FAIR DME Appeals Act

This legislation amends Title XVIII of the Social Security Act to establish a mechanism for awarding legal fees to certain durable medical equipment (DME) suppliers. Specifically, it mandates that Medicare administrative contractors, unified program integrity contractors, and qualified independent contractors pay the reasonable attorney fees and litigation costs of small business DME suppliers. This provision applies when these suppliers successfully appeal an initial payment denial, and an administrative law judge (ALJ) determines the original denial was clearly erroneous, lacked substantial evidence, or failed to follow applicable law or guidance.

The bill specifies that these fees cover all stages of the appeal process up to the hearing before the Office of Medicare Hearings and Appeals, even if the supplier did not prevail at every stage. If multiple contractors were involved in affirming an incorrect denial, they are required to split the costs evenly. Suppliers must apply for these fees within 30 days of a favorable final appeal, and the ALJ's determination on the fee amount is final and not subject to further appeal.

However, the bill outlines specific circumstances under which fees will not be awarded, such as when the initial denial resulted from the supplier's failure to provide required documentation or comply with billing requirements. Importantly, the legislation explicitly states that the Secretary of Health and Human Services will not indemnify these contractors for the legal fees awarded, placing the financial responsibility directly on the contractors to increase accountability for their initial determinations.