BALTIMORE--CMS has released an interim rule on dramatic changes to the Medicare claims appeals process.

The agency reform aims to reduce average timeframes for fee-for-service Medicare claims appeals from 1,000 days to 300 days. Under the rule, a new entity for first-level appeals, called Qualified Independent Contractors, will begin handling DME supplier appeals, or "reconsiderations," by Jan. 1 next year. The QICs will include review panels of medical professionals who will reconsider all cases involving medical necessity issues.

The government will also transfer Administrative Law Judges from the Social Security Administration to HHS within the coming months, a move that has caused some controversy among providers. ALJs, who handle second-level appeals, maintain impartiality because they work for the SSA, observers say, and moving them under the Health and Human Services umbrella could create a conflict of interest. CMS responded by saying the first-level appeals to the QICs, handled by independent contractors, should help alleviate concerns over fairness during claims appeals.

Those QICs, according to the agency, will offer "routine considerations ... of all medical necessity issues. As a result, we believe these new procedures will lead, over time, to significant reductions in the need to pursue appeals at the later stages of the appeals system, such as ALJs and [Medicare Appeals Council] reviews." The MAC represents the third level of the appeals process.

CMS is accepting comments on the interim rule until May 9. To view the rule and to make comments, visit the CMS Web site at www.cms.hhs.gov/appeals.