8.3 Coverage Determinations, Exceptions & Appeals

AHIP Medicare Certification Exam

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1 Introduction

1.1 About the AHIP Medicare Certification Exam 1.2 How to Use This Study Guide

2 Chapter 2: Medicare Program Fundamentals

2.1 What Medicare Is: Program Structure & How Parts A–D Fit Together 2.2 Medicare Part A — Hospital Insurance 2.3 Medicare Part B — Medical Insurance 2.4 Medicare Eligibility Rules (Age 65, Disability, ESRD, ALS)

3 Chapter 3: Medicare Enrollment Periods

3.1 Initial Enrollment Period (IEP) 3.2 Annual Enrollment Period (AEP): October 15 – December 7 3.3 Medicare Advantage Open Enrollment Period (MA OEP): January 1 – March 31 3.4 Special Enrollment Periods (SEPs) & Qualifying Life Events 3.5 Late Enrollment Penalties (Part A, Part B, Part D)

4 Chapter 4: Medigap & Coordination of Coverage

4.1 Medigap (Medicare Supplement) Basics & Guaranteed Issue Rights 4.2 Dual Eligibility & Medicare Savings Programs 4.3 How Original Medicare, MA, Part D & Medigap Interact

5 Chapter 5: Medicare Advantage Plan Types

5.1 Medicare Advantage (Part C) Overview: How MA Differs from Original Medicare 5.2 HMO & HMO-POS Plans 5.3 PPO Plans 5.4 PFFS Plans (Private Fee-for-Service) 5.5 MSA Plans (Medicare Medical Savings Accounts) 5.6 Cost Plans & Employer Group Waiver Plans (EGWPs)

6 Chapter 6: Special Needs Plans & MA Plan Design

6.1 Special Needs Plans (SNPs) Overview 6.2 D-SNP — Dual-Eligible Special Needs Plans 6.3 C-SNP & I-SNP — Chronic Condition & Institutional Special Needs Plans 6.4 MA Benefits, MOOP & Supplemental Benefits 6.5 MA Star Ratings & Plan Quality

7 Chapter 7: Part D Structure & the 2026 Redesign

7.1 Part D Overview & Eligibility 7.2 Formularies & Drug Tiers 7.3 The 2026 Part D Benefit Redesign ($2,100 OOP Cap, $615 Max Deductible, Catastrophic Phase) 7.4 Medicare Prescription Payment Plan (Drug-Cost Smoothing)

8 Chapter 8: Part D Costs, Assistance & Appeals

8.1 Low-Income Subsidy (LIS) / Extra Help 8.2 Part D Late Enrollment Penalty & Creditable Coverage 8.3 Coverage Determinations, Exceptions & Appeals

9 Chapter 9: CMS Marketing Rules & Scope of Appointment

9.1 CMS Medicare Communications & Marketing Guidelines (MCMG) Overview 9.2 Scope of Appointment (SOA): the 48-Hour Rule & Exceptions 9.3 Permitted vs. Prohibited Marketing & Sales Activities 9.4 Marketing Events vs. Educational Events

10 Chapter 10: Enrollment & Disclosure Requirements

10.1 The Pre-Enrollment Checklist (PEC) 10.2 Enrollment Procedures & Application Requirements 10.3 Call Recording & Third-Party Marketing Organization (TPMO) Disclaimers 10.4 Agent & Broker Compensation Rules

11 Chapter 11: Marketing Conduct & Oversight

11.1 Cross-Selling Restrictions & Nominal Gift Value Rules 11.2 Marketing to Vulnerable Populations & Non-Discrimination in Sales 11.3 Website, Social Media & Advertising Compliance 11.4 Complaint Tracking Module (CTM) & Agent Oversight

12 Chapter 12: Understanding Fraud, Waste & Abuse

12.1 Defining Fraud, Waste & Abuse (and the Difference Between Them) 12.2 The False Claims Act 12.3 The Anti-Kickback Statute

13 Chapter 13: Compliance Laws & Screening

13.1 The Stark Law (Physician Self-Referral) 13.2 HIPAA Privacy & Security Basics 13.3 The OIG Exclusion List & Sanctioned-Provider Screening

14 Chapter 14: Reporting, Compliance Programs & Consequences

14.1 Detecting & Reporting FWA 14.2 Compliance Program Requirements (Seven Core Elements) & Non-Discrimination Training 14.3 Consequences & Corrective Action Plans

8.3 Coverage Determinations, Exceptions & Appeals

Key Takeaways Explain This Topic AI

A coverage determination is the plan's initial decision on a drug claim; standard decisions are due within 72 hours, expedited decisions within 24 hours.

Formulary and tiering exception requests require the prescribing physician's supporting statement before the plan can decide.

The five Part D appeal levels are: redetermination (plan), reconsideration (Independent Review Entity), ALJ hearing (OMHA), Medicare Appeals Council review, and federal judicial review.

2026 amount-in-controversy thresholds are $200 to reach an ALJ hearing (Level 3) and $1,960 to reach federal court (Level 5) — no dollar threshold applies at Levels 2 or 4.

Only the beneficiary, the prescribing physician, or a formally appointed representative (CMS Form 1696) may file a coverage determination, exception, or appeal — agents refer clients to plan member services rather than filing on their behalf.

Last updated: July 2026

Why Coverage Determinations and Appeals Matter on the Exam

Module 3 tests more than plan mechanics — it tests whether an agent understands a beneficiary's due-process rights when a drug claim is denied, and just as importantly, where the agent's role ends. AHIP exam questions on this topic typically present a denial scenario and ask which appeal level or timeframe applies, or ask who is legally allowed to file the request. Getting the sequence of the five appeal levels backward, or confusing standard with expedited timeframes, is the single most common wrong answer pattern here.

The Starting Point: Coverage Determinations and Exceptions

A coverage determination is the first decision a Part D plan makes about a beneficiary's drug benefits — whether a specific drug is covered, whether a prior authorization requirement is met, what tier a drug is billed at, or whether an exception should be granted. Every appeal in the process traces back to an initial coverage determination.

Two special types of coverage determination requests are exceptions :

Formulary exception — a request that the plan cover a drug that is not on its formulary at all.

Tiering exception — a request that a formulary drug be covered at a lower-cost tier than the plan normally assigns it.

Exception requests require the prescribing physician to submit a supporting statement explaining why the formulary alternatives would not be as effective or would cause adverse effects. Once the plan receives that statement, it must decide within the same timeframes as any other coverage determination.

Standard vs. Expedited Timeframes

• Request Type Standard Decision Expedited Decision
• Coverage determination 72 hours 24 hours
• Exception request (after receiving physician's supporting statement) 72 hours 24 hours
• Redetermination (Level 1) 7 calendar days 72 hours
• Reconsideration by IRE (Level 2) 7 calendar days (14 days for payment-only requests) 72 hours

Expedited review applies whenever waiting for the standard timeframe could seriously jeopardize the beneficiary's life, health, or ability to regain maximum function — the same "health, life, or function at risk" standard used across all Medicare appeal levels.

The Five Levels of Appeal

• Level Name Decision-Maker Filing Deadline AIC Threshold (2026)
• 1 Redetermination The Part D plan sponsor itself 65 days from the denial notice None
• 2 Reconsideration Independent Review Entity (IRE), a CMS contractor 65 days from the Level 1 decision None

3 ALJ Hearing Administrative Law Judge, Office of Medicare Hearings and Appeals (OMHA) 60 days from the Level 2 decision $200

• 4 Medicare Appeals Council review Departmental Appeals Board 60 days from the ALJ decision None
• 5 Judicial review U.S. federal district court 60 days from the Council decision $1,960

Note the pattern the exam likes to test: the plan itself only gets one bite at the apple (Level 1). From Level 2 onward, every decision-maker is independent of the plan — first a CMS contractor (the IRE), then the federal court system. Also note that an amount-in-controversy (AIC) dollar threshold is required to advance to Level 3 and Level 5, but not to reach Level 2 or Level 4 — a detail exam writers frequently flip.

Who Can File

A coverage determination, exception, or appeal may be requested by:

• The beneficiary directly
• The beneficiary's prescribing physician (for coverage determinations and exceptions specifically)

An appointed representative — someone the beneficiary formally designates using CMS Form 1696 (Appointment of Representative), which is required before anyone other than the beneficiary or prescriber (a family member, for instance) can file or receive information on the beneficiary's behalf

Agents are not automatically authorized to file appeals for clients. If a client asks an agent for help, the agent's correct, compliant role is to explain the process and direct the client to the plan's member services number or website — not to submit the appeal as though acting as a representative without the proper CMS-1696 authorization on file.

Worked Scenario

Mr. Chen's pharmacy tells him his cholesterol medication needs prior authorization, and his Part D plan denies the initial coverage determination. His doctor believes waiting the standard 72 hours could put Mr. Chen's health at serious risk, so the doctor requests an expedited decision — Mr. Chen gets an answer within 24 hours. If the plan still denies it, Mr. Chen (or his doctor) has 65 days to request a redetermination (Level 1) directly with the plan. If the plan upholds its own denial again, the next stop is the independent IRE (Level 2) — not back to the plan, and not straight to a judge.

Key Exam Traps

Level 1 (redetermination) is decided by the plan itself ; only Level 2 and beyond involve an entity independent of the plan.

An AIC dollar threshold gates Level 3 (ALJ) and Level 5 (federal court) — it does not gate Level 2 (IRE) or Level 4 (Appeals Council).

Exception requests cannot proceed without the prescriber's supporting statement — a beneficiary cannot request a formulary or tiering exception on their own without physician documentation.