PRRB mediation pilot program expedites payment dispute resolution - Provider Reimbursement Review Board

Healthcare Financial Management, March, 1999 by Thomas H. Brock

To resolve an increasing number of appeals of Medicare payment disallowances, the Provider Reimbursement Review Board (PRRB) has established a pilot mediation program. Under the pilot, a provider can have the payment dispute mediated just after the appeal is filed, instead of the several years Part A providers now must wait to receive a hearing before the PRRB. This procedure offers the opportunity for a quick resolution of an outstanding payment dispute.

The PRRB is the administrative panel in the Department of Health and Human Services that resolves Medicare payment disputes between providers and their intermediaries. A provider that disputes a disallowance must file an appeal with the PRRB within 180 days after the intermediary issues the notice of program reimbursement (NPR). After the appeal is filed, the provider and the intermediary present their positions to the PRRB, either at a live hearing or by submitting documents supporting their positions.

Unfortunately, due to a growing number of payment disputes, providers have had to wait an average of two to three years before a hearing could be scheduled. Further, according to the PRRB, 90 to 95 percent of all cases are settled just before the hearing is scheduled.

Cognizant of the delays in scheduling hearings and the likelihood of settlements, the PRRB established the pilot program for mediating outstanding payment disputes. Officially, the pilot program is available to providers disputing NPRs issued by intermediaries in California and Texas. Nonetheless, the PRRB will consider dispute resolution requests involving intermediaries in other states.

Also, although the notice indicates that a provider may request mediation only for an appeal filed after January 1, 1998, the PRRB may grant a request for mediation in any case pending before the PRRB if the position papers have not yet been filed.

If a provider makes a request for mediation, the provider and intermediary must submit a "list of issues," including any additional information that is relevant to the dispute. Mediators from the Departmental Appeals Board of the Department of Health and Human Services, along with PRRB staff members, then conduct the mediation.

The principal advantage of the mediation process is that it may expedite the resolution of issues. Furthermore, even if the parties are unable to resolve the dispute through mediation, it is unlikely that the mediation proceedings will significantly delay the scheduling of a hearing before the PRRB. Therefore, providers that have appeals pending, especially in cases in which the dollar amount at issue is significant, should seriously consider this option.

This opportunity may be particularly valuable for skilled nursing facilities, most of which are now being paid under the Medicare prospective payment system as a result of provisions of the Balanced Budget Act of 1997. Payments to skilled nursing facilities will be based, in part, on their allowable costs in 1995. If a nursing facility prevails on an appeal to the PRRB challenging any 1995 disallowance, it also should be entitled to increased payment during the first few years under the prospective payment system. Therefore, nursing facilities should carefully evaluate this new opportunity for promptly resolving outstanding Medicare payment disputes.

Thomas H. Brock, JD, is an attorney, Proskauer Rose LLP, Washington, D.C.