Medicare pre-service organization determinations

The Centers for Medicare and Medicaid Services (CMS) rules require all Part C (Medicare Advantage) plans - NOT providers - give a specific written notice to members if a service or item isn't covered. The process for getting this written notice of non-coverage is called a pre-service organization determination (PSOD).

This differs from the rule for fee-for-service Medicare ("Original Medicare") patients, which allows you, the provider, to give written notice. The Part C rule can be found in the Medicare Managed Care Manual, Section 160, Chapter 4, Benefits and Beneficiary Protections. It applies to all Part C Medicare Advantage plans.

Whether or not the member requests a pre-service organization determination (PSOD), the member can't be held financially responsible for a non-covered service unless there's a clear exclusion in the EOC or Priority Health issues a Notice of Denial of Medicare Coverage.

Discuss non-coverage with the Medicare Advantage plan member

When an item or service is not specifically excluded from Medicare coverage by the Medicare Advantage plan Evidence of Coverage (EOC) policy document, but you believe it won't be covered by the member's plan:

1. Advise the member:

  • This is a Part C member right; that is, the member has the right to know if something is or isn't covered.
  • CMS wants to be sure Part C plan members know whether they will incur any additional costs other than their plan cost share.
  • Priority Health will review the member's medical information and CMS rules/regulations to determine coverage and notify both the member and you of our decision.

2. Offer to obtain a PSOD.

3. If the member refuses, document the refusal in the medical record. Explain to the member that he or she will have to pay 100% of the cost of any medical services that Medicare doesn't cover.

Requesting a pre-service organization determination (PSOD)

If you or the member wants to obtain a pre-service organization determination (PSOD):

Speed of decisions:

Priority Health has, under CMS rules, 14 calendar days from the time of the receipt of a request to make a standard decision and notify the member and provider.

Extensions: Priority Health may extend this time frame for up to an additional 14 calendar days if we have not received the information necessary to make a decision. Priority Health will issue a letter whenever an extension is being made.

Notification of denial:

When Priority Health completes the organization determination process and finds that the item or service is not covered, we send a Notice of Denial of Medicare Coverage (CMS-10003) to the member within three days, informing them that the service is not covered and what their appeal rights may be. You will receive a copy as well.

For more information about standard organization determinations see Chapter 13, Medicare Managed Care Manual.

Requesting an expedited decision

You may request a fast or expedited organization determination decision if you believe waiting for a decision under the standard time frames could place your patient's life, health, or ability to regain maximum function in serious jeopardy. Requests for expedited organization determinations require submission of medical records at time of the request for a fast decision.

For more information about expedited organization determinations see Chapter 13, Medicare Managed Care Manual.

Speed of expedited decisions:

Priority Health has 72 hours from time of receipt of the request to make a decision. The member must be notified orally as well as receive a written notification within 72 hours.

Denied requests for expedited decisions

Priority Health will automatically transfer the request to the standard time frame and make the decision in 14 calendar days. The 14-day period begins when the request for the expedited determination is received.

We notify the member of the denial verbally and receives a letter within 3 calendar days of the denial. We also notify providers within these time frames.

Member receives a Notice of Denial of Medicare Coverage

Advise the member he/she has the right to appeal this denial and offer to assist.

If the member refuses your offer to appeal:

  1. Tell the member he/she may be responsible for 100% of the cost of the service. Under Part C Medicare, it's not necessary to have the member sign a financial liability form.
  2. Explain that you'll send a claim to Priority Health and if the claim is denied, the member can appeal at that time.
  3. Document the discussion. No form is necessary.
  4. Bill with a GA modifier to keep the claim from going to provider liability.

Remember: you may not balance bill the member until we make a post-service payment decision.

Appealing a PSOD decision

Normally, the right of appeal for a denial of PSOD under Part C rules belongs solely to the member. See the member process for appealing a denial.

However, CMS grants contracted providers the ability to appeal a denial on behalf of the member in two situations:

  1. Standard pre-service reconsiderations or appeals: A physician who is providing treatment to a member may, upon providing notice to the member, request a standard reconsideration or appeal on the member's behalf without submitting proof that the physician is the member's personal representative.
    OR
  2. Expedited reconsiderations: A contracted provider may appeal, on the member's behalf, a post-service denial for anything other than a dispute about the amount paid or billing denials. Provider must provide proof that he/she has been appointed the member's representative such as the Appointment of Representative CMS-1696 form. For payment or billing denials, contracted providers should follow the provider appeal process. For complete information on who may appeal see Chapter 13, Medicare Managed Care Manual.