CMS has a longstanding claims appeal system in Part B, where the claim denial (or other problem) can be appealed first to the MAC itself, then to an independent review body called a QIC (there are two, one for the eastern and one for the western US), and finally to an Administrative Law Judge or ALJ.
The Medicare Modernization Act of 2003 and the Medicare Benefits Improvment and Protection Act (BIPA) of 2000 both affected this process. Accordingly, Medicare conducted rulemaking in 2005 and 2009. For details see 74 Fed Reg 65296-65338, December 9, 2009. (We always celebrate December 9 in my house as Medicare Appeals Regulation Day.) See here. Regulations at 42 CFR 405.900 ff (here).
The ALJ, under this subpart, can review an initial determination of a MAC. An initial determination (which is appealable) finds if an item is covered or otherwise reimbursable AND "determines any amounts payable." (405.921). There is a lengthier list or what is NOT an initial determination, at 405.926.
These are "any determination for which CMS has sole responsibility" including if an entity meets conditions of participation, the coinsurance amount prescribed by regulation, and "any issue regarding the computation of the payment amount of program reimbursement of general applicability for which CMS or a carrier has sole responsibility under Part B such as the establishment of a fee schedule set forth under Part 414 of this chapter or an inherent reasonableness adjustment under 405.502(g) or any issue regarding the cost report settlement process under Part A.It seems clear enough that whether an entity meets conditions of participation is not part of the determination of a particular claim in question. Nor is the (annual) cost report settlement of a hospital part of a particular claim determination. It is pretty clear the ALJ cannot review and revise a national fee schedule; e.g. if an office visit pays $114.56 in St. Louis, the ALJ cannot review that price.
Can the ALJ review a carrier set price, for example, for an unlisted code for a one-time surgery not on a fee schedule? This would involve "any issue regarding the computation of the payment amount," so it seems excluded at that point in the rule. But the settling of a single claim unlisted code price is not "reimbursement of general applicability...such as the establishment of a fee schedule under Part 414." And a local payment determination is certainly an active decision of the MAC, like a coverage decision is, and the coverage decision is appealable specific to the claim in question.
During rulemaking, in response to a question, CMS staff wrote that:
Section 1848(i)(1) of the Act expressly prohibits administrative and judicial review of the components that comprise the Medicare physician fee schedule. Thus, in situations where payment amounts are determined in accordance with statutorily mandated methodologies (such as the physician fee schedule), adjudicators are required to follow such methodologies when making a finding regarding a payment amount. Therefore, we believe that the regulations at Sec. Sec. 405.920, 405.924, and 405.926 clearly provide that the payment amount of a specific, individual claim is considered an initial determination and also appropriately convey the distinction between a direct challenge to the Medicare payment methodology and an appeal that raises questions regarding a determination of a payment amount for a particular claim.
Emphasis added; text here. Since "the determination of any amount payable" on a claim is by definition a core part of what is appealable (405.921), that would be contradictory and nothing would be appealable if both a fee schedule price and a local price were both not appealable.
I think the simplest resolution is that a fee schedule reference price is not appealable, while the choice of which particular fee schedule reference price applies to a particular medical service is appealable. (The surgeon may argue it is the code for complex surgery $200 and the MAC may think it is the code for simple surgery $100. That MAC choice was part of the initial determination, of the reimbursement, and is appealable).
And a carrier set local unlisted code price should be appealable because it is not what is clearly excluded by CMS's examples, it is not a fee set by a statutorily mandated methodology and it is not "a program reimbursement of general applicability." Said otherwise, if CMS had wanted to say "locally set prices are not appealable" they had the chance to say so.
But there may be other ways to interpret the text, and CMS could have given a few examples of what is in and out to reduce any uncertainty.
