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Department of Health and Human Services
Medicare Appeals Council
Vascular Diagnostic Center and Vascular Testing Center

Supplementary Medicare Insurance Benefits  

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(Docket Number)



William A. Sarraille, Esq.
Arent Fox Kintner Plotkin & Kahn, PLLC
1050 Connecticut Avenue, N.W.
Washington, DC 20036-5339

Dear Mr. Sarraille:

Re: Reimbursement for bilateral duplex scans of the upper extremity arteries provided to Medicare beneficiary E. A. and others (see list) by Vascular Diagnostic Center and Vascular Testing Center from April 1, 1998 through August 31, 2000

The Medicare Appeals Council has considered the request for review of the Administrative Law Judge's (ALJ's) decision dated October 26, 2001.

The regulations provide that the Medicare Appeals Council will grant a request for review where: (1) there appears to be an abuse of discretion by the ALJ; (2) there is an error of law; (3) the ALJ's action, findings, or conclusions are not supported by substantial evidence; or (4) there is a broad policy or procedural issue that may affect the general public interest. The regulations also provide that if new and material evidence is submitted with the request for review, the entire record will be evaluated and review will be granted where the Council finds that the ALJ's action, findings, or conclusion is contrary to the weight of the evidence currently of record. See 20 C.F.R. � 404.970, incorporated by reference in 42 C.F.R. � 405.856.

From April 1998 through August 2000, the provider performed cerebrovascular evaluations on various Medicare beneficiaries. These included extra-cranial artery scans (including the carotid and vertebral arteries) claimed under CPT codes 93875, 93880, 93886, and bilateral limited upper arterial duplex scans (of the subclavian artery) claimed under CPT codes 93931 and 93931-26. The claims were submitted electronically by the provider with the Physicians' Current Procedural Terminology (CPT) code (1) identifying the procedure billed and the International Classification of Diseases, 9th Revision (ICD-9) codes providing the indications for the procedure.

The record includes evidence of Medicare carrier policy guidelines concerning payment for the types of non-invasive vascular diagnostic studies at issue in this matter (Master File at pages 278 to 319). These Local Medical Review Policies (LMRPs) consist of Medicare Medical Policy Bulletin M-14C Non-Invasive Vascular Diagnostic Studies (effective 11/1/95 to 10/26/97), and Medicare Medical Policy Bulletins M-39 and M-39A Non-invasive Peripheral Arterial Studies (effective 10/26/97 through 2/31/00) [hereinafter referred to as "LMRP --39" collectively].

At each level of review prior to the ALJ hearing, the claims for reimbursement under CPT codes 93931 and 93931-26 were denied because none of the ICD-9 codes used satisfied the criteria set forth in LMRP M--39 for payment of the billed procedures. Specifically, LMRP M-39 authorizes coverage for certain procedures when certain eligible ICD-9 codes are identified. If one of the listed ICD-9 codes has not been referenced, the procedure is not automatically covered, and the provider is then required to submit medical evidence establishing that the test in question is medically reasonable and necessary. Because none of the ICD-9 codes identified on the electronic claim forms established medical necessity pursuant to LMRP M--39, and no additional medical documentation was provided, the claims for Medicare reimbursement of CPT codes 93931 and 93931-26 were denied.

At the hearing before the ALJ the provider argued that the ICD-9 codes which identify signs, symptoms and conditions listed as an indication for scans of the carotid and vertebral arteries also provide indicia of the same medical necessity for a subclavian scan, and should be included in LMRP M--39 for Medicare reimbursement. The provider admitted that it had unsuccessfully asked the Medicare Carrier Advisory Committee (CAC) to so revise the LMRP.

The ALJ concluded that without medical evidence in addition to the ICD-9 codes input into the electronic claim forms, she had no basis to determine if the individual claims for coverage of subclavian scans satisfied the "medically necessary" requirement of LMRP M-39. In its post-hearing brief, the provider again requested that it be allowed to establish that the tests in question were medically reasonable and necessary by submitting a statistically valid sample of the medical evidence in question. The ALJ rejected the provider's request to use statistical sampling because she found, among other things, that it represented an attempt to avoid the provider's duties under section 1833(e) of the Social Security Act, 42 U.S.C. � 1395l(e), to furnish information to substantiate that it is entitled to the payment it seeks.

The provider filed a timely request for review before the Medicare Appeals Council. The sole argument raised by the provider is that the ALJ's denial of its request to perform a statistically valid sampling of the denied claims was an abuse of discretion and reversible error. Although the provider asserts that it was never asked to submit, nor did it refuse to provide, additional documentation regarding medical necessity, it also states that providing documentation on each claim is "prohibitively time-intensive and costly," and that it "simply cannot justify [spending the] funds necessary to produce records on all of the outstanding claims." See Provider Position Paper at 4-5.

As the appellant correctly points out, the Medicare Appeals Council has, in the past, approved of the use of pre-payment statistical sampling at the ALJ hearing level as a technique of adjudication. See In re 768 Beneficiaries (March 15, 1999). In a prior decision, we decided that pre-payment statistical sampling may be appropriate in cases where an appellant explicitly agrees to statistical sampling, and where the sampling methodology employed is valid and protects the interests of both the appellant and the Medicare Trust Fund. We emphasized in that decision, however, that we do not endorse the automatic use of statistical sampling each time there are large numbers of claims to be adjudicated. We noted that like in the post-payment context, statistical sampling is generally appropriate only where one is adjudicating the interests of providers or suppliers (rather than beneficiaries), where there are a large number of claims, where the resources involved in individual claims adjudication would outweigh the benefits of individual claims adjudication, and where coverage of the items and services at issue is suitable for determination through sampling.

Although we have previously found that the use of pre-payment statistical sampling is permissible, we have never suggested that an ALJ can be compelled to allow this method in any case where the provider requests its use. Instead, the use of statistical sampling in the pre-payment context is a tool that can be utilized, when appropriate, in situations where all interested parties and the ALJ agree to its use. It is within the ALJ's sound discretion to decide whether the use of a pre-payment statistical sampling is an appropriate tool to use in each specific case. The ALJ discussed at length why she concluded that statistical sampling was not appropriate in this case. We conclude that the ALJ's decision to reject the use of pre-payment statistical sampling does not constitute an error of law or an abuse of discretion. Accordingly, there is no basis under the above regulations for granting the request for review. The request is denied and the ALJ's decision stands as the final decision of the Secretary.

If you desire court review of the ALJ's decision and the amount in controversy is $1000 or more, you may commence a civil action by filing a complaint in the United States District Court for the judicial district in which you reside or have your principal place of business. See � 1869(b) of the Social Security Act, 42 U.S.C. � 1395ff(b). The complaint must be filed within sixty days after the date this letter is received. It will be presumed that this letter is received within five days after the date shown above unless a reasonable showing to the contrary is made.

If you cannot file your complaint within sixty days, you may ask the Medicare Appeals Council to extend the deadline for filing a civil action. The Council will only extend the time if you can provide a good reason for not meeting the deadline. Your reason must be set forth clearly in your request.

If a civil action is commenced, the complaint should name the Secretary of Health and Human Services as the defendant and should include the HIC number and the docket number shown at the top of this notice. The Secretary must be served by sending a copy of the summons and complaint by registered or certified mail to the General Counsel, Department of Health and Human Services, 200 Independence Avenue, S.W., Washington, D.C. 20201. In addition, you must serve the United States Attorney for the district in which you file your complaint and the Attorney General of the United States. See rules 4(c) and (i) of the Federal Rules of Civil Procedure and 45 C.F.R. � 4.1.

Sincerely yours,

Bruce P. Gipe

Administrative Appeals Judge


Bruce P. Gipe
Administrative Appeals Judge

Clausen J. Krzywicki
Administrative Appeals Judge


1. The Health Care Procedure Coding System (HCPCS) is the alpha-numeric coding system developed by the Centers for Medicare and Medicaid Services (CMS) for processing, screening, identifying and paying Medicare claims based on the established fees. The HCPCS, in turn, is based upon the CPT.