should have known that care or services were covered by Medicare.
Providers and practitioners cannot request an appeal about the issue of medical necessity
or appropriateness of setting under Title XI, §1155 of the Act. Providers can appeal your
circumvention of PPS denial determinations under §1886(f)(2) of the Act where $100 or
more is at issue (See §1869(b)(2)(A) of the Act and 42 CFR 405.720(d)). There are no
appeal rights to DRG changes beyond DRG re-review.
NOTE: Once a request for hearing is filed (even if the above rules do not appear to be
met), only OHA can dismiss the case. Therefore, process and forward every request for
hearing to OHA within 30 calendar days from the date of receipt of the request.
7510 - Preparing the Acknowledgment Letter - (Rev. 4, 07-18-03)
Prepare and mail the acknowledgment letter to the party requesting a hearing (See
Exhibit 7-60). This letter informs the party to which hearing office his/her request for
hearing is being mailed. Place a copy in the file.
NOTE: Because the hearing is generally held at the hearing office closest to the
requester's address, you need to know the requester's complete address to locate the
hearing office (See instructions in Exhibit 7-61 on "How to Locate the Correct Hearing
Office").

7520 - Assembling the Hearing Claim File - (Rev. 4, 07-18-03)
Complete documentation is vital. It is the foundation upon which to make and sustain
determinations. Inadequate documentation leads to improper and inconsistent
determinations, delays in the appeals process, and reversals at higher appellate levels.
Therefore, when assembling the case file, make sure you include all pertinent material.
Files furnished for ALJ hearings must provide specific rationale supporting your
determination (Cite applicable sections of the statute and regulations and/or published
precedents). The statute, regulations, CMS rulings, and national coverage determinations
are binding on ALJs. It is important to cite appropriate regulations because these
coincide with the ALJ frame of reference. CMS manual instructions are not binding on
ALJs unless the statute or regulations specifically incorporates them.
National coverage determinations are found in the Coverage Issues Manual.
The CMS Rulings contain precedent case dispositions, statements of policy, and
interpretations of the law and regulations, which you are to follow. CMS Rulings are
binding on all CMS components, the Provider Reimbursement Review Board, and ALJs
who hear Medicare appeals. These decisions promote consistency in interpretation of
policy and adjudication of disputes.
A. Listing of Documentation Required for Hearing
Obtain the following documentation before you forward the file to OHA. If any of the
evidence deemed necessary is not in existence, or is otherwise unobtainable, fully
document this and explain.
 	Medical Records -- The medical record must contain information to justify
admission and continued hospitalization, support the diagnosis, and describe the
patient's progress and response to medication and services (See 42 CFR
482.24(c)). If possible, send a copy of the entire medical record. Generally, the
medical record contains the following documents:
• 	Consent to treatment statement;
• 	Consultations, if any;
• 	Demographics sheet (e.g., face sheet);
• 	Discharge summary;
• 	Discharge/transfer instructions;
• 	Emergency department records, if any;

• 	Graphic sheets;
• 	History and physical;
• 	Intake/output sheets;
• 	IV flow sheets, if any;
• 	Laboratory results (e.g., blood work, urine tests);
• 	Medication records;
• 	Nursing assessments;
• 	Operative/procedural consent to treatment statement, if any;
• 	Operative reports, if any;
• 	Physician attestation statement;
• 	Physician's orders;
• 	Problem list, if any;
• 	Progress notes (e.g., physician, nurse, other multi-disciplined
practitioners);
• 	Rehabilitation reports, if any; and
• 	Test results (e.g., X-rays, MRIs, EKGs, CAT scans), if any.
 	QIO Documents -- Include the following documents from your files:
• 	Notice of initial denial determination, including a determination on
limitation on liability (See §7115 for denial notice content);
• 	Request for reconsideration (See §7430.G.1 for reconsideration notice
content);
• 	Request for hearing; and
• 	Reconsideration determination notice including a determination on
limitation on liability. To support your reconsideration determination,
include the following information:

 	The professional qualifications and experience of the physician
reconsideration reviewer. Explain that in accordance with
regulations governing disclosure of confidential QIO information
you may not reveal the identity of the reviewer unless he/she gives
his/her consent (See 42 CFR 480 and §7430); and
 	Rationale supporting the determination with the corresponding
statute/regulation. Provide your rationale in your reconsideration
letter so that it may be taken into consideration by OHA. It is not
sufficient to add an explanation to the hearing file.
To request a hearing, the beneficiary or his/her representative (whose appointment has
been properly documented) may send a letter or submit OHA's Form CMS-5011-U6,
Request for Hearing (See Exhibit 7-62). If a beneficiary submits a letter requesting a
hearing without Form CMS-5011-U6, fill out Form CMS-5011-U6 and attach the
incoming letter and the form to a letter to OHA that includes the following statement:
"See attached letter dated." Staple the letter and the postmarked envelope in which it
arrived to the hearing request form. You are not responsible for completing Form SSA-
1696-U4, Appointment of Representative. Instead, check the appropriate blank under
Item 19A on Form CMS-384, QIO Case Summary, indicating whether a completed
beneficiary representative form is on file.
NOTE: Upon receipt of a request for hearing, it is imperative that you date-stamp the
request. A request is considered filed on the date it is postmarked (See 42 CFR
8.42(b)(3)). Also, retain a copy of the envelope in which the request for hearing was
received in order to have a record of the exact date a request was filed.
 	Other Pertinent Documents -- Include the following pertinent documents in your
file:
• 	Hospital denial notice, preadmission/pre-procedure denial notice and the
physician's response to the pre-denial notice. These documents may be
the only records in the file if the beneficiary was never subsequently
admitted to the hospital or the procedure was never performed following a
preadmission/pre-procedure denial;
• 	Copies of prior denial notices that involve the same or reasonably
comparable conditions. These are especially important for appeals made
under the limitation on liability provision;
• 	Copies of the laws and regulations not otherwise referenced in your
determination on which you relied;
• 	Copies of relevant review criteria with a statement explaining that you
developed the review criteria with the assistance of specialty physicians
from your State and that they are medically recognized indicators of care

that reflect local standards of medical practice. Also, include a copy of
CMS' generic quality screens that have been applied to the case, if
appropriate;
• 	Copies of the actual document/bulletin/MOU containing the information
given to the provider community. Reference actual documents sent to the
hospitals, which may include relevant pages of the QIO Manual; and
• 	All appropriate billing forms and current benefit data from the claim
history. If billing forms and benefit data are not available in the file,
request that the Fiscal Intermediary (FI) send this information to the
appropriate hearing office (See Exhibits 7-63 and 7-64). Do not hold the
hearing folder if you only need FI data. Forward the folder directly to
OHA.
NOTE: These documents support your determination. ALJs rule based on
preponderance of evidence. The parties to the appeal can bring medical specialists and
lawyers to the hearing to establish evidence on their behalf (Party is legally defined as "a
person or group involved in a legal proceeding"). However, because neither CMS nor the
QIO is a party, ensure that the file forwarded to OHA is as complete as possible.
B. Assembling the Hearing Claim File
Place all hearing requests in folders before you send them to the hearing office. Each
folder must contain the beneficiary's Health Insurance Claim Number (HICN) (i.e.,
Medicare number) on one line followed directly underneath by the surname, first name,
and middle initial (if known). All claims material that pertains to services in question,
including the envelope in which the request for hearing was received, must be profiled in
this folder in chronological order by type of evidence (e.g., nurse's notes, physician's
orders) with the most current material on top.
To provide the ALJ with a concise overview of your determination, add a sheet with
qualifications and experience of the physician reconsideration reviewer and his/her
rationale supporting the determination with the corresponding statute/regulation.
Include documents to support your limitation on liability determination.
7530 - Pre-hearing Case Review - (Rev. 4, 07-18-03)
Do not perform pre-hearing case reviews. Once the party has requested an ALJ hearing,
the ALJ has jurisdiction. Immediately assemble and transmit the file to the ALJ.
A. Examining the Hearing Claim File
Examine each file before sending it to the hearing office to ensure that it contains all the
pertinent documents.

B. Completing the QIO Case Summary Form (CMS-384)
Complete the QIO Case Summary Form (See Exhibit 7-65) on all cases you forward to
OHA. This form reflects the pertinent facts concerning the beneficiary, the history of the
claim, and the evidence in file. Include a copy of this form in the hearing folder. Retain
a copy for your records.
C. Completing the Transmittal Notice - Hearing Case Form (CMS-636)
Complete the Transmittal Notice - Hearing Case Form (See Exhibit 7-66), checking the
appropriate block(s). Place the original CMS-636 in the hearing folder on top of the
Request for Hearing Form (CMS-5011-U6). Retain a copy for your records.
7540 - Routing the Hearing Claim File to Office of Hearings & Appeals
(OHA) - (Rev. 4, 07-18-03)
Follow instructions found in Exhibit 7-61 on "How to Locate the Correct Hearing
Office." Prior to forwarding the claim file to the hearing office, attach the CMS-3509,
Health Insurance Appeal Case Form, to the front of the folder (See Exhibit 7-67). This
form provides the routing instructions for the hearing office after it completes its action
on the request. It is important to place this form on all folders sent to OHA and to check
the correct return address block.
NOTE: This form is printed on yellow heavy stock paper. Do not photocopy the form.
7550 - Reporting Requirements - (Rev. 4, 07-18-03)
Collect and report data on all requests you receive and process for hearings in accordance
with QIO reporting requirements.
7560 - Hearings by an Administrative Law Judge - (Rev. 4, 07-18-03)
A. Beneficiary Representatives at Hearings
A Medicare beneficiary may appoint any person to represent him/her who meets the
requirements of regulations in 20 CFR 404.1705(b), including a provider/practitioner
who furnished the services at issue in the appeal.
The representative must:
 	Be generally known to have a good character and reputation;
 	Be capable of giving valuable help to the beneficiary in connection with the
claim;

 	Not be disqualified or suspended from acting as a representative in dealings with
OHA; and
 	Not be prohibited by any law from acting as a representative.
The beneficiary appoints a provider/practitioner by signing an "Appointment of
Representative" form (CMS-1696-U4) (See Exhibit 7-68).
B. Your Participation in the Hearing Process
Neither you nor CMS have the right to appear or participate in the hearing process
because you are not designated as parties in the Social Security Act (See 20 CFR
404.932). However, in order to conduct full and fair hearings, ALJs may call your staff
to appear as witnesses and to explain your procedures and determinations.
C. Disclosure of Information for Administrative Hearings
When a Medicare beneficiary, physician, or provider, who is filing for a hearing by an
ALJ, requests you to provide information on your reconsideration determination, disclose
the information in accordance with the limitations specified in the regulations at 42 CFR
480.139(b)(2). These regulations require you to disclose detailed facts, findings, and
conclusions. Your deliberations, however, are not disclosable, either in written form or
through oral testimony. Before disclosing information remove any identification of
practitioners, reviewers, or other patients unless each individual gives consent to the
disclosure.
D. Retention of Appeals Files After ALJ Hearings
Fiscal intermediaries maintain appeal files when the appeal is completed. Maintain your
copy of the record (i.e., file) of the appeal until the later of:
 	Four years after the date on the notice of your reconsideration determination; or
 	Completion of litigation and the passage of the time period for filing all appeals
(see §7430.H).
NOTE: ALJ decisions are sent to the CMS respective Regional Office (RO).
7570 - Appeals Council (AC) Review - (Rev. 4, 07-18-03)
If the appellant is dissatisfied with an ALJ's decision, the party may request the Appeals
Council (AC) to review the decision. The AC may, on its own motion, review an ALJ
decision. The circumstances under which the AC will review an ALJ's hearing decision
or dismissal are specified in 42 CFR 404.967. You are not considered a party. However,
if you believe that an ALJ decision is in conflict with a statute/regulation, contact the RO
by telephone and explain why you believe the decision is in error. If the RO agrees that

the case should be referred to the AC, provide the RO with documentation, as quickly as
possible (e.g., fax), that should be included in its protest to the AC. Work with the
intermediaries in your State to ensure the immediate forwarding of the appropriate case
files to the RO when it protests an inappropriate ALJ decision. The timeframe for
submitting protests to the AC is very short because the AC has 60 days from the date of
the ALJ decision/dismissal to issue notice of its intent to take jurisdiction in the case.
The AC has requested that the ROs submit protests within 45 days of the date of the
decision or dismissal to allow the AC adequate time for preparation, typing, and issuance
of the notice once it has determined that its jurisdiction is appropriate.
The AC may request information by telephone. You may send the records with no
breach of confidentiality because they are being sent to another organization that is part
of the Department of Health and Human Services. Honor all AC requests, and send the
records as soon as possible (See 42 CFR 480.130 and 480.130(b)).
7580 - Judicial Review - (Rev. 4, 07-18-03)
A party may obtain judicial review of the Appeals Council's decision or a decision of an
ALJ (when the request for review by the Appeals Council is denied) by filing a civil
action under the Federal Rules of Civil Procedure within 60 calendar days after the date
the party received notice of the ALJ's or Appeals Council's decision (See 42 CFR
405.730). If dissatisfied after ALJ or Appeals Council review:
 	A beneficiary can request judicial review on the issue of medical
necessity/appropriateness of setting if the amount of the denied services is $2,000
or more;
 	A beneficiary, provider, or practitioner can request judicial review on the issue of
knowledge (i.e., limitation on liability) if the amount of liability is $1,000 or
more; or
 	A provider can request judicial review on the issue of circumvention of PPS
(§1886(f)(2) of the Act) if the amount of the denied services is $1,000 or more
(See §1869(b)(2)(A) of the Act and 42 CFR 405.730).
Exhibit 7-20 - Limitation of Liability Model Paragraphs –
(Rev. 4, 07-18-03)
Summary of Limitation of Liability Conditions I-XIII:
Identify the applicable limitation of liability condition (§1879 of the Act) and use the
appropriate model paragraph. These paragraphs are not all-inclusive but are to be used as
a guide in developing the appropriate language.
Condition I: Use when beneficiary and provider are not liable under the limitation of
liability provision of the law.

Condition II: Use when beneficiary is not liable, and the provider is liable under the
limitation of liability provision of the law. Use for all denials for custodial or medically
unnecessary services/(level of) care.
Condition III: Use when beneficiary is not liable, and the provider and the Medicare
participating physician (or nonparticipating physician who furnished services on an
assigned basis) are liable under the limitation of liability provision of the law.
Beneficiary is not responsible for payment of deductible/coinsurance. Use for medically
unnecessary procedure(s) and cost outlier(s) with physician component denials (See
Exhibits 7-28 and 7-30).
Condition IIIA: Use when beneficiary is not liable, but the provider is liable under the
limitation of liability provision of the law, and the nonparticipating physician who
furnished services on an unassigned basis is liable (for a refund of any amount paid)
under §1842(l) of the Act. Use for medically unnecessary procedure(s) and cost
outlier(s) with physician component denials (See Exhibits 7-28 and 7-30).
Condition IV: Use when beneficiary is liable, and the provider is not liable under the
limitation of liability provision of the law (e.g., beneficiary had received prior notice for
non-covered services proposed/furnished by a provider, and the patient received, from a
different provider, the denied services which involve the same or reasonably comparable
conditions).
Condition V: Use when beneficiary and provider are liable under the limitation of
liability provision of the law (e.g., provider and beneficiary had received prior notice for
the same or reasonably comparable non-covered services).
Condition VI: Use when beneficiary is not liable (until date specified by you), and the
provider is liable under the limitation of liability provision of the law. Use for denials
based on a provider's request for review of a proposed continued-stay HINN (See Exhibit
7-27, Condition I), or a beneficiary's request for non-immediate review of a continued-
stay HINN, or a beneficiary's request for review of a SNF swing bed continued-stay
HINN (See Exhibit 7-27, Condition II). This applies to both PPS and non-PPS hospitals.
Condition VII: Use when beneficiary is not liable (until noon of the day specified by
you), and the provider is liable under the limitation of liability provision of the law. Use
for denials based on a beneficiary's request for an immediate review of a continued-stay
HINN (See Exhibit 7-27, Condition II). This applies to both PPS and non-PPS hospitals
(It does not apply to SNF swing bed continued-stay denials. See Condition VI).
Condition VIII: Use when beneficiary and provider are not liable under the limitation of
liability provision of the law. Use for concurrent review of continued-stay denials not
involving a HINN where you are approving payment for additional days for purposes of
post-discharge planning (i.e., grace days) (See Exhibit 7-27, Condition VII). This applies
to both PPS and non-PPS hospitals.

Condition IX: Use when beneficiary and provider are both not liable for part of the
denied period and liable for part of the denied period. Use when the beneficiary is
responsible for payment of any deductible, coinsurance, and convenience services and
items furnished during the covered admission.
Condition X: Use when beneficiary is not liable for a part of the denied period and liable
for a part of the denied period, and the provider is liable for the entire denied period. Use
when the beneficiary is not responsible for payment of the denied services, including any
deductible and coinsurance, for part of the denied period and is responsible for payment
for the denied services, including any deductible and coinsurance, for another part of the
denied period.
Condition XI: Use when beneficiary, provider, and Medicare participating physician (or
nonparticipating physician who furnished services on an assigned basis) are not liable
under the limitation of liability provision of the law. Use for outpatient/ambulatory
surgical denials (See Exhibit 7-32, Condition II). For denials involving nonparticipating
physicians who furnished services on an unassigned basis, see language under Condition
IIIA.
Condition XII: Use when beneficiary is not liable. The provider and the Medicare
participating physician (or nonparticipating physician who furnished services on an
assigned basis) are liable under the limitation of liability provision of the law. Use for
outpatient/ambulatory surgical denials (See Exhibit 7-32, Condition II). For denials
involving nonparticipating physicians who furnished services on an unassigned basis, see
language under Condition IIIA.
Condition XIII: Use when beneficiary, provider, and Medicare participating physician
(or nonparticipating physician who furnished services on an assigned basis) are liable
under the limitation of liability provision of the law. Use for outpatient/ambulatory
surgical denials (See Exhibit 7-32, Condition II). For denials involving nonparticipating
physicians who furnished services on an unassigned basis, see language under Condition
IIIA.
NOTE: For denials of inpatient hospital services furnished on or after January 1, 1989,
through December 31, 1989, delete reference to the beneficiary's responsibility for
coinsurance payment for Conditions I, II (partial denials), III (partial denials), VI, VII,
VIII, IX, and X (partial denials) (Does not apply to services/items furnished in SNF
swing beds).
For denials of SNF swing bed services/items, do not make reference to deductibles, as
deductibles do not apply to SNF swing bed denials.
Limitation of Liability Model Paragraphs:

Condition I: Use when beneficiary and provider are not liable under the limitation of
liability provision of the law:
We have also determined that neither you nor the hospital knew that the denied services
were not covered under Medicare. Medicare will, therefore, pay the hospital for the
services under a provision of the Social Security Act.
You are responsible only for payment of any amounts for deductible, coinsurance, and
convenience services and items normally not covered by Medicare furnished during this
admission. If you have paid the hospital for any denied services other than those amounts
already mentioned, arrangements can be made to pay you back. Please contact the Fiscal
Intermediary (FI) at:
FI Name
Address
Telephone Number
You must make your written request for payment within 6 months of the date of this
notice and provide the FI with the following documents:
 	A copy of this notice;
 	The bill you received for the services; and
 	The payment receipt or any other evidence (e.g., canceled check) showing that
you have paid for the denied services.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future. Should the need arise, we encourage you to
discuss arrangements for your health care with your physician.
Condition II: Use when beneficiary is not liable, and the provider is liable under the
limitation of liability provision of the law. Use for all denials for custodial or medically
unnecessary services/(level of) care:
We have also determined that you did not know that the denied services were not covered
under Medicare. Medicare will not pay the hospital for the denied services because the
hospital knew or should have known that the services were not covered under Medicare
based on (specify: brochures, prior notices (including dates), manual references, criteria,
etc.).
If you have paid the hospital for any denied services other than those amounts already
mentioned, arrangements can be made to pay you back. Please contact the Fiscal
Intermediary (FI) at:
FI Name

Address
Telephone Number
You must make your written request for payment within 6 months of the date of this
notice and provide the FI with the following documents:
 	A copy of this notice;
 	The bill you received for the services; and
 	The payment receipt or any other evidence (e.g., canceled check) showing that
you have paid for the denied services.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future. Should the need arise, we encourage you to
discuss arrangements for your health care with your physician.
For total denials, insert: "You are not responsible for payment for the denied services,
including any applicable deductible and coinsurance, except for any amounts for
convenience services and items normally not covered by Medicare."
For partial denials, insert: "You are not responsible for payment for the services which
were denied, except for any applicable amounts for deductible and coinsurance related to
the services found covered, plus any amounts for convenience services and items
normally not covered by Medicare."
Condition III: Use when beneficiary is not liable, and the provider and the Medicare
participating physician (or nonparticipating physician who furnished services on an
assigned basis) are liable under the limitation of liability provision of the law.
Beneficiary is not responsible for payment of deductible/coinsurance. Use for medically
unnecessary procedure(s) and cost outlier(s) with physician component denials (See
Exhibits 7-28 and 7-30):
We have also determined that you did not know that the denied services were not covered
under Medicare. Medicare will not pay the hospital for the denied services because the
hospital knew or should have known that the denied services were not covered under
Medicare based on (specify: brochures, prior notices (including dates), manual
references, criteria, etc.). In addition, Medicare will not pay for any of your physician's
services related to this denial because your physician knew or should have known that the
denied services were not covered under Medicare based on (specify: brochures, prior
notices (including dates), manual references, criteria, etc.).
If you have paid the hospital or your physician for any denied services other than those
amounts already mentioned, arrangements can be made to pay you back.

For refund of payment related to hospital services, please contact the Fiscal Intermediary
(FI). For refund of payment related to physician services, please contact the carrier at:
FI or Carrier Name
Address
Telephone Number
You must make your written request for payment within 6 months of the date of this
notice and provide the FI or carrier with the following documents:
 	A copy of this notice;
 	The bill you received for the services; and
 	The payment receipt or any other evidence (e.g., canceled check) showing that
you have paid for the denied services.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future. Should the need arise, we encourage you to
discuss arrangements for your health care with your physician.
For total denials, insert: "You are not responsible for payment for the denied services,
including any applicable deductible and coinsurance, except for any amounts for
convenience services and items normally not covered by Medicare."
For partial denials, insert: "You are not responsible for payment for the services which
were denied, except for any applicable amounts for deductible and coinsurance related to
the services found covered, plus any amounts for convenience services and items
normally not covered by Medicare."
Condition IIIA: Use when beneficiary is not liable, but the provider is liable under the
limitation of liability provision of the law, and the nonparticipating physician who
furnished services on an unassigned basis is liable (for a refund of any amount paid)
under §1842(l) of the Act. Use for medically unnecessary procedure(s) and cost
outlier(s) with physician component denials (See Exhibits 7-28 and 7-30):
We have also determined that you did not know that the denied services were not covered
under Medicare. Medicare will not pay the hospital for the denied services because the
hospital knew or should have known that the denied services were not covered under
Medicare based on (specify: brochures, prior notices (including dates), manual
references, criteria, etc.).
If you have paid the hospital for any of the denied services other than those amounts
already mentioned, arrangements can be made to pay you back. Please contact the Fiscal
Intermediary (FI) at:

FI Name
Address
Telephone Number
In addition, we determined that your physician knew or should have known that the
denied services were not covered under Medicare based on (specify: brochures, prior
notices (including dates), manual references, criteria, etc.). Therefore, Medicare will not
pay you for any of your physician's services related to this denial.
However, you are not responsible for payment for your physician's services because your
physician did not notify you, in writing, that his/her services would not be covered under
Medicare. You are entitled to a refund if you have paid your physician for any of the
denied services. You should contact your physician for any refund. If you have
difficulty obtaining this refund, you should contact the carrier at:
Carrier Name
Address
Telephone Number
For total denials, insert: "You are not responsible for payment for the denied services,
including any applicable deductible and coinsurance, except for any amounts for
convenience services and items normally not covered by Medicare."
For partial denials, insert: "You are not responsible for payment for the services which
were denied, except for any applicable amounts for deductible and coinsurance related to
the services found covered, plus any amounts for convenience services and items
normally not covered by Medicare."
You must make your written request for payment within 6 months of the date of this
notice and provide the FI or carrier with the following documents:
 	A copy of this notice;
 	The bill you received for the services; and
 	The payment receipt or any other evidence (e.g., canceled check) showing that
you have paid for the denied services.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future. Should the need arise, we encourage you to
discuss arrangements for your health care with your physician.
NOTE: When you determine that the nonparticipating physician did not know that the
denied services would not be covered under Medicare, or if the nonparticipating
physician gives the beneficiary or his/her representative a written notice explaining that
the services will not be covered under Medicare, the beneficiary is responsible for

payment for the denied physician services (i.e., the beneficiary is not entitled to a refund.
In these instances, use the following language as applicable:
 	"We have determined that your physician did not know that the services denied
would not be covered under Medicare. Since your physician does not accept
Medicare assignment, Medicare cannot pay you for any of your physician's
services related to this denial. Therefore, you are responsible for payment for
his/her services."
• 	OR
 	"We have determined that you knew that your physician's services would not be
covered under Medicare based on the written notification he/she gave to you on
(date of written notice), a copy of which is enclosed. Medicare will not pay you
for any of your physician's services related to this denial. Therefore, you are
responsible for payment for his/her services."
Condition IV: Use when beneficiary is liable, and the provider is not liable under the
limitation of liability provision of the law (e.g., beneficiary had received prior notice for
non-covered services proposed/furnished by a provider, and received, from a different
provider, the denied services which involve the same or reasonably comparable
conditions):
We have also determined that you knew or should have known that the denied services
were not covered under Medicare based on prior notification sent to you on (date of prior
notice), a copy of which is enclosed. Therefore, Medicare will not pay the hospital for
the denied services even though we have determined that the hospital did not know that
these services are not covered. You are responsible for payment of all costs for the
denied hospital services you received except for those covered services which can be paid
for by Medicare Part B.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future. Should the need arise, we encourage you to
discuss arrangements for your health care with your physician.
Condition V: Use when beneficiary and provider are liable under the limitation of
liability provision of the law (e.g., provider and beneficiary had received prior notice for
the same or reasonably comparable non-covered services):
We have also determined that you knew or should have known that the denied services
were not covered under Medicare based on prior notification sent to you on (date of prior
notice), a copy of which is enclosed. The hospital knew or should have known based on
(specify: brochures, prior notices (including dates), manual references, criteria, etc.).
Therefore, Medicare will not pay the hospital for the denied services. You are

responsible for payment of all costs for the denied hospital services you received except
for those covered services which can be paid for by Medicare Part B.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future. Should the need arise, we encourage you to
discuss arrangements for your health care with your physician.
For partial denials, insert: "In addition, you are responsible for payment of any amounts
for deductible, coinsurance, and convenience services and items normally not covered by
Medicare furnished during this admission."
Condition VI: Use when beneficiary is not liable (until date specified by you), and the
provider is liable under the limitation of liability provision of the law. Use for denials
based on a provider's request for review of a proposed continued-stay HINN (See Exhibit
7-27, Condition I), a beneficiary's request for non-immediate review of a continued-stay
HINN, or a beneficiary's request for review of a SNF swing bed continued-stay HINN
(see Exhibit 7-27, Condition II). This applies to both PPS and non-PPS hospitals:
We notified you by telephone on (date of telephone notification) of our determination
that the services you are receiving are not covered by Medicare and that if you decided to
remain in the hospital, beginning on (date), you would be responsible for payment of all
costs for hospital services you receive except for those covered services which can be
paid for by Medicare Part B. If you decide to leave the hospital prior to (date), you will
be responsible only for payment of any applicable amounts for deductible, coinsurance,
and convenience services and items normally not covered by Medicare.
We are also advising your physician and the hospital of this denial. You should discuss
with your physician other arrangements for any further health care you may now require.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future.
For PPS hospitals or hospitals participating in State payment control systems or
demonstration projects, insert the date of the third day following the date of receipt of the
HINN.
For non-PPS hospitals, PPS exempt units, and SNF swing beds, insert the date of the day
following the date of receipt of the HINN.
Condition VII: Use when beneficiary is not liable (until noon of the day specified by
you), and the provider is liable under the limitation of liability provision of the law. Use
for denials based on a beneficiary's request for an immediate review of a continued-stay

HINN (See Exhibit 7-27, Condition II). This applies to both PPS and non-PPS hospitals.
It does not apply to SNF swing bed continued-stay denials (See Condition VI):
We notified you by telephone on (date of telephone notification) of our determination
that the services you are receiving are not covered by Medicare and that if you decided to
remain in the hospital after 12 noon on (day following date of your telephone
notification), you would be responsible for payment of all costs of hospital services you
receive after that time except for those covered services which can be paid for by
Medicare Part B. If you decide to leave the hospital prior to 12 Noon on (day following
date of your telephone notification), you will be responsible only for payment of any
applicable amounts for deductible, coinsurance, and convenience services and items
normally not covered by Medicare.
We are also advising your physician and hospital of this denial. You should discuss other
arrangements for any further health care you may now require with your physician.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future.
Condition VIII: Use when beneficiary and provider are not liable under the limitation of
liability provision of the law. Use for concurrent review of continued-stay denials not
involving a HINN where you are approving payment for additional days for the purpose
of post-discharge planning (i.e., grace days) (See Exhibit 7-27, Condition VII). This
applies to both PPS and non-PPS hospitals:
We have also determined that neither you nor the hospital knew that the denied services
would no longer be covered under Medicare beginning (date of first non-covered day).
Therefore, under a provision of the Social Security Act, Medicare will pay for (select
number of days up to 2) additional day(s) from the date of this notice to arrange for your
post-discharge care. If you decide to remain in the hospital beginning on (2nd or 3rd day
from date of notice), you will be responsible for payment of all costs of hospital services
you receive except for those covered services which can be paid for by Medicare Part B.
If you decide to leave the hospital prior to (2nd or 3rd day from date of notice), you will
be responsible only for payment of any applicable amounts for deductible, coinsurance,
and convenience services and items normally not covered by Medicare.
We are also advising your physician and hospital of this denial. You should discuss other
arrangements for any further health care you may now require with your physician.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. Please be aware that Medicare will pay for all medically necessary and
appropriate hospital care you may require in the future.

Condition IX: Use when beneficiary and provider are both not liable for part of the
denied period and liable for part of the denied period. Use when the beneficiary is
responsible for payment of any deductible, coinsurance, and convenience services and
items applicable to the covered admission:
We have determined that neither you nor the hospital knew that the denied services from
(specify the date(s) not liable) were not covered under Medicare. Medicare will,
therefore, pay the hospital for the denied services for this period under a provision of the
Social Security Act.
We have also determined that you and the hospital knew or should have known that the
denied services from (specify the date(s) liable) were not covered under Medicare. You
knew or should have known based on a prior notification sent to you on (date of prior
notice), a copy of which is enclosed. The hospital knew or should have known based on
(specify: brochures, prior notices (including dates), manual references, criteria, etc.).
Medicare will not pay the hospital for the denied services for this period. You are
responsible for payment of all costs of the denied hospital services you received from
(specify the date(s) liable) except for those covered services which can be paid for by
Medicare Part B. In addition, you are responsible for payment of any amounts for
deductible, coinsurance, and convenience services and items normally not covered by
Medicare which are applicable to this admission.
If you have paid the hospital for any of the denied services from (specify the date(s) not
liable), other than any applicable amounts for deductible, coinsurance, and convenience
services and items, arrangements can be made to pay you back. Please contact the Fiscal
Intermediary (FI) at:
FI Name
Address
Telephone Number
You must make your written request for payment within 6 months of the date of this
notice and provide the FI with the following documents:
 	A copy of this notice;
 	The bill you received for the services; and
 	The payment receipt or any other evidence (e.g., canceled check) showing that
you have paid for the denied services.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future. Should the need arise, we encourage you to
discuss arrangements for your health care with your physician.

Condition X: Use when beneficiary is not liable for a part of the denied period and liable
for a part of the denied period, and the provider is liable for the entire denied period. Use
when the beneficiary is not responsible for payment for the denied services, including any
deductible and coinsurance, for part of the denied period and is responsible for payment
of the denied services, including any deductible and coinsurance, for another part of the
denied period:
We have determined that you did not know that the denied services from (specify the
date(s) not liable) were not covered under Medicare. We have also determined that you
knew or should have known that the denied services from (specify the date(s) liable) were
not covered under Medicare based on a prior notification sent to you on (date of prior
notice), a copy of which is enclosed. The hospital knew or should have known that the
denied services from (specify the date(s) denied) were not covered under Medicare based
on (specify: brochures, prior notices (including dates), manual references, criteria, etc.).
Therefore, Medicare will not pay the hospital for the denied services.
You are not responsible for payment of the denied services from (specify the date(s) not
liable) except for any amounts for convenience services and items normally not covered
by Medicare. You are responsible for payment of all costs for the denied hospital
services you received from (specify the date(s) liable) except for those covered services
which can be paid for by Medicare Part B.
If you have paid the hospital for any of the denied services from (specify the date(s) not
liable) other than any amounts for convenience services and items, arrangements can be
made to pay you back. Please contact the Fiscal Intermediary (FI) at:
FI Name
Address
Telephone Number
You must make your written request for payment within 6 months of the date of this
notice and provide the FI with the following documents:
 	A copy of this notice;
 	The bill you received for the services; and
 	The payment receipt or any other evidence (e.g., canceled check) showing that
you have paid for the denied services.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future. Should the need arise, we encourage you to
discuss arrangements for your health care with your physician.
Condition XI: Use when beneficiary, provider, and Medicare participating physician (or
nonparticipating physician who furnished services on an assigned basis) are not liable

under the limitation of liability provision of the law. Use for outpatient/ambulatory
surgical denials (See Exhibit 7-32, Condition II) (For denials involving nonparticipating
physicians who furnished services on an unassigned basis, see language under Condition
IIIA):
We have also determined that you, the provider, and your physician did not know that the
denied services were not covered under Medicare. Medicare will, therefore, pay the
provider and your physician for the denied services under a provision of the Social
Security Act.
You are responsible only for payment of any applicable amounts for deductible,
coinsurance, and convenience services and items normally not covered by Medicare (e.g.,
telephone and television charges). If you have paid the provider or your physician for
any of the denied services other than those amounts already mentioned, arrangements can
be made to pay you back. You must make your written request for payment within 6
months of the date of this notice and provide the FI and/or carrier with the following
documents:
 	A copy of this notice;
 	The bill you received for the services; and
 	The payment receipt or any other evidence (e.g., canceled check) showing that
you have paid for the denied services.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate care
you may require in the future. Should the need arise, we encourage you to discuss
arrangements for your health care with your physician.
For ambulatory surgical center settings insert: "Please contact the carrier at:"
Carrier Name
Address
Telephone Number
For hospital outpatient settings insert: “For refund of payment related to hospital services,
please contact the Fiscal Intermediary (FI) at:”
FI Name
Address
Telephone Number
For hospital outpatient settings insert: “For refund of payment related to physician
services, please contact the carrier at:”
Carrier Name

Address
Telephone Number
Condition XII: Use when beneficiary is not liable. The provider and the Medicare
participating physician (or nonparticipating physician who furnished services on an
assigned basis) are liable under the limitation of liability provision of the law. Use for
outpatient/ambulatory surgical denials (See Exhibit 7-32, Condition II) (For denials
involving nonparticipating physicians who furnished services on an unassigned basis, see
language under Condition IIIA):
We have also determined that you did not know that the denied services were not covered
under Medicare. Medicare will not pay the provider for the denied services because the
provider knew or should have known that the denied services were not covered under
Medicare based on (specify: brochures, prior notices (including dates), manual
references, criteria, etc.). In addition, Medicare will not pay for any of the physician's
services related to this denial because your physician knew or should have known that the
denied services were not covered under Medicare based on (specify: brochures, prior
notices (including dates), manual references, criteria, etc.).
You are not responsible for payment for the denied services except for any amounts for
convenience services and items normally not covered by Medicare (e.g., telephone and
television charges). If you have paid the provider or your physician for any of the denied
services other than those amounts already mentioned, arrangements can be made to pay
you back.
You must make your written request for payment within 6 months of the date of this
notice and provide the FI and/or carrier with the following documents:
 	A copy of this notice;
 	The bill you received for the services; and
 	The payment receipt or any other evidence (e.g., canceled check) showing that
you have paid for the denied services.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate care
you may require in the future. Should the need arise, we encourage you to discuss
arrangements for your health care with your physician.
For ambulatory surgical center settings insert: "Please contact the carrier at:"
Carrier Name
Address
Telephone Number

For hospital outpatient settings insert: “For refund of payment related to hospital services,
please contact the Fiscal Intermediary (FI) at:”
FI Name
Address
Telephone Number
For hospital outpatient settings insert: “For refund of payment related to physician
services, please contact the carrier at:”
Carrier Name
Address
Telephone Number
Condition XIII: Use when beneficiary, provider, and Medicare participating physician
(or nonparticipating physician who furnished services on an assigned basis) are liable
under the limitation of liability provision of the law. Use for outpatient/ambulatory
surgical denials (See Exhibit 7-32, Condition II) (For denials involving nonparticipating
physicians who furnished services on an unassigned basis, see language under Condition
IIIA):
We have also determined that you knew or should have known that the denied services
were not covered under Medicare based on a prior notification sent to you on (date of
prior denial notice from any QIG, FI/carrier, physician, or provider), a copy of which is
enclosed. The provider knew or should have known that the denied services were not
covered under Medicare based on (specify: brochures, prior notices (including dates),
manual references, criteria, etc.). Your physician knew or should have known that the
services were not covered under Medicare based on (specify: brochures, prior notices
(including dates), manual references, criteria, etc.). Therefore, Medicare will not pay the
provider or your physician for the denied services. You are responsible for payment of
all costs for the denied services you received including any applicable amounts for
deductible, coinsurance, and convenience services and items normally not covered by
Medicare (e.g., telephone and television charges).
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate care
you may require in the future. Should the need arise, we encourage you to discuss
arrangements for your health care with your physician.
Exhibit 7-21 - Reconsideration Model Paragraphs - (Rev. 4, 07-18-03)
Summary of Reconsideration Conditions I-III:
Identify the applicable reconsideration condition, and use that model paragraph.

Condition I: Use for preadmission denials (i.e., the patient is not yet admitted to the
hospital).
Condition II: Use for concurrent denials (i.e., the patient is still in the hospital).
Condition III: Use for retrospective denials (i.e., the patient has been discharged from the
hospital).
Reconsideration Model Paragraphs:
Condition I: Use for preadmission denials (i.e., the patient is not yet admitted to the
hospital):
If you, your physician, or hospital disagrees with our determination, you may appeal this
denial decision by requesting an expedited reconsideration by telephone or in writing.
You must make your request for an expedited reconsideration within 3 calendar days
from the date of this notice directly to us at:
QIO Name
Address
Telephone Number
We will complete our expedited reconsideration and send a written notice to you within 3
working days.
However, if you do not wish an expedited reconsideration, you, your physician, or
hospital are still entitled to a reconsideration. You must submit your request in writing
within 60 calendar days from the receipt of this notice to us at the above address.
You may also make your request to any Social Security Office or Railroad Retirement
Office (if you are a Railroad Retirement beneficiary). Your request will be forwarded to
us.
As a result of our review, we may reaffirm or reverse our prior denial determination. If
we reaffirm the denial determination, you will continue to be responsible for payment of
services furnished as specified above. If we reverse the denial determination, you will be
refunded any amount collected by the hospital except for payment of deductible,
coinsurance, or any convenience services or items normally not covered by Medicare.
Condition II: Use for concurrent denials (i.e., the patient is still in the hospital):
If you disagree with our determination and you decide to remain in the hospital, you,
your physician, or hospital may appeal this denial decision while you are still in the
hospital by requesting an expedited reconsideration through the hospital or by
telephoning or writing us at:

QIO Name
Address
Telephone Number
We will complete our expedited reconsideration and send a written notice to you within 3
working days.
However, if you do not remain in the hospital after (date liability begins), or if you
remain in the hospital and do not request an expedited reconsideration, you, your
physician, or hospital are still entitled to a reconsideration. You must submit your
request in writing within 60 calendar days from receipt of this notice to us at the above
address.
You may also make your request to any Social Security Office or Railroad Retirement
Office (if you are a Railroad Retirement beneficiary). Your request will be forwarded to
us.
As a result of our review, we may reaffirm or reverse our prior denial determination. If
we reaffirm the denial determination, you will continue to be responsible for payment of
services furnished as specified above. If we reverse the denial determination, you will be
refunded any amount collected by the hospital except for payment of deductible,
coinsurance, or any convenience services or items normally not covered by Medicare.
Condition III: Use for retrospective denials (i.e., the patient has been discharged from the
hospital):
If you, your physician, or hospital disagrees with our determination, you may appeal this
denial decision by requesting a reconsideration. You must submit your request in writing
within 60 calendar days from receipt of this notice directly to us at:
QIO Name
Address
Telephone Number
You may also make your request to any Social Security Office or Railroad Retirement
Office (if you are a Railroad Retirement beneficiary). Your request will be forwarded to
us.
As a result of our review, we may reaffirm or reverse our prior denial determination. If
we reaffirm the denial determination, you will continue to be responsible for payment of
services furnished as specified above. If we reverse the denial determination, you will be
refunded any amount collected by the hospital except for payment of deductible,
coinsurance, or any convenience services or items normally not covered by Medicare.
Exhibit 7-23 - Record Not Submitted Timely Denial Model Notice -
(Rev. 4, 07-18-03)

Use for retrospective admission denials when the medical record (or itemized bill for cost
outliers) is not submitted timely by the hospital.
 	Opportunity for discussion does not apply.
 	Limitation of liability (§1879 of the Act) does not apply.
 	Reconsideration does not apply.
NOTE: For inpatient hospital services furnished on or after January 1, 1989, through
December 31, 1989, delete reference to the beneficiary's:
 	Responsibility for payment of the coinsurance; and
 	Utilization of the benefit period.
Record Not Submitted Timely Denial Model Notice:
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
We have denied Medicare payment for your admission of (date) to (provider name) for
(specify the procedure/treatment or condition/services). This denial is due solely to the
hospital's failure to submit your (select: medical record; or itemized bill; or medical
record and itemized bill) as requested by us. This information is necessary for us to
complete review of this claim.

Medicare will not pay the hospital for this admission. However, you are not responsible
for payment of the denied services except for any applicable amounts for deductible,
coinsurance, and convenience services and items normally not covered by Medicare. If
you have paid the hospital for any of the denied services other than those amounts just
mentioned, arrangements can be made to pay you back. Please contact the Fiscal
Intermediary (FI) at:
FI Name
Address
Telephone Number
You must make your written request for payment within 6 months of the date of this
notice and provide the FI with the following documents:
 	A copy of this notice;
 	The bill you received for the services; and
 	The payment receipt or any other evidence (e.g., canceled check) showing that
you have paid for the denied services.
Be aware that the days you spent as an inpatient will be subtracted from the total number
of days available to you in this benefit period. Your case can be reopened when the
necessary information is submitted by the hospital. You will be notified of the decision
resulting from this review.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Exhibit 7-24 - Billing Error Denial Model Notice - (Rev. 4, 07-18-03)
Use for retrospective admission denials when review cannot be completed due to a
provider billing error (e.g., incorrectly billed an uninterrupted stay as two separate
admissions). Use this notice if you are responsible for notification of billing errors as a
result of your agreements with the FI(s) and provider.
 	Opportunity for discussion does not apply.

 	Limitation of liability (§1879 of the Act) does not apply.
 	Reconsideration does not apply.
 	Do not notify the beneficiary.
NOTE: For inpatient hospital services furnished on or after January 1, 1989, through
December 31, 1989, delete reference to the beneficiary's responsibility for payment of the
coinsurance.
Billing Error Denial Model Notice:
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
We have denied Medicare payment for the above admission of (date) for (specify the
procedure/treatment or condition/services). In reviewing this admission, an error in
billing was discovered which precludes us from completing review of this claim. Our
determination is based on the following: (Relate discussion to specific billing error).
Medicare will not pay the hospital for this admission. The beneficiary or his/her
representative is only responsible for payment for any applicable amounts for deductible,
coinsurance, and convenience services and items normally not covered by Medicare.
This case can be reopened when a corrected bill is submitted by the hospital to the Fiscal
Intermediary (FI), at which time the FI will resubmit the case to us to complete review.

Sincerely,
Medical Director (or designated physician)
Chief Executive Officer, etc., as appropriate
ccs:
Hospital
Physician
FI
Carrier
Exhibit 7-25 - Preadmission Denial Model Notice - (Rev. 4, 07-18-03)
Use only for denials of services furnished prior to admission to the facility.
 	Opportunity for discussion applies.
 	Limitation of liability (§1879 of the Act) does not apply.
 	Reconsideration applies (See Exhibit 7-21).
Preadmission Denial Model Notice:
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if

the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Our physician reviewers have denied Medicare payment for your proposed admission of
(date) (specify, if known: "to" (name of provider)) for (specify the procedure/treatment
or condition/services).
Prior to reaching this decision, we gave your physician (if known: and the hospital) an
opportunity to discuss your case.
After a review of your medical record and any additional information provided, we
determined that (give a full discussion of the specific reason(s) for denial).
Medicare will not pay for your proposed admission if you and your physician decide you
should be admitted to the hospital. We are also advising your physician (if known: and
the hospital) of this denial. You should discuss with your physician other arrangements
for any further health care you may now require.
NOTE: For denials of provider services only, insert: “Therefore, you will be responsible
for payment of all costs for the hospital services you receive except for those covered
services which can be paid for by Medicare Part B.”
NOTE: For denials of provider and related physician services, insert: "Therefore, you
will be responsible for payment of all costs for the hospital and related physician services
you receive except for those covered services which can be paid for by Medicare Part B."
Upon receipt of this notice, you will continue to be responsible for payment of denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future.
Use reconsideration paragraph under Condition I.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Exhibit 7-26 - Admission Denial Model Notices - (Rev. 4, 07-18-03)
Identify the denial condition, and use the appropriate model notice.
Condition I: Use for retrospective admission denials (PPS and non-PPS hospitals) based
on inappropriate setting, medically unnecessary, or custodial care. Revise accordingly
for denials involving direct admission for NF swing bed services with or without an
admission HINN.
Condition II: Use for retrospective denials based on inappropriate setting, medically
unnecessary, or custodial care involving "deemed" admission date cases.
For both conditions:
 	Opportunity for discussion applies.
 	Limitation of liability (§1879 of the Act) applies (See Exhibit 7-20).
 	Reconsideration applies (See Exhibit 7-21).
Admission Denial Model Notices:
Condition I: Use for retrospective admission denials (PPS and non-PPS hospitals) based
on inappropriate setting, medically unnecessary, or custodial care. Revise accordingly
for denials involving direct admission for swing bed services with or without an
admission HINN.
YOUR LETTERHEAD
Date of Notice

Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Our physician reviewers have denied Medicare payment for your admission of (date) to
(name of provider) for (specify the procedure/treatment or condition/services).
Prior to reaching this decision, we gave your physician and the hospital an opportunity to
discuss your case.
After a review of your medical record and any additional information provided, we
determined that (give a complete, fact-specific discussion of why admitted, care received,
reason Medicare is denying, etc.).
Select appropriate limitation of liability paragraph in Exhibit 7-20 under Condition I, II,
III, IV, V, IX, or X.
Use reconsideration paragraph in Exhibit 7-21 under Condition III.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Condition II: Use for retrospective denials based on inappropriate setting, medically
unnecessary, or custodial care involving "deemed" admission date cases.
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Our physicians have reviewed your admission of (date) to (name of provider) for (specify
the procedure/treatment or condition/services). We have determined that the services you
received from (date) through (date) are denied for Medicare payment. We have also
determined that the services you received for (specify the procedure/treatment or

condition/services) beginning (date) were medically necessary and appropriate.
Therefore, Medicare will pay for hospital services from (date) through (date).
Prior to reaching this decision, we gave your physician and the hospital an opportunity to
discuss your case.
After a review of your medical record and any additional information provided, we
determined that (give a complete, fact-specific discussion of why admitted, care received,
reason Medicare is denying, etc.).
Select appropriate limitation of liability paragraph in Exhibit 7-20 under Condition I, II,
III, IV, V, IX, or X.
Use reconsideration paragraph in Exhibit 7-21 under Condition III.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Exhibit 7-27 - Continued-stay Denial Notices - (Rev. 4, 07-18-03)
Summary of Continued-stay Denial Notices Conditions I-VIII:

Identify the denial condition, and use the appropriate model notice.
Condition I: Use for concurrent denials when the provider requests review of a proposed
continued-stay HINN.
Condition II: Use for concurrent denials when the beneficiary requests an immediate or
non-immediate review of a continued-stay HINN (includes SNF swing bed continued-
stay denials).
Condition III: Use for concurrent denials when the provider requests review of a
proposed combined HINN (i.e., acute care continued-stay denial involving NF swing bed
services).
Condition IV: Use for concurrent denials when the provider requests review of a
proposed combined HINN (i.e., acute care continued-stay denial involving SNF swing
bed services).
Condition V: Use for concurrent denials when the beneficiary requests an immediate or
non-immediate review of a combined HINN (i.e., acute care continued-stay denial
involving NF swing bed services).
Condition VI: Use for concurrent denials when the beneficiary requests an immediate or
non-immediate review of a combined HINN (i.e., acute care continued-stay denial
involving SNF swing bed services).
Condition VII: Use for concurrent denials not involving a continued-stay HINN.
Condition VIII: Use for retrospective denials with or without a continued-stay HINN
(For PPS cases without a continued-stay HINN, this condition only applies to denials
involving the day outlier period of the stay).
For all conditions:
 	Opportunity for discussion applies.
 	Limitation of liability (§1879 of the Act) applies (See Exhibit 7-20).
 	Reconsideration applies (See Exhibit 7-21).
Continued-stay Denial Model Notices:
Condition I: Use for concurrent denials when the provider requests review of a proposed
continued-stay HINN.
YOUR LETTERHEAD

Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Based on (name of provider)'s request, our physicians have reviewed your admission on
(date) for (specify the procedure/treatment or condition/services). We have determined
that your admission was medically necessary and appropriate. However, the services you
are currently receiving are not covered by Medicare. Therefore, any inpatient hospital
services you receive beginning (date) will not be paid by Medicare.
Prior to reaching this decision, we considered the information provided through a
telephone discussion with (insert either "you" or the name of the representative to whom
you spoke) on (date of solicitation of views), and any comments received from your
physician and the hospital.
After a review of your medical record and any additional information provided, we
determined that (give a complete, fact-specific discussion of why admitted, care received,
reason Medicare is denying, etc.).
Use limitation of liability paragraph in Exhibit 7-20 under Condition VI.
Use reconsideration paragraph in Exhibit 7-21 under Condition II.
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.

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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Condition II: Use for concurrent denials when the beneficiary requests an immediate or
non-immediate review of a continued-stay HINN (includes SNF swing bed continued-
stay denials).
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if

the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
On (date of request for review of HINN), you requested that we review your case because
you received, with your physician's concurrence, a notice of non-coverage from (name of
provider) on (date). Our physicians have reviewed your admission of (date) to (name of
provider) for (specify the procedure/treatment or condition/services). We have
determined that your admission was medically necessary and appropriate. We agree,
however, with your physician and the hospital that for the reasons specified below, as of
(date specified by QIO under Condition VI or VII of limitation of liability paragraph), the
services you are currently receiving are not covered by Medicare because (reason for
denial). Therefore, any inpatient hospital services you receive beginning (date specified
by QIO under Condition VI or VII of limitation of liability paragraph) will not be paid by
Medicare.
Prior to reaching this decision, we considered the information provided through telephone
discussions with (insert either "you" or the name of the representative to whom you
spoke) on (date of solicitation of views), and any comments received from your physician
and the hospital.
After a review of your medical record and the information provided, we determined that
(give a complete, fact-specific discussion of why admitted, care received, reason
Medicare is denying, etc.).
Select limitation of liability paragraph in Exhibit 7-20 under Condition VI or VII.
Use reconsideration paragraph in Exhibit 7-21 under Condition II.
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.
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.
Sincerely,

Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Condition III: Use for concurrent denials when the provider requests review of a
proposed combined HINN (i.e., acute care continued-stay denial involving NF swing bed
services).
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Based on (name of provider)'s request, our physicians have reviewed your admission for
acute care services on (date) for (specify the procedure/treatment or condition/services).
We have determined that your admission for acute care services was medically necessary
and appropriate but that you no longer require acute care services beginning (date of first
non-covered acute care day). The care that you need now is not covered by Medicare.
Therefore, any inpatient hospital services you receive beginning (date) will not be paid by
Medicare.
Prior to reaching this decision, we considered the information provided through a
telephone discussion with (insert either "you" or the name of the representative to whom
you spoke) on (date of solicitation of views), and any comments received from your
physician and the hospital.

After a review of your medical record and the information provided, we determined that
(give a complete, fact-specific discussion of why admitted, care received, reason
Medicare is denying, etc.).
We notified you on (date of (telephone) notification) that beginning on (date of the day
following the date of receipt of the QIO notification) you would be responsible for
payment of all costs for hospital services you receive except for those covered services
which can be paid for by Medicare Part B. If you decide to leave the hospital prior to
(date of the day following the date of receipt of the QIO notification), you will be
responsible only for payment of any applicable amounts for deductible, coinsurance, and
convenience services and items normally not covered by Medicare.
We are also advising your physician and hospital of this denial. You should discuss with
your physician other arrangements for any further health care you may now require.
Upon receipt of this notice, you will continue to be responsible for payment for denied
acute care services occurring in the future which involve the same or reasonably
comparable conditions. However, Medicare will pay for all medically necessary and
appropriate acute hospital care you may require in the future.
Use reconsideration paragraph in Exhibit 7-21 under Condition II.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician

FI
Carrier
Condition IV: Use for concurrent denials when the provider requests review of a
proposed combined HINN (i.e., acute care continued-stay denial involving SNF swing
bed services).
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Based on (name of provider)'s request, our physicians have reviewed your admission on
(date) for (specify the procedure/treatment or condition/services). We have determined
that your admission for acute care services was medically necessary and appropriate, but
that you no longer require acute care services beginning (date of first non-covered acute
care day). However, we have determined that you still require the type of hospital
services which are furnished in a Skilled Nursing Facility (SNF) beginning (specify date
of first SNF swing bed day). These services are known as SNF swing bed services.
Medicare will pay for your SNF swing bed services if you have not used up all your SNF
benefit days.
Prior to reaching this decision, we considered the information provided through a
telephone discussion with (insert either "you" or the name of the representative to whom
you spoke) on (date of solicitation of views), and any comments received from your
physician and the hospital.

After a review of your medical record and the information provided, we determined that
(give a complete, fact-specific discussion of why admitted, care received, reason
Medicare is denying, etc.).
We notified you on (date of (telephone) notification) of our determination that you no
longer required acute care services, but that you do still require SNF services. Therefore,
you are responsible only for payment of any amounts for deductible, coinsurance, and
convenience services and items normally not covered by Medicare applicable to the acute
care and SNF services received during your entire hospital stay.
We are also advising your physician and hospital of this determination.
Upon receipt of this notice, you will be responsible for payment for denied acute care
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
acute hospital care you may require in the future. Should the need arise for further acute
care, we encourage you to discuss arrangements for your health care with your physician.
Use reconsideration paragraph in Exhibit 7-21 under Condition II.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI

Carrier
Condition V: Use for concurrent denials when the beneficiary requests an immediate or
non-immediate review of a combined HINN (i.e., acute care continued-stay denial
involving NF swing bed services).
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
On (date of request for review of HINN), you requested that we review your case because
you received a notice of non-coverage from (name of provider) on (date), and you believe
you still require acute care services. Our physicians have reviewed your admission of
(date of acute care admission) for (specify the procedure/treatment or condition/services).
We have determined that your admission for acute care services was medically necessary
and appropriate but that you no longer require acute care services beginning (date of first
non-covered acute care day). The care that you need now is not covered by Medicare.
Therefore, any inpatient hospital services you receive beginning (date) will not be paid by
Medicare.
Prior to reaching this decision, we considered the information provided through a
telephone discussion with (insert either "you" or the name of the representative to whom
you spoke) on (date of solicitation of views), and any comments received from your
physician and the hospital.
After a review of your medical record and the information provided, we determined that
(give a complete, fact-specific discussion of why admitted, care received, reason
Medicare is denying, etc.).

We notified you on (date of (telephone) notification) that beginning on (date of the day
following the date of receipt of the HINN) you would be responsible for payment of all
costs for hospital services you receive except for those covered services which can be
paid for by Medicare Part B. If you decide to leave the hospital prior to (date of the day
following the date of receipt of the HINN), you will be responsible only for payment of
any applicable amounts for deductible, coinsurance, and convenience services and items
normally not covered by Medicare.
We are also advising your physician and hospital of this denial. You should discuss with
your physician other arrangements for any further health care you may now require.
Upon receipt of this notice, you will continue to be responsible for payment of denied
acute care services occurring in the future which involve the same or reasonably
comparable conditions. However, Medicare will pay for all medically necessary and
appropriate acute hospital care you may require in the future.
Use reconsideration paragraph in Exhibit 7-21 under Condition II.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier

Condition VI: Use for concurrent denials when the beneficiary requests an immediate or
non-immediate review of a combined HINN (i.e., acute care continued-stay denial
involving SNF swing bed services).
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
On (date of request for review of HINN), you requested that we review your case because
you received a notice of non-coverage from (name of provider) on (date), and you believe
you still require acute care services. Our physicians have reviewed your admission of
(date of acute care admission) for (specify the acute care procedure/treatment or
condition/services). We have determined that your admission for acute care services was
medically necessary and appropriate, but that you no longer required acute care services
beginning (date of first non-covered acute care day). However, we have determined that
you still require the type of hospital services which are furnished in a Skilled Nursing
Facility (SNF) beginning (specify date of first SNF swing bed day). These services are
known as SNF swing bed services. Medicare will pay for your SNF swing bed services if
you have not used up all your SNF benefit days.
Prior to reaching this decision, we considered the information provided through a
telephone discussion with (insert either "you" or the name of the representative to whom
you spoke) on (date of solicitation of views), and any comments received from your
physician and the hospital.
After a review of your medical record and the information provided, we determined that
(give a complete, fact-specific discussion of why admitted, care received, reason
Medicare is denying, etc.).

We notified you on (date of (telephone) notification) of our determination that you no
longer require acute care services, but that you do still require SNF services. Therefore,
you are responsible only for payment of any amounts for deductible, coinsurance, and
convenience services and items normally not covered by Medicare applicable to the acute
care and SNF services received during your entire hospital stay.
We are also advising your physician and hospital of this determination.
Upon receipt of this notice, you will be responsible for payment for denied acute care
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
acute hospital care you may require in the future. Should the need arise for further acute
care, we encourage you to discuss arrangements for your health care with your physician.
Use reconsideration paragraph in Exhibit 7-21 under Condition II.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier

Condition VII: Use for concurrent denials not involving a continued-stay HINN.
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Our physicians have reviewed your admission of (date) to (name of provider) for (specify
the procedure/treatment or condition/services). We have determined that your admission
was medically necessary and appropriate. However, the services you are currently
receiving are not covered by Medicare. Therefore, any inpatient hospital services you
receive beginning (date) will not be paid by Medicare.
Prior to reaching this decision, we gave your physician and the hospital an opportunity to
discuss your case.
After a review of your medical record and any additional information provided, we
determined that (give a complete, fact-specific discussion of why admitted, care received,
reason Medicare is denying, etc.).
Use limitation of liability paragraph in Exhibit 7-20 under Condition VIII.
Use reconsideration paragraph in Exhibit 7-21 under Condition II.
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.

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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Condition VIII: Use for retrospective denials with or without a continued-stay HINN
(For PPS cases without a continued-stay HINN, this condition only applies to denials
involving the day outlier period of the stay).
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if

the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Our physicians have reviewed your admission of (date) to (name of provider) for (specify
the procedure/treatment or condition/services). We have determined that your admission
was medically necessary and appropriate. However, the inpatient hospital services you
received beginning (specify denied date(s)) are denied for Medicare payment.
Prior to reaching this decision, we gave your physician and the hospital an opportunity to
discuss your case.
After a review of your medical record and any additional information provided, we
determined that (give a complete, fact-specific discussion of why admitted, care received,
reason Medicare is denying, etc.).
Select appropriate limitation of liability paragraph in Exhibit 7-20 under Condition I, II,
III, IV, V, IX, or X.
Use reconsideration paragraph in Exhibit 7-21 under Condition III.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI

Carrier
Exhibit 7-28 - Procedure Denial Model Notices - (Rev. 4, 07-18-03)
Identify the denial condition, and use the appropriate model notice.
Condition I: Use for retrospective procedure denials.
If the beneficiary required hospital inpatient services but the procedure is not medically
necessary, then only the procedure is denied. Use the procedure denial model notice.
 	Opportunity for discussion applies.
 	Limitation of liability (§1879 of the Act) applies (See Exhibit 7-20).
 	Reconsideration applies (See Exhibit 7-21).
Condition II: Use for preadmission denials.
If the proposed procedure is non-covered and is the only reason for the admission, then
the admission is denied. Use the preadmission denial model notice (See Exhibit 7-25).
Condition III: Use for retrospective admission denials.
If the procedure is non-covered and is the only reason for the admission, then the
admission is denied. Use the admission denial model notice (See Exhibit 7-26, Condition
I).
Condition IV: Use for concurrent or retrospective continued-stay denials.
If the beneficiary required admission initially, but remain(s/ed) in the facility for the
proposed procedure only, then the continued-stay is non-covered and is denied. Use the
appropriate continued-stay denial model notice (See Exhibit 7-27).
NOTE: For any of the above conditions, if the denial is for a procedure that cannot be
repeated (e.g., total removal of an organ), do not use the future liability paragraph:
"Upon receipt..."
Procedure Denial Model Notices:
Condition I: Use for retrospective procedure denials.
YOUR LETTERHEAD
Date of Notice
Name of Patient

Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Our physicians have reviewed your admission of (date) to (name of provider) for (specify
the procedure/treatment or condition/services). We determined that your admission was
medically necessary and appropriate. However, the (name of procedure) that was
performed on (date) is denied for Medicare payment.
Prior to reaching this decision, we gave your physician and the hospital an opportunity to
discuss your case.
After a review of your medical record and any additional information provided, we
determined that (give a complete, fact-specific discussion of why admitted, care received,
reason Medicare is denying, etc.).
Select appropriate limitation of liability paragraph in Exhibit 7-20 under condition I, III,
IV, V, IX, or X.
Use reconsideration paragraph in Exhibit 7-21 under Condition III.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Exhibit 29 - Day Outlier Denial Model Notice - (Rev. 4, 07-18-03)
Use for retrospective day outlier denials (PPS hospitals) and retrospective partial
admission denials (non-PPS hospitals) based on inappropriate setting, medically
unnecessary, or custodial care. This applies to those cases where days are carved-out
from the outlier period of a PPS admission or from a non-PPS admission. In those cases
where the denial is for an uninterrupted period (i.e., beginning at a specified date through
discharge), use the appropriate continued-stay denial model notice (See Exhibit 7-27).
 	Opportunity for discussion applies.
 	Limitation of liability (§1879 of the Act) applies (See Exhibit 7-20).
 	Reconsideration applies (See Exhibit 7-21).
Day Outlier Denial Model Notice:
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date

Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Our physicians have reviewed your admission of (date) to (name of provider) for (specify
the procedure/treatment or condition/services). We determined that your admission was
medically necessary and appropriate. However, the inpatient hospital services you
received (specify denied date(s)) for a total of (number) day(s) are denied for Medicare
payment.
Prior to reaching this decision, we gave your physician and the hospital an opportunity to
discuss your case.
After a review of your medical record and any additional information provided, we
determined that (give a complete, fact-specific discussion of why admitted, care received,
reason Medicare is denying, etc.).
Select appropriate limitation of liability paragraph in Exhibit 7-20 under Condition I, II,
IV, V, IX, or X.
Use reconsideration paragraph in Exhibit 7-21 under Condition III.
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.
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.
Sincerely,

Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Exhibit 7-30 - Cost Outlier Denial Model Notices - (Rev. 4, 07-18-03)
Identify the denial condition, and use the appropriate model notice.
Condition I: Use for retrospective denials of services or items based on inappropriate
setting or medically unnecessary.
 	Opportunity for discussion applies.
 	Limitation of liability (§1879 of the Act) applies (See Exhibit 7-20).
 	Reconsideration applies (See Exhibit 7-21).
Condition II: Use for retrospective denials of services or items based on duplicative
billing, or for services not actually furnished or not ordered by the physician.
 	Opportunity for discussion does not apply.
 	Limitation of liability (§1879 of the Act) does not apply.
 	Reconsideration does not apply.
 	Do not notify the beneficiary.
 	For inpatient hospital services furnished on or after January 1, 1989, through
December 31, 1989, delete reference to the beneficiary's responsibility for the
coinsurance payment.
Cost Outlier Denial Model Notices:
Condition I: Use for retrospective denials of services or items based on inappropriate
setting or medically unnecessary.
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address

City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Our physicians have reviewed your admission of (date) to (name of provider) for (specify
the procedure/treatment or condition/services). We determined that your admission was
medically necessary and appropriate. However, certain inpatient hospital service(s) and
item(s) you received are denied for Medicare payment.
Prior to reaching this decision, we gave your physician and the hospital an opportunity to
discuss your case.
The specific service/item(s) are as follows:
Specific Service/Item
Date of Service/Item
Charges
After a review of your medical record and any additional information provided, we
determined that (give a complete, fact-specific discussion of why admitted, care received,
reason Medicare is denying, etc.).
Select appropriate limitation of liability paragraph in Exhibit 7-20 under Condition I, II
(cost outlier without a physician component denials based on inappropriate setting or
medically unnecessary), III (cost outlier with a physician component denials based on
medically unnecessary), IV, or V.
Use reconsideration paragraph in Exhibit 7-21 under Condition III.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Condition II: Use for retrospective denial of services or items based on duplicative
billing, or for services not actually furnished or not ordered by the physician.
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:

The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Our physicians have reviewed the above admission of (date) for (specify the
procedure/treatment or condition/services). We have determined that the admission was
medically necessary and appropriate. However, certain inpatient hospital service/item(s)
are denied for Medicare payment.
The specific services/items are as follows:
Specific Service/Item
Date of Service/Item
Charges
After a review of the medical record, we determined that (relate discussion to the specific
reason for denial).
 	Duplicative billing occurred;
 	Services/items not actually furnished; or
 	Services/items were not ordered by the physician.
Medicare will not pay the hospital for the denied services. The beneficiary or his/her
representative is only responsible for payment of any applicable amounts for deductible
and coinsurance related to covered services and any amounts for convenience services
and items normally not covered by Medicare.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Exhibit 7-31 - DRG Changes as a Result of DRG Validation Model
Notice - (Rev. 4, 07-18-03)

Use when retrospective review results in changes that affect the DRG assignment.
 	Opportunity for discussion applies.
 	Re-review applies (Reconsideration does not apply).
 	Do not notify the beneficiary.
DRG Changes as a Result of DRG Validation Model Notice:
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
We are also required to perform Diagnostic Related Group (DRG) validation on all cases
selected for review to ensure that the diagnostic and procedural codes reported by the
provider and resulting in the DRG assignment by the Fiscal Intermediary (FI) match both
the documentation in the medical record and the physician's attestation.
We have reviewed the above admission of (date) for (specify the procedure/treatment
or condition/services). An opportunity to discuss this case was given to the provider and
the physician.
We have determined that the admission was medically necessary and appropriate.
However, based on a review of the medical record and any other information available,
we have changed the following code(s):
 	Hospital submitted code(s) and narrative description

 	QIO coding change(s) and narrative description
This has resulted in a change in the DRG assignment from (__________) to
(__________).
After a review of the medical record and any additional information provided, we
determined that (relate discussion to the specific reason for the change(s)).
If the provider or physician disagrees with our determination, either party may request a
re-review. You must submit your request for a re-review in writing within 60 days from
receipt of this notice directly to us at:
QIO Name
Address
Telephone Number
This information is being reported to the FI for a payment adjustment.
Sincerely,
Medical Director (or designated physician)
Chief Executive Officer, RRA, or ART, as appropriate
ccs:
Physician
FI
Carrier
Exhibit 7-32 - Outpatient/Ambulatory Surgery Denial Model Notices -
(Rev. 4, 07-18-03)
Identify the denial condition, and use the appropriate model notice. This applies to
hospital outpatient settings and ambulatory surgical centers.
Condition I: Use for pre-procedure denials.
 	Opportunity for discussion applies.
 	Limitation of liability (§1879 of the Act) does not apply.
 	Reconsideration applies (See Exhibit 7-21).

Condition II: Use for post-procedure denials (either prepayment or post-payment). Use
this model letter if the procedure performed is non-covered as not medically necessary.
 	Opportunity for discussion applies.
 	Limitation of liability (§1879 of the Act) applies (See Exhibit 7-20).
 	Reconsideration applies (See Exhibit 7-21).
Outpatient/Ambulatory Surgery Denial Model Notices:
Condition I: Use for pre-procedure denials.
YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review outpatient/ambulatory surgical services provided to
Medicare patients in the State of ____________________. By law, we review Medicare
cases to determine if the services meet medically acceptable standards of care, are
medically necessary, and are delivered in the most appropriate setting.
Our physician reviewers have denied Medicare payment for your proposed surgery of
(date) (specify, if known: at (name of provider)) for (specify the surgical procedure).
Prior to reaching this decision, we gave your physician (if known, add: and the provider)
an opportunity to discuss your case.
After a review of your medical record and any additional information provided, we
determined that (Relate discussion to the specific reason(s) for denial).

Medicare will not pay for your proposed surgery if you and your physician decide you
should proceed with the surgery. Therefore, you will be responsible for payment of all
costs for the services you receive.
We are also advising your physician (if known, add: and the provider) of this denial.
You should discuss with your physician other arrangements for any further health care
you may now require.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate care
you may require in the future.
Use reconsideration paragraph in Exhibit 7-21 under Condition I.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Condition II: Use for post-procedure denials (either prepayment or post-payment).

YOUR LETTERHEAD
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review outpatient/ambulatory surgical services provided to
Medicare patients in the State of ____________________. By law, we review Medicare
cases to determine if the services meet medically acceptable standards of care, are
medically necessary, and are delivered in the most appropriate setting.
Our physician reviewers have denied Medicare payment for your surgery of (date) at
(facility name) for (specify the surgical procedure).
Prior to reaching this decision, we gave your physician and the provider an opportunity to
discuss your case.
After a review of your medical record and any additional information provided, we
determined that (Relate discussion to the specific reason(s) for denial).
Select appropriate limitation of liability paragraph in Exhibit 7-20 under condition XI,
XII, or XIII.
Use reconsideration paragraph in Exhibit 7-21 under Condition III.
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.
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.
Sincerely,
Medical Director (or designated physician)
ccs:
Hospital
Physician
FI
Carrier
Exhibit 7-33 - Continued-stay Denial Completed Notice –
(Rev. 4, 07-18-03)
YOUR LETTERHEAD:
Peer System, Inc.
1000 Pine Drive
Baltimore, Maryland 12345
410-555-5555
Date of Notice: August 12, 1990
Name of Patient: John Doe
Address: 200 Cherry Drive
City, State, and Zip Code: Somewhere, MD 00000
Health Insurance Claim (HIC) Number: 000-00-0000 A
Provider Name: Nowhere Hospital
Provider Number: 21-0000
Medical Record Number (if known): 2222
Admission Date: August 1, 1990
Physician Name: John Smith, M.D.
Dear Mr. Doe:
The Peer System, Inc., is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of Maryland. By law, we review Medicare cases to determine if the services
meet medically acceptable standards of care, are medically necessary, and are delivered
in the most appropriate setting.

On August 11, you requested that we review your case because you received, with your
physician's concurrence, a notice of non-coverage from Nowhere Hospital on August 10.
Our physicians have reviewed your admission of August 1 to Nowhere Hospital for
medical and surgical treatment related to gallstones. We have determined that your
admission was medically necessary and appropriate. We agree, however, with your
physician and the hospital that for the reasons specified below, as of August 13, the
services you are currently receiving are not covered by Medicare because they are no
longer medically necessary in the hospital inpatient setting and they can be given safely
and effectively outside of a hospital. Therefore, any inpatient hospital services you
receive beginning after noon, August 13, will not be paid by Medicare.
Prior to reaching this decision, we considered the information provided through telephone
discussions with you on August 12, and any comments received from your physician and
the hospital.
After a review of your medical record and the information provided, we determined that
you no longer require acute care in a hospital setting. The medical records show that you
were admitted on August 1 with complaints of nausea and vomiting of several days
duration. After receiving intravenous fluid replacement, a decision was made to remove
your gall bladder, which was accomplished on August 3. By August 7, you were no
longer taking injections for pain control and were tolerating a regular diet. By August 8,
you were up and about in your room and the hall. On August 9, your physician removed
your stitches and noted that your incision was well healed with no drainage. By August
10, you were receiving only your oral diuretic, the dosage being the same as when you
were admitted. Thus, by the time the hospital gave you the notice of non-coverage, you
required only the administration of an oral medication.
We notified you by telephone on August 12, of our determination that the services you
are receiving are not covered by Medicare and that if you decided to remain in the
hospital after 12 noon on August 13, you would be responsible for payment of all costs of
hospital services you receive after that time except for those covered services which can
be paid for by Medicare Part B. If you decide to leave the hospital prior to 12 Noon on
August 13, you will be responsible only for payment of any applicable amounts for
deductible, coinsurance, and convenience services and items normally not covered by
Medicare.
We are also advising your physician and the hospital of this denial. You should discuss
with your physician other arrangements for any further health care you may now require.
Upon receipt of this notice, you will continue to be responsible for payment for denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future.

If you disagree with our determination and you decide to remain in the hospital, you,
your physician, or hospital may appeal this denial decision, while you are still in the
hospital, by requesting an expedited reconsideration through the hospital by telephoning
or by writing us at:
Peer System, Inc.
1000 Pine Drive
Baltimore, Maryland 12345
410-555-5555
We will complete our expedited reconsideration and send a written notice to you within
three working days.
However, if you don't remain in the hospital after 12 Noon on August 13 or if you remain
in the hospital and do not request an expedited reconsideration, you, your physician, or
hospital are still entitled to a reconsideration. You must submit your request in writing
within 60 days from the receipt of this notice to us at the above address.
You may also make your request to any Social Security Office or Railroad Retirement
Office (if you are a Railroad Retirement beneficiary). Your request will be forwarded to
us.
As a result of our review, we may reaffirm or reverse our prior denial determination. If
we reaffirm the denial determination, you will continue to be responsible for payment of
services furnished as specified above. If we reverse the denial determination, you will be
refunded any amount collected by the hospital except for payment of deductible,
coinsurance, or any convenience services or items normally not covered by Medicare.
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.
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.
Sincerely,

Medical Director
ccs:
Hospital
Physician
FI
Carrier
Exhibit 7-34 - Circumvention of Prospective Payment System (PPS)
Denial Model Notice - (Rev. 4, 07-18-03)
Use for retrospective Part A denials involving PPS and PPS-excluded admissions and
readmissions within the same PPS hospital based on your determination that the services
should have been furnished during the first admission or that the discharge and
subsequent admission were inappropriate. This also applies to discharges from PPS and
PPS-excluded units and subsequent admissions to hospital-based Skilled Nursing Facility
(SNF) and SNF swing beds.
 	Opportunity for discussion applies.
 	Limitation on liability (§1879 of the Act) does not apply.
 	Reconsideration applies (See Exhibit 7-50).
 	Do not notify the beneficiary or physician.
Circumvention of PPS Denial Model Notice:
(Do not notify the beneficiary or physician).
LETTERHEAD OF THE QIO
Date of Notice
Name of Provider
Address of Provider
City, State, and Zip Code
Patient Name
Health Insurance Claim (HIC) Number
Medical Record Number (if known)
First Admission Date
Readmission/Transfer Date
PPS Provider Number
PPS-excluded Provider Number (if known)

Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
Select paragraph A, B, or C below:
A: Services Should Have Been Furnished During the First Admission
Our physicians have reviewed the acute care admission of (date) for (specify the
procedure/treatment or condition/services) and subsequent acute care readmission of
(date) for (specify the procedure/treatment or condition/services). We have determined
that the services furnished were medically necessary and appropriate. However, the
services should have been furnished during the first admission. This action is considered
to be a circumvention of the prospective payment system because each admission
triggered payment for an entire episode of hospital care. Thus, when the hospital
admitted the patient on (date) and again on (date), the hospital received two Medicare
payments instead of one. Therefore, we are denying Medicare payment for the
readmission of (date of 2nd admission).
B: Inappropriate Transfer From a PPS Unit to a PPS-Excluded Unit (This also
applies to similar transfers from a PPS unit to a hospital-based SNF or SNF swing
bed).
Our physicians have reviewed the acute care admission of (date) for (specify the
procedure/treatment or condition/services) and subsequent admission of (date) to the
(select: psychiatric unit, rehabilitation unit, hospital-based Skilled Nursing Facility
(SNF), or SNF swing bed) for (specify the procedure/treatment or condition/services).
We have determined that the patient was admitted to the acute care hospital even though
the medical record shows that the patient only required care in the (select: psychiatric
unit, rehabilitation unit, hospital-based SNF, or SNF swing-bed) and a bed was available
at the time of the acute care admission. This action is considered to be a circumvention
of the prospective payment system because each admission triggered payment for an
entire episode of hospital care. Thus, when the hospital discharged the patient on (date)
and subsequently admitted the patient on (date), the hospital received two Medicare
payments instead of one. Therefore, we are denying Medicare payment for the admission
of (date of 2nd admission).
C: Inappropriate Transfer From a PPS-Excluded Unit to a PPS Unit (This also
applies to similar transfers from a PPS-excluded unit to a hospital-based SNF or
SNF swing bed).

Our physicians have reviewed the admission of (date) to the (select: psychiatric or
rehabilitation) unit for (specify the procedure/treatment or condition/services) and
subsequent admission of (date) to the (select: acute care hospital, hospital-based SNF,
SNF swing bed) for (specify the procedure/treatment or condition/services). We have
determined that the admission to the (select: psychiatric or rehabilitation) unit was
medically necessary and appropriate and that the patient continued to require (select:
psychiatric or rehabilitation) care/services when transferred to the (select: acute care
hospital, hospital-based SNF, or SNF swing-bed). This action is considered to be a
circumvention of the prospective payment system because each admission triggered
payment for an entire episode of hospital care. Thus, when the hospital discharged the
patient on (date) and subsequently admitted the patient on (date), the hospital received
two Medicare payments instead of one. Therefore, we are denying Medicare payment for
the admission of (date of 2nd admission).
This denial determination is made under §1886(f)(2) of the Social Security Act. This
section authorizes a denial of payment under Part A when the Secretary determines,
based on information provided by a QIO that a hospital has taken an action, in order to
circumvent PPS, which results in unnecessary admissions, multiple admissions of the
same individual, or other inappropriate practices.
Prior to reaching this decision, we gave you an opportunity to discuss this case.
After a review of the medical record and any additional information provided, we
determined that (Give a complete, fact-specific discussion related to the reason for denial
under paragraph A, B, or C).
The limitation on liability provision of §1879 of the Act does not apply to Part A denials
issued under §1886(f)(2) of the Act. Therefore, the hospital is liable for the charges of
the denied services. 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. If the beneficiary or his/her representative
has paid the hospital for any of the denied services other than those amounts already
mentioned, the hospital is to refund such payment.
If you disagree with our determination, you may appeal this denial decision by requesting
a reconsideration. You must submit your request in writing within 60 days from receipt
of this notice directly to us at:
QIO Name
Address
Telephone Number
Sincerely,

Medical Director (or designated physician)
ccs:
FI
Carrier
Exhibit 7-40 - Reconsideration Notices -- Hearings Model Paragraphs -
(Rev. 4, 07-18-03)
Condition I: Use in your reconsideration notice when you affirm or partially reverse an
initial denial determination that was based on medical necessity or appropriateness of
setting, or when you affirm your liability determination that the beneficiary knew that the
denied services would not be covered by Medicare.
If you disagree with our reconsideration determination, you may request a formal hearing
before an Administrative Law Judge (ALJ) of the Social Security Administration's
(SSA's) Office of Hearings and Appeals (OHA) under the following conditions:
 	If Medicare has denied payment of $200 or more for services determined to be
either not medically necessary or not provided at an appropriate level of care; or
 	If you do not appeal the denial of Medicare payment on the medical issues listed
above and have been found liable for payment of at least $100 of the denied
services, and you disagree with our liability determination that you knew or
should have known that the denied services were not covered.
If you do not request an ALJ hearing regarding the liability determination, a dissatisfied
provider or practitioner may request an ALJ hearing of that liability determination if they
are liable for services of $100 or more.
If you wish to have an ALJ hearing, you must submit a written request within 60 calendar
days of receipt of this notice. Your written request should include: your name, Medicare
health insurance claim number, where and when services were received, the reason for
your dissatisfaction with our determination, any additional evidence you might wish to
submit, and a copy of this notice.
You may send your written request to:
 	Any social security office;
 	An office of SSA's OHA;
 	An office of the Railroad Retirement Board, if you are eligible; or
 	To us at the following address:
QIO Name

Address (including zip code)
Telephone Number
(A provider or practitioner may only send a written request to us or OHA.)
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.
You have the right to examine the complete medical record (and other pertinent
information) that we relied upon in making our initial denial and reconsideration
determinations. 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 you request a hearing, OHA will notify you of the date and place of the hearing.
Hearings are held close to the address given on requests; therefore, if you request a
hearing, please include the name of the county in which you reside along with your
complete address and zip code. If you wish the hearing to be held somewhere other than
close to your residence, please note that on the hearing request.
Condition II: Attach this paragraph to the provider/physician copy of the beneficiary
reconsideration notice, as appropriate.
According to §1879(d) of the Social Security Act, if the amount in controversy is at least
$100.00, a beneficiary who is dissatisfied with the limitation on liability reconsideration
determination may obtain an administrative hearing conducted by an ALJ of the OHA of
SSA. If the beneficiary chooses not to exercise his or her appeal rights regarding the
limitation on liability determination, you (a dissatisfied provider or a dissatisfied
practitioner) are entitled to an administrative hearing conducted by an ALJ only
addressing the issue of whether you knew or should have known that services would not
be covered.
If you wish to have an ALJ hearing regarding the limitation on liability reconsideration
determination, you must submit a written request within 60 calendar days of receipt of
this notice (unless time is extended for good cause). Your written request should include:
beneficiary's name, Medicare health insurance claim number, where and when services
were provided, the reason for your dissatisfaction with our determination, any additional
evidence you might wish to submit, and a copy of this notice.
You may send your written request to:

 	An office of SSA's OHA; or
 	To us at the following address:
QIO Name
Address (including zip code)
Telephone Number
If you request a hearing, OHA will notify you of the date and place of the hearing.
Hearings are held close to the address given on requests; therefore, if you request a
hearing, please include the name of the county in which you are located along with your
complete address and zip code. If you wish the hearing to be held somewhere other than
close to your place of business, please note that on the hearing request.
Exhibit 7-41 - Reconsideration Model Notice -- Preadmission Denial -
(Rev. 4, 07-18-03)
LETTERHEAD OF THE QIO
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name (if known)
Provider Number (if known)
Medical Record Number (if known)
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
As a result of (insert either "your" or the name of the physician or provider) (date),
request for (insert either "an expedited reconsideration" or "a reconsideration"), we have
conducted a complete review of your medical record to determine whether our original
denial determination was correct.

A QIO physician reviewer denied Medicare payment for your proposed admission of
(date), to (name of provider) for (specify the procedure/treatment or condition/services)
because (use the medical information and rationale contained in the initial denial notice).
When we notified you on (date of denial notice) of this denial determination, you were
advised that if you and your physician decided that you should be admitted to the
hospital, you would be responsible for payment of all costs for the denied services you
received except for those covered services which could be paid for by Medicare Part B.
Prior to our reconsideration of this denial determination, we gave your physician, (name),
and (name of provider) an opportunity to provide additional information, if they wished.
The reconsideration was performed by a board-certified physician reviewer who
specializes in (indicate the specialty of the physician). The physician reviewer, who was
not involved in the original denial determination, performed a thorough re-examination of
all the information contained in your medical record and considered any additional
information provided by your physician and/or the hospital.
The physician reviewer (insert either "reversed" or "upheld") the original denial
determination because (Provide the facts and rationale for upholding/reversing the
original denial determination for all parties. Include the appropriate statutory and
regulatory citations). Therefore, we have determined that Medicare (select either "will"
or "will not") pay for your proposed admission if you and your physician decide that you
should be admitted to the hospital.
NOTE: If you reverse your initial denial determination, insert: "If admitted, you will
only be responsible for payment of any applicable amounts for deductible, coinsurance,
and convenience services and items normally not covered by Medicare."
NOTE: If you uphold your initial denial determination, insert: "If admitted, you will be
responsible for payment of all costs of the denied services you receive except for those
covered services which can be paid for by Medicare Part B."
We are also advising your physician and the hospital of this reconsideration
determination, which affirms our original denial determination. You should discuss with
your physician other arrangements for any further health care you may now require.
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Upon receipt of this notice, you will continue to be responsible for payment of denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future.

NOTE: If you reverse your initial denial determination, insert: "If admitted, you will
only be responsible for payment of any applicable amounts for deductible, coinsurance,
and convenience services and items normally not covered by Medicare."
NOTE: If you uphold your initial denial determination, insert: "If admitted, you will be
responsible for payment of all costs of the denied services you receive except for those
covered services which can be paid for by Medicare Part B."
Use Model Hearings Paragraph Exhibit 7-40, Condition I (and Condition II, if
appropriate).
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Sincerely,
Medical Director (or designated physician)
ccs:
Provider
Physician
FI/ carrier (if original denial/liability determination changes)
Exhibit 7-42 - Reconsideration Model Notice -- Admission Denial –
(Rev. 4, 07-18-03)
LETTERHEAD OF THE QIO
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:

The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
As a result of (insert either "your" or the name of the physician or provider) (date),
request for a reconsideration, we have conducted a complete review of your medical
record to determine whether our original denial determination was correct.
A QIO physician reviewer denied Medicare payment for your admission of (date), to
(name of provider) for (specify the procedure/treatment or condition/services) because
(use medical information and rationale contained in the initial denial notice).
When we notified you on (date of denial notice) of this denial determination, you were
advised that (use the limitation on liability determination and rationale for the
beneficiary, provider, and/or practitioner contained in the initial denial notice).
Prior to our reconsideration of this denial determination, we gave your physician, (name),
and (name of provider) an opportunity to provide additional information, if they wished.
The reconsideration was performed by a board-certified physician reviewer who
specializes in (indicate the specialty of the physician). The physician reviewer, who was
not involved in the original denial determination, performed a thorough re-examination of
all the information contained in your medical record and considered any additional
information provided by your physician and/or the hospital.
The physician reviewer (select either "reversed" or "upheld") the original denial
determination because (Provide the facts and rationale for upholding/reversing the
original denial determination for all parties. Include the appropriate statutory and
regulatory citations). Therefore, we have determined that Medicare (select either "will"
or "will not") pay for your admission.
NOTE: If you reverse your initial denial determination, insert: "You will only be
responsible for payment of any applicable amounts for deductible, coinsurance, and
convenience services and items normally not covered by Medicare."
The physician reviewer also reconsidered the original liability determination that (insert
the liable parties, i.e., "you" and/or the name of the provider and/or physician) knew that
the denied services were not covered by Medicare. The physician reviewer determined
that (Provide the facts and rationale for upholding/reversing the original liability
determination for all parties. Include the appropriate statutory and regulatory citations.
If your liability determination remains unchanged, tailor the liability language to the
limitation on liability information contained in the initial denial notice. If your liability
determination changes, tailor the liability language to the appropriate limitation on
liability condition found in Exhibit 7-1. Include future liability language).

NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Use Model Hearings paragraph Exhibit 7-40, Condition I (and Condition II, if
appropriate).
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Sincerely,
Medical Director (or designated physician)
ccs:
Provider
Physician
FI/carrier (if original denial/liability determination changes)
Exhibit 7-43 - Reconsideration Model Notice -- Continued-stay Denial -
(Rev. 4, 07-18-03)
(Expedited Reconsideration Within Three Working Days)
(Physician Agrees with HINN)
LETTERHEAD OF THE QIO
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in

the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
As a result of (insert either "your" or the name of the physician or provider) (date),
request for an expedited reconsideration, we conducted a complete review of your
medical record to determine whether our original denial determination was correct.
You received, with your physician's concurrence, a notice of non-coverage from (name of
provider) on (date), and requested that we review your hospital stay. A QIO physician
reviewer determined that your admission of (date), to (name of provider) for (specify the
procedure/treatment or condition/services) was medically necessary and appropriate.
However, the physician reviewer agreed with your physician and the hospital that
beginning (date of first non-covered acute care day), you no longer required acute care in
a hospital setting because (use medical information and rationale contained in the initial
denial notice).
On (date of notification), we notified you that we agreed with (name of provider)'s notice
of non-coverage, and issued a denial determination. You were advised that if you
decided to remain in the hospital, beginning (insert date given in denial notice), you
would be responsible for payment of all costs of denied services you received, except for
those covered services which could be paid for by Medicare Part B.
Prior to our reconsideration of this denial determination, we gave your physician, (name),
and (name of provider) an opportunity to provide additional information, if they wished.
The reconsideration was performed by a board-certified physician reviewer who
specializes in (indicate the specialty of the physician). The physician reviewer, who was
not involved in the original denial determination, performed a thorough re-examination of
all the information contained in your medical record and considered any additional
information provided by your physician and/or hospital.
The physician reviewer (select either "reversed" or "upheld") the original denial
determination because (Provide the facts and rationale for upholding/reversing the
original denial determination for all parties. Include the appropriate statutory and
regulatory citations). Therefore, we have determined that Medicare (select either "will
pay the hospital for the inpatient services you are receiving" or "will not pay the hospital
for the inpatient services provided (except for those covered services which can be paid
for by Medicare Part B) beginning (date)").
NOTE: If you reverse your initial denial determination, insert: "You will only be
responsible for payment of any applicable amounts for deductible, coinsurance, and
convenience services and items normally not covered by Medicare."
NOTE: If you uphold your initial denial determination, insert: "Also, the hospital may
send you a bill for services provided to you beginning (date)."

The physician reviewer also reconsidered the original liability determination that (insert
the liable parties, i.e., "you" and/or the name of the provider and/or physician) knew that
the denied services were not covered by Medicare. The physician reviewer determined
that (Provide the facts and rationale for upholding/reversing the original liability
determination for all parties. Include the appropriate statutory and regulatory citations.
If your liability determination remains unchanged, tailor the liability language to the
limitation on liability information contained in the initial denial notice. If your liability
determination changes, tailor the liability language to the appropriate limitation on
liability condition found in Exhibit 7-1).
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
We are also advising your physician and the hospital of this reconsideration
determination, which affirms our original denial determination. You should discuss with
your physician other arrangements for any further health care you may now require.
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Upon receipt of this notice, you will continue to be responsible for payment of denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future.
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Use Model Hearings paragraph Exhibit 7-40, Condition I (and Condition II, if
appropriate).
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Sincerely,
Medical Director (or designated physician)
ccs:
Provider
Physician
FI/carrier (if original denial/liability determination changes)

Exhibit 7-44 - Reconsideration Model Notice -- Procedure Denial –
(Rev. 4, 07-18-03)
LETTERHEAD OF THE QIO
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
As a result of (insert either "your" or the name of the physician or provider) (date),
request for reconsideration, we have conducted a complete review of your medical record
to determine whether our original denial determination was correct.
A QIO physician reviewer determined that your admission of (date), to (name of
provider) for (specify the treatment, condition, or services) was medically necessary and
appropriate. However, the physician reviewer denied Medicare payment for the (name of
procedure) that was performed on (date) because (use the medical information and
rationale contained in the initial denial notice).
When we notified you on (date of denial notice) of this denial determination, you were
advised that (use the limitation on liability determination and rationale for the
beneficiary, provider, and/or practitioner contained in the initial denial notice).
Prior to our reconsideration of this denial determination, we gave your physician, (name),
and (name of provider) an opportunity to provide additional information, if they wished.
The reconsideration was performed by a board-certified physician reviewer who
specializes in (indicate the specialty of the physician). The physician reviewer, who was
not involved in the original denial determination, performed a thorough re-examination of

all the information contained in your medical record and considered any additional
information provided by your physician and/or the hospital.
The physician reviewer (insert either "reversed" or "upheld") the original denial
determination because (Provide the facts and rationale for upholding/reversing the
original denial determination for all parties. Cite the appropriate statutory and regulatory
citations. Give a complete fact-specific discussion of why the patient was admitted, the
care received, and the reason Medicare is denying or paying for the procedure).
Therefore, we have determined that Medicare (select either "will" or "will not") pay for
the (name of procedure) provided on (date), for (amount of dollars). Medicare will pay
for the medically necessary care and services you received on admission to (name of
provider) from (date of admission) to (date of discharge).
NOTE: If you reverse your initial denial determination, insert: "You will only be
responsible for payment of any applicable amounts for deductible, coinsurance, and
convenience services and items not normally covered by Medicare."
The physician reviewer also reconsidered the original liability determination that (insert
the liable parties, i.e., "you" and/or the name of the provider and/or physician) knew that
the denied services were not covered by Medicare. The physician reviewer determined
that (Provide the facts and rationale for upholding/reversing the original liability
determination for all parties. Include the appropriate statutory and regulatory citations.
If your liability determination remains unchanged, tailor the liability language to the
limitation on liability information contained in the initial denial notice. If your liability
determination changes, tailor the liability language to the appropriate limitation on
liability condition found in Exhibit 7-1. Include future liability language).
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Use Model Hearings paragraph Exhibit 7-40, Condition I (and Condition II, if
appropriate).
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Sincerely,
Medical Director (or designated physician)
ccs:
Provider
Physician

FI/carrier (if original denial/liability determination changes)
Exhibit 7-45 - Reconsideration Model Notice -- Day Outlier Denial -
(Rev. 4, 07-18-03)
LETTERHEAD OF THE QIO
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
As a result of (insert either "your" or the name of the physician or provider) (date),
request for reconsideration, we have conducted a complete review of your medical record
to determine whether our original denial determination was correct.
A QIO physician reviewer determined that your admission of (date), to (name of
provider) for (specify the procedure/treatment or condition/services) was medically
necessary and appropriate. However, the physician reviewer denied Medicare payment
for the inpatient hospital services you received (specify denied date(s)) for a total of
(number) day(s) because (use medical information and rationale contained in the initial
denial notice).
When we notified you on (date of denial notice) of this denial determination, you were
advised that (use the limitation on liability determination and rationale for the
beneficiary, provider, and/or practitioner contained in the initial denial notice).
Prior to our reconsideration of this denial determination, we gave your physician, (name),
and (name of provider) an opportunity to provide additional information, if they wished.

The reconsideration was performed by a board-certified physician reviewer who
specializes in (indicate the specialty of the physician). The physician reviewer, who was
not involved in the original denial determination, performed a thorough re-examination of
all the information contained in your medical record and considered any additional
information provided by your physician and/or the hospital.
The physician reviewer (insert either "reversed" or "upheld") the original denial
determination because (Provide the facts and rationale for upholding/reversing the
original denial determination for all parties. Include the appropriate statutory and
regulatory citations). Therefore, we have determined that Medicare (select either "will"
or "will not") pay for the inpatient hospital services you received (specify denied date(s))
for a total of (number) day(s).
NOTE: If you reverse your initial denial determination, insert: "You will only be
responsible for payment of any applicable amounts for deductible, coinsurance, and
convenience services and items normally not covered by Medicare."
The physician reviewer also reconsidered the original liability determination that (insert
the liable parties, i.e., "you" and/or the name of the provider and/or physician) knew that
the denied services were not covered by Medicare. The physician reviewer determined
that (Provide the facts and rationale for upholding/reversing the original liability
determination for all parties. Include the appropriate statutory and regulatory citations.
If your liability determination remains unchanged, tailor the liability language to the
limitation on liability information contained in the initial denial notice. If your liability
determination changes, tailor the liability language to the appropriate limitation on
liability condition found in Exhibit 7-1. Include future liability language).
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Use Model Hearings paragraph Exhibit 7-40, Condition I (and Condition II, if
appropriate).
NOTE: Include the above paragraph only if you uphold your initial denial determination.
Sincerely,
Medical Director (or designated physician)
ccs:
Provider
Physician
FI/carrier (if original denial/liability determination changes)

Exhibit 7-46 - Reconsideration Model Notice -- Cost Outlier Denial -
(Rev. 4, 07-18-03)
LETTERHEAD OF THE QIO
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
As a result of (insert either "your" or the name of the physician or provider) (date),
request for reconsideration, we have conducted a complete review of your medical record
to determine whether our original denial determination was correct.
A QIO physician reviewer determined that your admission of (date), to (name of
provider) for (specify the procedure/treatment or condition/services) was medically
necessary and appropriate. However, the physician reviewer denied Medicare payment
for the inpatient hospital service(s) and/or item(s) that you received as follows:
Specific Service/Item
Date Service/Item
Charges
Payment was denied because (use medical information and rationale contained in the
initial denial notice).
When we notified you on (date of denial notice) of this denial determination, you were
advised that (use the limitation on liability determination and rationale for the
beneficiary, provider, and/or practitioner contained in the initial denial notice).

Prior to our reconsideration of this denial determination, we gave your physician, (name),
and (name of provider) an opportunity to provide additional information, if they wished.
The reconsideration was performed by a board-certified physician reviewer who
specializes in (indicate the specialty of the physician). The physician reviewer, who was
not involved in the original denial determination, performed a thorough re-examination of
all the information contained in your medical record and considered any additional
information provided by your physician and/or hospital.
The physician reviewer (insert either "reversed" or "upheld") the original denial
determination because (Provide the facts and rationale for upholding/reversing the
original denial determination for all parties. Include the appropriate statutory and
regulatory citations). Therefore, we have determined that Medicare (select either "will"
or "will not") pay for the inpatient hospital service(s) and/or item(s) previously specified.
NOTE: If you reverse your initial denial determination, insert: "You will only be
responsible for payment of any applicable amounts for deductible, coinsurance, and
convenience services and items normally not covered by Medicare."
The physician reviewer also reconsidered the original liability determination that (insert
the liable parties, i.e., "you" and/or the name of the provider and/or physician) knew that
the denied services were not covered by Medicare. The physician reviewer determined
that (Provide the facts and rationale for upholding/reversing the original liability
determination for all parties. Include the appropriate statutory and regulatory citations.
If your liability determination remains unchanged, tailor the liability language to the
limitation on liability information contained in the initial denial notice. If your liability
determination changes, tailor the liability language to the appropriate limitation on
liability condition found in Exhibit 7-1. Include future liability language).
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Use Model Hearings paragraph Exhibit 7-40, Condition I (and Condition II, if
appropriate).
NOTE: Include the above paragraph only if you uphold your initial denial determination.
Sincerely,
Medical Director (or designated physician)
ccs:
Provider

Physician
FI/carrier (if original denial/liability determination changes)
Exhibit 7-47 - Re-review Model Notice -- DRG Changes as a Result of
DRG Validation - (Rev. 4, 07-18-03)
(To provider - do not notify the beneficiary)
LETTERHEAD OF THE QIO
Date of Notice
Name of Patient
Address
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Medical Record Number (if known)
Admission Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
We also are required to perform Diagnostic Related Group (DRG) validation on all cases
selected for review to ensure that the diagnostic and procedural codes reported by the
provider and resulting in the DRG assignment by the Fiscal Intermediary (FI) matches
both the documentation in the medical record and the physician's attestation.
As a result of (insert either the name of the provider or physician) (date) request for a re-
review, we have conducted a complete review of the medical record to determine whether
our original DRG assignment determination was correct.
A reviewer determined that the admission of (date), for (specify the procedure/treatment
or condition/services) was medically necessary and appropriate. However, the reviewer
changed the following code(s):
Hospital Submitted Code(s) and Narrative Description
QIO Coding Change(s)

This resulted in a change in the DRG assignment from (_________) to (___________).
The codes were changed because (use the reason for change contained in the DRG
Validation notice).
Prior to our re-review of the DRG assignment, we gave the physician, (name), and you an
opportunity to provide additional information, if you wished.
Based on a thorough re-examination of all the information contained in the medical
record and consideration of any additional information provided by the physician and by
you, the reviewer determined that the change in the DRG assignment (insert either "was"
or "was not") correct because (include a brief statement of the facts of the case and the
rationale used in upholding or reversing the initial DRG change).
Therefore, the final results of the DRG re-review are as follows:
QIO Determined Codes and Narrative Description:
Final Determination: DRG ______________
The Social Security Act does not provide for further appeal of this determination.
NOTE: Include the above paragraph only if you uphold your initial DRG change
determination.
If you have any further questions, please contact ______________.
Sincerely,
Medical Director (or designated physician,
Chief Executive Officer, RRA, or ART, as appropriate)
ccs:
Physician
FI/carrier (if final DRG determination changes)
Exhibit 7-48 - Reconsideration Model Notice -- Outpatient/Ambulatory
Surgery Denial - (Rev. 4, 07-18-03)
Condition I: Use for pre-procedure denials.
LETTERHEAD OF THE QIO

Date of Notice
Name of Patient
Address of Patient
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Facility Name (if known)
Facility Provider Number (if known)
Medical Record Number (if known)
Proposed Surgery Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization authorized by the Medicare
program to review outpatient/ambulatory surgical services provided to Medicare patients
in the State of ____________________. By law, we review Medicare cases to determine
if the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.
As a result of (insert either "your" or the name of the physician or provider) (date),
request for (insert either "an expedited reconsideration" or "a reconsideration"), we have
conducted a complete review of your medical record to determine whether our original
denial determination was correct.
A QIO physician reviewer denied Medicare payment for your proposed surgery of (date),
at (name of provider) for (specify the surgical procedure) because (use the medical
information and rationale contained in the initial denial notice).
When we notified you on (date of denial notice) of this denial determination, you were
advised that if you and your physician decided that you should proceed with the surgery,
you would be responsible for payment of all costs for the denied services you receive
except for those covered services which could be paid for by Medicare Part B.
Prior to our reconsideration of this denial determination, we gave your physician, (name),
and (name of provider) an opportunity to provide additional information, if they wished.
The reconsideration was performed by a board-certified physician reviewer who
specializes in (indicate the specialty of the physician). The physician reviewer, who was
not involved in the original denial determination, performed a thorough re-examination of
all the information contained in your medical record and considered any additional
information provided by your physician and/or the provider.
The physician reviewer (insert either "reversed" or "upheld") the original denial
determination because (Provide the facts and rationale for upholding/reversing the
original denial determination for all parties. Include the appropriate statutory and

regulatory citations). Therefore, we have determined that Medicare (select either "will"
or "will not") pay for your proposed surgery if you and your physician decide to proceed.
NOTE: If you reverse your initial denial determination, insert: "You will only be
responsible for payment of any applicable amounts for deductible, coinsurance, and
convenience services and items normally not covered by Medicare."
NOTE: If you uphold your initial denial determination, insert: "You will be responsible
for payment of all costs of the denied services you receive."
We also are advising your physician and provider of this reconsideration determination,
which affirms our original denial determination. You should discuss with your physician
other arrangements for any further health care you may now require.
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Upon receipt of this notice, you will continue to be responsible for payment of denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate care
you may require in the future.
NOTE: Include the above paragraph only if you uphold your initial denial determination.
Use Model Hearings Paragraph Exhibit 7-40, Condition I (and Condition II, if
appropriate).
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Sincerely,
Medical Director (or designated physician)
ccs:
Provider
Physician
FI/carrier (if original denial/liability determination changes)
Condition II: Use for post-procedure denials (either prepayment or post-payment).
LETTERHEAD OF THE QIO

Date of Notice
Name of Patient
Address of Patient
City, State, and Zip Code
Health Insurance Claim (HIC) Number
Facility Name
Facility Provider Number
Medical Record Number (if known)
Surgery Date
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review outpatient/ambulatory surgical services provided to
Medicare patients in the State of ____________________. By law, we review Medicare
cases to determine if the services meet medically acceptable standards of care, are
medically necessary, and are delivered in the most appropriate setting.
As a result of (insert either "your" or the name of the physician or provider) (date),
request for a reconsideration, we have conducted a complete review of your medical
record to determine whether our original denial determination was correct.
A QIO physician reviewer denied Medicare payment for your surgery of (date), at (name
of provider) for (specify the surgical procedure) because (use the medical information
and rationale contained in the initial denial notice).
When we notified you on (date of denial notice) of this denial determination, you were
advised that (use the limitation on liability determination and rationale for the
beneficiary, provider, and/or practitioner contained in the initial denial notice).
Prior to our reconsideration of this denial determination, we gave your physician, (name),
and (name of provider) an opportunity to provide additional information, if they wished.
The reconsideration was performed by a board-certified physician reviewer who
specializes in (indicate the specialty of the physician). The physician reviewer, who was
not involved in the original denial determination, performed a thorough re-examination of
all the information contained in your medical record and considered any additional
information provided by your physician and/or the provider.
The physician reviewer (select either "reversed" or "upheld") the original denial
determination because (Provide the facts and rationale for upholding/reversing the
original denial determination for all parties. Include the appropriate statutory and
regulatory citations). Therefore, we have determined that Medicare (select either "will"
or "will not") pay for your surgery.

NOTE: If you reverse your initial denial determination, insert: "You will only be
responsible for payment of any applicable amounts for deductible, coinsurance, and
convenience services and items normally not covered by Medicare."
The physician reviewer also reconsidered the original liability determination that (insert
the liable parties, i.e., "you" and/or the name of the provider and/or physician) knew that
the denied services were not covered by Medicare. The physician reviewer determined
that (Provide the facts and rationale for upholding/reversing the original liability
determination for all parties. Include the appropriate statutory and regulatory citations.
If your liability determination remains unchanged, tailor the liability language to the
limitation on liability information contained in the initial denial notice. If your liability
determination changes, tailor the liability language to the appropriate limitation on
liability condition found in Exhibit 7-1. Include future liability language).
NOTE: Include the above paragraph only if you uphold your initial denial determination.
Use Model Hearings paragraph Exhibit 7-40, Condition I (and Condition II, if
appropriate).
NOTE: Include the above paragraph only if you uphold your initial denial determination.
Sincerely,
Medical Director (or designated physician)
ccs:
Provider
Physician
FI/carrier (if original denial/liability determination changes)
Exhibit 7-49 - Reconsideration Completed Notice -- Continued-stay
Denial - (Rev. 4, 07-18-03)
(Expedited Reconsideration Within Three Working Days)
(Physician Agrees with HINN)
YOUR LETTERHEAD:
Peer System, Inc.
1000 Pine Drive
Baltimore, Maryland 12345
410-555-5555

Date of Notice: August 12, 1990
Name of Patient: John Doe
Address: 200 Cherry Drive
City, State, and Zip Code: Somewhere, MD 00000
Health Insurance Claim (HIC) Number: 000-00-0000 A
Provider Name: Nowhere Hospital
Provider Number: 21-0000
Medical Record Number (if known): 2222
Admission Date: August 1, 1990
Physician Name: John Smith, M.D.
Dear Mr. Doe:
The Peer System, Inc., is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of Maryland. By law, we review Medicare cases to determine if the services
meet medically acceptable standards of care, are medically necessary, and are delivered
in the most appropriate setting.
As a result of your August 13, request for an expedited reconsideration, we conducted a
complete review of your medical record to determine whether our original denial
determination was correct.
You received, with your physician's concurrence, a notice of non-coverage from
Nowhere Hospital on August 10, 1990, and requested that we review your hospital stay.
A QIO physician reviewer determined that your admission of August 1, 1990, to
Nowhere Hospital for medical and surgical treatment of gallstones was medically
necessary and appropriate. However, the physician reviewer agreed with your physician
and the hospital that beginning August 10, you no longer required acute care in a hospital
setting since you were receiving only a medication by mouth. That service, which can be
safely provided outside of a hospital, does not constitute a hospital level of care and,
therefore, is not covered by Medicare.
On August 12, we notified you that we agreed with Nowhere Hospital's notice of non-
coverage and issued a denial determination. You were advised that if you decided to
remain in the hospital, beginning 12 noon on August 13, you would be responsible for
payment of all costs of the denied services you received, except for those covered
services which could be paid for by Medicare Part B.
Prior to our reconsideration of this denial determination, we gave your physician, Dr.
Smith, and Nowhere Hospital an opportunity to provide additional information, if they
wished.
The reconsideration was performed by a board-certified physician reviewer who
specializes in abdominal surgery. The physician reviewer, who was not involved in the

original denial determination, performed a thorough re-examination of all the information
contained in your medical record and considered any additional information provided by
your physician and/or hospital.
The physician reviewer upheld the original denial determination because services you
received beginning August 10 could be given safely and effectively outside of a hospital.
The medical records indicate that by that time you were up and about with no assistance,
tolerating regular food, required no medication for pain control, and were taking only an
oral diuretic in a maintenance dosage. Also, your stitches had been removed, and your
incision was well healed and dry. Our authority for denying payment is specified in the
Code of Federal Regulations, 42 CFR 473.14(a)(3). Therefore, we have determined that
Medicare will not pay the hospital for the inpatient services provided (except for those
covered services which can be paid for by Medicare Part B) beginning August 10. Also,
the hospital may send you a bill for services provided to you beginning August 10.
The physician reviewer also reconsidered the original liability determination that you are
responsible for payment of services you received in the hospital after 12 Noon on August
13, because you knew that the services were not covered by Medicare. The physician
reviewer determined that you received adequate notice when you received the August 10
notice of non-coverage from the hospital and our telephone and written notice of August
12. Thus, your liability for the cost of the non-covered services received after 12 Noon
on August 13 cannot be waived. Your liability for payment is specified in §1879 of the
Social Security Act, and in the Code of Federal Regulations, 42 CFR Part 405.
This reconsideration determination notifies you that the services denied are not covered
under Medicare. As you were notified in our August 12 denial notice, beginning 12
Noon on August 13, you became responsible for payment of all costs of services you
receive in the hospital except for those covered services which can be paid for by
Medicare Part B. For hospital services received prior to 12 Noon on August 13, you are
responsible only for payment of any applicable amounts for deductible, coinsurance, and
convenience services and items normally not covered by Medicare.
We are also advising your physician and the hospital of this reconsideration
determination, which affirms our original denial determination. You should discuss with
your physician other arrangements for any further health care you may now require.
Upon receipt of this notice, you will continue to be responsible for payment of denied
services occurring in the future which involve the same or reasonably comparable
conditions. However, Medicare will pay for all medically necessary and appropriate
hospital care you may require in the future.
If you disagree with our reconsideration determination, you may request a formal hearing
before an Administrative Law Judge (ALJ) of the Social Security Administration's
(SSA's) Office of Hearings and Appeals (OHA) under the following conditions:

 	If Medicare has denied payment of $200 or more for services determined to be
either not medically necessary or not provided at an appropriate level of care; or
 	If you do not appeal the denial of Medicare payment on the medical issues listed
above and have been found liable for payment of at least $100 of the denied
services, and you disagree with our liability determination that you knew or
should have known that the denied services were not covered.
If you do not request an ALJ hearing regarding the liability determination, a dissatisfied
provider or practitioner may request an ALJ hearing of that liability determination if they
are liable for services of $100 or more.
If you wish to have an ALJ hearing, you must submit a written request within 60 calendar
days of receipt of this notice. Your written request should include: your name, Medicare
health insurance claim number, where and when services were received, the reason for
your dissatisfaction with our determination, any additional evidence you might wish to
submit, and a copy of this notice.
You may send your written request to:
 	Any social security office;
 	An office of SSA's OHA;
 	An office of the Railroad Retirement Board, if you are eligible; or
 	To us at the following address:
Peer System, Inc.
1000 Pine Drive
Baltimore, Maryland 12345
410-555-5555
(A provider or practitioner may only send a written request to us or OHA.)
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.
You have the right to examine the complete medical record (and other pertinent
information) that we relied upon in making our initial denial and reconsideration
determinations. 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 you request a hearing, OHA will notify you of the date and place of the hearing.
Hearings are held close to the address given on requests; therefore, if you request a
hearing, please include the name of the county in which you reside along with your
complete address and zip code. If you wish the hearing to be held somewhere other than
close to your residence, please note that on the hearing request.
Sincerely,
Medical Director
ccs:
Nowhere Hospital
John Smith, M.D.
Exhibit 7-50 - Reconsideration Model Notice -- Circumvention of
Prospective Payment System (PPS) - (Rev. 4, 07-18-03)
(Do not notify the beneficiary or physician)
LETTERHEAD OF THE QIO
Date of Notice
Name of Provider
Address of Provider
City, State, and Zip Code
Patient Name
Health Insurance Claim (HIC) Number
Medical Record Number (if known)
First Admission Date
Readmission/Transfer Date
PPS Provider Number
PPS-excluded Provider Number (if applicable)
Physician Name
Dear:
The (your name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review inpatient hospital services provided to Medicare patients in
the State of ____________________. By law, we review Medicare cases to determine if
the services meet medically acceptable standards of care, are medically necessary, and
are delivered in the most appropriate setting.

As a result of your (date) request for a reconsideration, we have conducted a complete
review of the medical record to determine whether our original denial determination was
correct.
Select paragraph A, B, or C below:
A: Services Should Have Been Furnished During the First Admission
Our physicians previously reviewed the acute care admission of (date) for (specify the
procedure/treatment or condition/services) and subsequent acute care readmission of
(date) for (specify the procedure/treatment or condition/services). We determined that
the services furnished were medically necessary and appropriate. However, the services
should have been furnished during the first admission. This action was considered to be a
circumvention of the PPS because each admission triggered payment for an entire
episode of hospital care. Thus, when the hospital admitted the patient on (date) and again
on (date), the hospital received two Medicare payments instead of one. Therefore, we
denied Medicare payment for the readmission of (date of 2nd admission).
B: Inappropriate Transfer From a PPS Unit to a PPS-excluded Unit
NOTE: This also applies to similar transfers from a PPS unit to a hospital-based SNF or
SNF swing bed.
Our physicians previously reviewed the acute care admission of (date) for (specify the
procedure/treatment or condition/services) and subsequent admission of (date) to the
(select: psychiatric unit, rehabilitation unit, hospital-based Skilled Nursing Facility
(SNF), or SNF swing bed) for (specify the procedure/treatment or condition/services).
We determined that the patient was admitted to the acute care hospital even though the
medical record shows that the patient only required care in the (select: psychiatric unit,
rehabilitation unit, hospital-based SNF, or SNF swing bed) and a bed was available at the
time of the acute care admission. This action was considered to be a circumvention of
the prospective payment system because each admission triggered payment for an entire
episode of hospital care. Thus, when the hospital discharged the patient on (date), the
hospital received two Medicare payments instead of one. Therefore, we denied Medicare
payment for the admission of (date of 2nd admission).
C: Inappropriate Transfer From a PPS-excluded Unit to a PPS Unit
NOTE: This also applies to similar transfers from a PPS-excluded unit to a hospital-
based SNF or SNF swing bed.
Our physicians previously reviewed the admission of (date) to the (select: psychiatric or
rehabilitation) unit for (specify the procedure/treatment or condition/services) and
subsequent admission of (date) to the (select: acute care hospital, hospital-based SNF, or
SNF swing bed) for (specify the procedure/treatment or condition/services). We

determined that the admission to the (select: psychiatric or rehabilitation) unit was
medically necessary and appropriate and that the patient continued to require (select:
psychiatric or rehabilitation) care/services when transferred to the (select: acute care
hospital, hospital-based SNF, or SNF swing bed). This action was considered to be a
circumvention of the PPS because each admission triggered payment for an entire
episode of hospital care. Thus, when the hospital discharged the patient on (date) and
subsequently admitted the patient on (date), the hospital received two Medicare payments
instead of one. Therefore, we denied Medicare payment for the admission of (date of 2nd
admission).
This denial determination was based on (use the medical information and rationale
contained in the initial denial notice).
Prior to reaching our reconsideration determination, we gave you an opportunity to
provide additional information, if you wished.
The reconsideration was performed by a board-certified physician reviewer who
specializes in (indicate the specialty of the physician). The physician reviewer, who was
not involved in the original denial determination, performed a thorough re-examination of
all the information contained in the medical record and considered any additional
information provided by the hospital.
The physician reviewer (select either "reversed" or "upheld") the original denial
determination because (Provide the facts and rationale for upholding/reversing the
original denial determination for all parties. Include the appropriate statutory and
regulatory citations.) Therefore, we have determined that Medicare (select either "will"
or "will not") pay for the (insert either "readmission" or "admission") of (date of second
admission).
This denial determination is made under §1886(f)(2) of the Social Security Act. This
section authorizes a denial of payment under Part A when the Secretary determines,
based on information provided by a QIO, that a hospital has taken an action, in order to
circumvent PPS, which results in unnecessary admissions, multiple admissions of the
same individual, or other inappropriate practices.
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
The limitation on liability provision of §1879 of the Act does not apply to Part A denials
issued under §1886(f)(2) of the Act. Therefore, the hospital is liable for the charges of
the denied services. 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. If the beneficiary or his/her representative
has paid the hospital for any of the denied services other than those amounts just
mentioned, the hospital is to refund such payment.

NOTE: Include the above paragraph only if you uphold your initial denial determination.
If payment for services is denied due to alleged circumvention of the prospective
payment system, you have a right to obtain a hearing conducted by an Administrative
Law Judge of the Social Security Administration's (SSA's) Office of Hearings and
Appeals (OHA) if the amount in controversy is $100 or more. To do so, submit a written
request within 60 calendar days of receipt of this notice. Your written request should
include: beneficiary's name, Medicare health insurance claim number, where and when
services were provided, the reason for your dissatisfaction with our determination, any
additional evidence you may wish to submit, and a copy of this notice.
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
The request for a hearing may be sent to:
 	An office of SSA's OHA; or
 	To us at the following address:
QIO Name
Address
Telephone Number
NOTE: Include the above paragraph only if you uphold your initial denial determination.
If you request a hearing, OHA will notify you of the date and place of the hearing.
Hearings are held close to the address given on requests; therefore, if you request a
hearing, please include the name of the county in which you are located along with your
complete address and zip code. If you wish the hearing to be held somewhere other than
close to your place of business, please note that on the hearing request.
NOTE: Include the above paragraph only if you uphold your initial denial
determination.
Sincerely,
Medical Director (or designated physician)
ccs:
FI/carrier (if original denial determination changes)
Exhibit 7-60 - Sample Acknowledgment Letter to Beneficiary/
Representative When Request Is Sent to the Hearing Office –

(Rev. 4, 07-18-03)
_________________________
_________________________
_________________________
_________________________
H.I. Claim Number: ____________________
Dear ________________:
This is in reply to your request for a hearing before an Administrative Law Judge. We
have forwarded the file to:
Office of Hearings and Appeals (OHA)
______________________________
______________________________
______________________________
______________________________
______________________________
______________________________
OHA will notify you as to the time and place of the hearing. If you have any further
questions regarding this matter, OHA will be glad to assist you.
If you want help with your appeal of this reconsideration 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.
You have the right to examine the complete medical record (and other pertinent
information) that we relied upon in making our initial denial and reconsideration
determinations. Although the hospital is the official repository of 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 below:
QIO Name
Address (including zip code)
Telephone Number
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.

Sincerely yours,
cc:
File Folder
Exhibit 7-61 - How to Locate the Correct Hearing Office –
(Rev. 4, 07-18-03)
The Administrative Law Judge Hearing Offices (HO) serve particular Social Security
District Offices (DO). Therefore, to locate the correct HO to which you must send the
hearing folder, you need to know the DO that services the beneficiary. If the requestor is
not the beneficiary, use the DO closest to the requestor's address to determine the HO to
which the hearing folder is sent.
Since the SSA DOs serve specific counties within the State, it is also necessary for you to
determine in which county the beneficiary/requestor resides before you can locate the
DO. For these reasons use the following directories:
 	U.S. Postal Service Directory of Post Offices;
 	DHHS/SSA Service Area Directory (SAD); and
 	OHA Field Office Directory.
Using the U.S. Postal Service Directory of Post Offices -- You need this directory to
locate the county in which the beneficiary/requestor resides. Once you determine the
city, State, and zip code on the request for hearing, locate that city under the "State
Listing" in the Postal Service Directory. The county in which that city is located is listed
either next to, or below, the city's name.
Using the DHHS/SSA SAD -- Once you have determined the county where the
beneficiary/requestor resides, you need to know which SSA DO services that county.
This directory is divided into several headings. Use columns marked County, Post
Office, and Servicing Office. The counties are listed alphabetically under each State.
Find the name of the county under the County heading. The name of the city appears
under the Post Office heading. The name of the SSA DO is listed under the Servicing
Office. The city may be broken down further into zip code areas. Therefore, it may be
necessary for you to determine the correct zip code before you can determine the
Servicing Office or SSA DO. At this point, call the DO and request the address of the
specific local HO. Also, request the DO to provide you with addresses of all the HOs in
its area for future use.

The SSA SAD can be retrieved electronically by using the SSA National Bulletin Board
Service (SSANBBS). SSANBBS contains both directory and monthly update SAD files.
Directory SAD files contain the complete directory updated through a specified month.
A directory file can be identified by a "D" in the file name. For example,
SAD_DSEP.EXE would be the complete directory including updates through September
while SAD_DOCT.EXE would be the complete directory including updates through
October. Usually, SSANBBS contains the current and prior month directory files.
Directory files are very large and very time consuming to download.
Monthly update SAD files contain only the changes for that month. They do not contain
the entire directory. A monthly update file can be identified by a "U" in the file name.
For example, SAD_USEP.EXE would be the monthly update for September while
SAD_UOCT.EXE would be the monthly update for October. Usually, SSANBBS
contains the current and prior month update files. Update files are much smaller and
much less time consuming to download.
Bear in mind that the monthly update files contain only the changes for that month.
Therefore, download them consistently or your directory will not be up-to-date. If you
choose not to download the monthly updates, you may want to periodically download the
complete directory.
To access SSANBBS, use any PC communication package such as PROCOMM or
PCTALK that provides for the XMODEM protocol. Then enter the following
information into the dial area of your communication software:
SSANBBS Phone Number: 1-410-965-5780
Baud Rate: 1200/2400
Data Bits: 8
Parity: NONE
Stop Bits: 1
Duplex Mode: Full
Once you have accessed SSANBBS, download the complete directory or monthly update
files by entering the following information:
 	At the Logo screen, hit enter and key in your name and password.
 	At the Main Menu screen, select D (Download Facility).
 	At the File Directories Menu screen, select 40 (Electronic Publications).
 	At the Electronic Publications Menu screen, select the desired SAD file.

 	At the message "Starting to Download Begin Receiving Using XMODEM
Protocol," depress the page down (PROCOMM) key or the key that is appropriate
to begin downloading for your software.
 	Select XMODEM Protocol and download as the file name on the SSANBBS or
change it to suit your needs.
If you experience any problems accessing SSANBBS or downloading SAD files, call the
Help Desk on 1-410-965-6171.
The following example shows you how the above directories are used in locating the HO
to which the hearing folder is sent for a beneficiary residing in Tampa, Florida 33630.
Using the Postal Service Directory, the county in which Tampa is located is
Hillsborough.
Using the SSA Service Area Directory (State Listing), locate Hillsborough under the
County heading. Under the Post Office heading, note that the city of Tampa is broken
out by zip codes. Zip code 33630 is serviced by the Wellswood DO. If the Tampa zip
code did not match any of those listed, use "Tampa Other Zips" and Tampa DO.
Exhibit 7-71 - Potential Quality Concern Model Notice –
(Rev. 4, 07-18-03)
YOUR LETTERHEAD
Date of Notice
Name of Addressee
Address
City, State, and Zip Code
Patient Name
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Date of Admission/Service
Medical Record Number (if known)
Dear:
The (QIO name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review medical services provided to Medicare patients in the State
of ____________________. By law, we review Medicare cases to determine if the
services meet medically acceptable standards of care, are medically necessary, and are
delivered in the most appropriate setting.

Our primary purpose is to identify areas where care can be improved and to feed back
information to physicians and providers. This peer review is intended to be a collegial
interaction with the goal of improving patient care. We appreciate the time and effort
involved in your cooperation with our review activities.
A QIO physician reviewer has initially reviewed the care provided to (name of patient) at
(name of provider) for (specify the procedure, treatment, condition, and/or services).
Based on a careful review of the information contained in the medical record, the
physician reviewer has raised some concerns regarding the care provided.
(Summarize the case findings and concerns from the preliminary decision portion of the
PRAF.)
This is a potential concern only. We recognize that the medical record may not give a
complete clinical picture. Therefore, we are providing you an opportunity to discuss the
concerns we have raised prior to rendering our final determination. Your response can be
in writing or by telephone. We must receive your response within 20 days from the date
of this notice in order for information provided by you to be considered in our final
determination. Please direct your response to:
Name of QIO Contact Person
Address
Telephone Number
If you have any questions concerning this notice or would like to make arrangements to
discuss this case with a QIO physician reviewer, you may also contact (name of QIO
contact person) within 20 days.
We are also notifying (name (See NOTEs below)) of our concerns and offering an
opportunity to discuss the concerns we have raised. While the physician and the
representative for the provider may respond separately to the opportunity for discussion,
we strongly encourage coordination of the responses.
NOTE: If the notice is addressed to the provider, insert the name of the physician(s) also
notified.
NOTE: If the notice is addressed to the physician, insert the name of the provider. Do
not specify other physicians you may be notifying.
If we do not receive your response by (date), a QIO physician reviewer will make a final
determination based on the information contained in the medical record alone.
The information in this notice is confidential and may be re-disclosed only in accordance
with Federal regulations found in 42 CFR 476.107 and 108.
Sincerely,

Medical Director (or designated physician)
(Include title)
Exhibit 7-72 - Confirmed Quality Concern Model Notice –
(Rev. 4, 07-18-03)
YOUR LETTERHEAD
Date of Notice
Name of Addressee
Address
City, State, and Zip Code
Patient Name
Health Insurance Claim (HIC) Number
Provider Name
Provider Number
Date of Admission/Service
Medical Record Number (if known)
Dear:
The (QIO name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review medical services provided to Medicare patients in the State
of ____________________. By law, we review Medicare cases to determine if the
services meet medically acceptable standards of care, are medically necessary, and are
delivered in the most appropriate setting.
Our primary purpose is to identify areas where care can be improved and to feed back
information to physicians and providers. This peer review is intended to be a collegial
interaction with the goal of improving patient care. We appreciate the time and effort
involved in your cooperation with our review activities.
A QIO physician reviewer has completed review of the care provided to (name of patient)
at (name of provider) for (specify the procedure, treatment, condition, and/or services).
Based on a careful review of the information contained in the medical record and any
additional information provided during the opportunity for discussion, the physician
reviewer has reached the following determination.
(Summarize the case findings and concerns, including your preferred course of action,
from the initial/final review decision portion of the PRAF.)

We are entering this information into our database for pattern analysis. On an ongoing
basis we analyze patterns of care involving quality concerns or positive outcomes that
may have significance beyond a single episode. Be assured that if a pattern involving a
quality concern is identified, we will provide both you and (name (See NOTEs below))
ample opportunity to discuss the concern with us.
NOTE: If the notice is addressed to the provider, insert the name of the physician(s).
NOTE: If the notice is addressed to the physician, insert the name of the provider. Do
not specify any other physicians you may also be notifying.
We are also notifying (name (See NOTEs above)) of our final determination. If you or
(name (See NOTEs above)) disagree with our quality of care concern determination,
either party may request a re-review. To request a re-review, you must submit your
request in writing within 30 days from receipt of this notice. Therefore, we must receive
your request by (date). Your written request should include the reason for your
dissatisfaction with our determination and any additional information you might wish to
submit. Send your written request to:
QIO Name
Address
Telephone Number
The information in this notice is confidential and may be re-disclosed only in accordance
with Federal regulations found in 42 CFR 476.107 and 108.
Sincerely,
Medical Director (or designated physician)
(Include title)
Exhibit 7-73 - Re-review Upheld Quality Concern Model Notice –
(Rev. 4, 07-18-03)
YOUR LETTERHEAD
Date of Notice
Name of Addressee
Address
City, State, and Zip Code
Patient Name
Health Insurance Claim (HIC) Number

Provider Name
Provider Number
Date of Admission/Service
Medical Record Number (if known)
Dear:
The (QIO name) is the Quality Improvement Organization (QIO) authorized by the
Medicare program to review medical services provided to Medicare patients in the State
of ____________________. By law, we review Medicare cases to determine if the
services meet medically acceptable standards of care, are medically necessary, and are
delivered in the most appropriate setting.
Our primary purpose is to identify areas where care can be improved and to feed back
information to physicians and providers. This peer review is intended to be a collegial
interaction with the goal of improving patient care. We appreciate the time and effort
involved in your cooperation with our review activities.
As a result of a (date) request for a re-review, we have conducted a complete review of
the care provided to (name of patient) at (name of provider) for (specify the procedure,
treatment, condition, and/or services) to determine whether our original confirmed quality
of care concern determination was correct. This re-review was performed by a QIO
physician reviewer who was not involved in the original quality concern determination.
Based on a thorough re-examination of all the information contained in the medical
record and consideration of any additional information provided by you and the (insert
either "provider" or "physician"), the physician reviewer has reached the following
determination.
Summarize the case findings and concerns, including your preferred course of action,
from the reconsideration/re-review portion of the PRAF (PRAF 3).
We are entering this information into our database for pattern analysis. On an ongoing
basis we analyze patterns of care involving quality concerns or positive outcomes that
may have significance beyond a single episode. Be assured that if a pattern involving a
quality concern is identified, we will provide both you and (name (See NOTEs below))
ample opportunity to discuss the concern with us.
NOTE: If the notice is addressed to the provider, insert the name of the physician(s).
NOTE: If the notice is addressed to the physician, insert the name of the provider. Do
not specify any other physicians you may also be notifying.
The Social Security Act does not provide for further appeal of this determination.
We are also notifying (name (See NOTEs below)) of our re-review determination.

NOTE: If the notice is addressed to the provider, insert the name of the physician(s).
NOTE: If the notice is addressed to the physician, insert the name of the provider. Do
not specify any other physicians you may also be notifying.
The information in this notice is confidential and may be re-disclosed only in accordance
with Federal regulations found in 42 CFR 476.107 and 108.
Sincerely,
Medical Director (or designated physician)
(Include title)
Exhibit 7-74 - Examples of Potential Quality Concern Scenarios –
(Rev. 4, 07-18-03)
The QIO must make a determination as to which physicians will receive preliminary
notices depending on the unique circumstances of each case. Examples of possible
scenarios follow:
Scenario 1:
 	The attending physician admits and follows the patient.
 	The admission is medically necessary.
 	At some point during the hospitalization, a surgeon performs a procedure.
 	There is a question as to the medical necessity of the procedure.
Notices go to:
 	The provider;
 	The attending physician; and
 	The surgeon.
Scenario 2:
 	The attending physician admits and follows the patient.
 	At some point during the hospitalization, a surgeon performs a procedure.
 	The patient was admitted solely for the performance of the procedure.
 	There is a question as to the medical necessity of the procedure.
Notices go to:

 	The provider;
 	The attending physician; and
 	The surgeon.
Scenario 3:
 	The attending physician admits and follows the patient.
 	At some point during the hospitalization, a surgeon performs a procedure.
 	There is a technical error during the procedure with no apparent complications.
Notices go to:
 	The provider; and
 	The surgeon.
Scenario 4:
 	The attending physician admits and follows the patient.
 	At some point during the hospitalization, a surgeon performs a procedure.
 	There is a technical error during the procedure with apparent complications.
Notices go to:
 	The provider; and
 	The surgeon.
Scenario 5:
 	The attending physician admits and follows the patient.
 	At some point during the hospitalization, a surgeon performs a procedure.
 	The patient apparently suffers a cerebral vascular accident (CVA) during the
procedure.
 	An hour's worth of vital signs were apparently not taken during the procedure.
Notices go to:
 	The provider;
 	The surgeon;
 	The anesthesiologist; and
 	The physician who medically cleared the patient for surgery, if the QIO identified
a concern with the medical clearance.
Scenario 6:
 	The attending physician is an internist.

 	During the course of the hospitalization, a cardiologist and a pulmonologist are
also following.
 	The patient experiences an episode of severe respiratory distress.
 	All three physicians are called and respond.
 	The orders to treat the episode are apparently inadequate and are signed by the
internist.
Notices go to:
 	The provider;
 	The attending physician; and
 	The pulmonologist and/or the cardiologist, only if the QIO believes that they can
materially contribute to the resolution of the potential quality concern.
Scenario 7:
 	The attending physician is an internist.
 	During the course of the hospitalization, a cardiologist and a pulmonologist are
also following.
 	The patient experiences an episode of severe respiratory distress.
 	All three physicians are called and respond.
 	The orders to treat the episode are apparently inadequate and are signed by the
pulmonologist.
Notices go to:
 	The provider;
 	The pulmonologist; and
 	The attending physician.
Scenario 8:
 	The attending physician is an internist.
 	During the course of the hospitalization, a cardiologist and a pulmonologist are
also following.
 	The patient experiences an episode of severe respiratory distress.
 	The internist responds.
 	The orders to treat the episode are apparently inadequate and are signed by the
internist.
Notices go to:
 	The provider; and
 	The attending physician.
Scenario 9:

 	The attending physician is an internist.
 	During the course of the hospitalization, a cardiologist and a pulmonologist are
also following.
 	The patient experiences an episode of severe respiratory distress.
 	The pulmonologist responds.
 	The orders to treat the episode are apparently inadequate and are signed by the
pulmonologist.
Notices go to:
 	The provider;
 	The pulmonologist; and
 	The attending physician, if, in the QIO's judgment, he/she can materially
contribute to the resolution of the potential quality concern (e.g., if the attending
physician saw the patient very soon after the episode and failed to countermand
the orders in question).

Transmittals Issued for this Chapter
Rev # 	Issue Date 	Subject 	Impl Date 	CR#
R18QIO 10/10/2014 	Update to Pub. 100-10, Chapters 04 and 07
to Provide Language-Only Changes for
Updating ICD-10
Upon
Implementation
of ICD-10
N/A
R4QIO 	07/18/2003 	Miscellaneous Revisions 	N/A 	N/A
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