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 
hospitals 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 
beneficiarys liability for payment under 1869 of the Act) if you disagree with 
the hospitals 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 beneficiarys 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 
hospitals 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 
beneficiarys liability for payment under 1869 of the Act) if you disagree with 
the hospitals 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). 
 
  For procedure denials, specify either that the patient requires the 
o
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). 
 
  For deemed admission denials, continued-stay denials, day outlier denials, 
o
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). 
 
  For continued-stay denials (related to HINNs) involving "deemed" 
o
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). 
 
  For cost outlier denials, specify the dates, charges, and specific 
o
services/items that will not be approved as being medically necessary or 
appropriate (See Exhibit 7-30). 
 
  For day outlier denials, distinguish between those days that were not 
o
medically necessary and those where the beneficiary could have safely and 
effectively received the services on an outpatient basis. 
 
  For changes to DRG coding information that affect the DRG assignment 
o
(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. 
    For billing errors, explain that the error precludes you from completing 
o
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). 
 
  For circumvention of PPS denials, specify that you are denying the second 
o
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). 
 
  For denials based on circumvention of PPS, explain that the limitation on 
o
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). 
 
  If the beneficiary or his/her representative is found liable, specify the date 
o
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. 
 
  If the provider is found liable, specify the dates of liability (if applicable) 
o
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). 
 
  For denials based on a beneficiary's or his/her representative's request for 
o
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). 
 
  For denials involving review of a HINN, do not approve payment for 
o
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). 
 
  For denials based on concurrent review not involving a HINN, you may 
o
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). 
 
  For denials involving claims for services billed on an assigned basis 
o
(whether furnished by Medicare participating or nonparticipating 
physicians), make your liability determination in accordance with the 
provisions of 1879 of the Act. 
 
  For denials involving services billed on an unassigned basis (by 
o
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): 
 
  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 
o
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): 
 
  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 
o
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: 
 
  The places that the beneficiary or his/her representative may file a 
o
reconsideration (i.e., Social Security Administration (SSA) Office, 
Railroad Retirement Office, if applicable, or at your office); 
 
  The time requirements to file a request; and 
o
 
  The possible outcomes of your review as a result of a request for 
o
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: 
 
  "If you want help with your appeal of this denial determination, you can 
o
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: 
 
  "You have the right to examine the complete medical record (and other 
o
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  Upon  N/A 
to Provide Language-Only Changes for  Implementation 
Updating ICD-10  of ICD-10 
R4QIO  07/18/2003  Miscellaneous Revisions  N/A  N/A 
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