Kusserow’s Corner: First Level Medicare Claims Appeals Update

The HHS Office of Inspector General (OIG) conducted a review of the “redetermination” process undertaken by MACs and analyzed data on claims processed and redeterminations issued in calendar years 2008 – 2012. Their findings included:

  1. Contractors processed 2.9 million redeterminations, involving 3.7 million claims.
  2. There was 33 percent increase in redeterminations.
  3. Although 80 percent of redeterminations involved Part B services, those involving Part A services have risen more rapidly.
  4. Appeals involving RAC overpayments accounted for 39 percent of all appealed Part A claims in 2012.
  5. Contractors decided in favor of Part A appellants at a lower rate than for Part B appellants.
  6. Contractors largely met required timeframes for processing redeterminations and paying appeals decided in favor of appellants, but they fell short of meeting timeframes for transferring case files for second-level appeals.

The OIG concluded its report with recommendation that CMS (1) use the Medicare Appeals System (MAS) to monitor contractor performance, (2) continue to foster information sharing among Medicare contractors, and (3) monitor the quality of redeterminations data in MAS. CMS concurred with all three recommendations. It is noteworthy that the current Medicare claims appeals process is comprised of five levels of appeals:

  • Redeterminations by Medicare Administrative Contractors (MACs)
  • Reconsiderations by Qualified Independent Contractors (QICs)
  • Administrative Hearings held by Administrative Law Judges (ALJs)
  • Review by the Medicare Appeals Council
  • Review by federal District Court

At this time, the computerized MAS only can be used by levels 2 through 4 of appeals process; currently MACs are not able to access the system. Therefore, significant delays in the transfer of case files to QICS for cases appealed to the next level of review were noted. Furthermore, the ongoing delays in the processing of cases at the third and fourth levels of review were not addressed by the OIG. A considerable part of our firm’s work is assisting providers in dealing with these delays in resolving disputes. Currently, while the law imposes a 90 day time frame for the adjudication of appeals by ALJ, the Office of Medicare Hearings and Appeals web site advises that:

Based on our current workload and volume of new requests, we anticipate that assignment of your request for hearing to an Administrative Law Judge may be delayed for up to 28 months.

Therefore, providers and suppliers are not able to receive timely review and decision by an ALJ. Similar delays are being experienced at the Medicare Appeals Council level of review as well. As a result there are great difficulties for providers in following the road map for appeals. At the same time it is critical that they prepare their appeals properly and timely for each step in the process to optimize their chances of a favorable opinion. Any delays or sloppiness on the part of the provider in preparing and managing an appeal can add to delays and increase the chances of a negative decision. More information and articles on this subject is available at www.compliance.com.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2013 Strategic Management Services, LLC. Published with permission.