Medicare Administrative Contractors (MACs) review and process over a billion claims on behalf of the Centers for Medicare & Medicaid Services (CMS) for millions of Medicare beneficiaries. Precise and effective processing of claims is an important part of ensuring integrity within the Medicare program. If a beneficiary or provider disagrees with a coverage or payment determination made by a MAC or other Medicare contractor (e.g. Recovery Audit Contractor (RAC), Zone Program Integrity Contractor (ZPIC), or Unified Program Integrity Contractor (UPIC)), they have the ability to challenge the decision and appeal. Federal law (i.e. The Social Security Act) establishes five levels (actually four administrative levels and judicial review) to the Medicare appeals process.
Redetermination - First Level
At the first level, the MAC gives the initial coverage or payment decision a second look or “redetermination.” Beneficiaries and providers have 120 days from the date they receive the initial denial or decision to file a request for redetermination with the MAC. For a redetermination, there is no minimum amount in controversy (i.e. the amount at stake) to appeal. The MAC has 60 days to issue a redetermination decision from the date it receives an appeal.
Reconsideration - Second Level
The next level involves a review by a Qualified Independent Contractor (QIC) called a “reconsideration.” Beneficiaries and providers dissatisfied with a MAC redetermination have 180 days from the date they receive the redetermination decision to file a request for reconsideration. Like the redetermination level of appeal, a minimum amount in controversy is not required, and the QIC has 60 days to complete the review. In the event the QIC is unable to complete the reconsideration process within 60 days, the beneficiary or provider will be informed of the delay and be given the option to escalate the appeal or in other words, skip this level and go to the third level of appeal.
ALJ Hearing – Third Level
If a party disagrees with the results of a QIC reconsideration, they can seek a hearing before an Administrative Law Judge (ALJ) with the Office of Medicare Hearings and Appeals (OMHA) within the U.S. Department of Health and Human Services (HHS). Once a QIC decision is received, the dissatisfied party has 60 days to file a request for ALJ hearing with OMHA. OMHA can provide different types of reviews. A party can request a hearing before an ALJ, or a party can also request an on-the-record (OTR) decision in the alternative (i.e. based only on the written record received). Unlike the redetermination and reconsideration stages of appeal, a minimum amount in controversy must be met for this level of appeal. The amount varies each year as it is based on a formula set by statute. Upon filing a request for ALJ hearing, OMHA has 90 days to issue a decision. However, this almost never occurs. OMHA currently has a substantial appeal backlog that it is working to eliminate. In the event a decision is not issued in 90 days, an appellant may escalate to the Medicare Appeals Council (Council) at the HHS Departmental Appeals Board (DAB), the fourth level of appeal.
Review by the Medicare Appeals Council – Fourth Level
The Council reviews ALJ decisions and operates under the DAB, independent from CMS and OMHA. This is the final administrative review stage for an appeal. Dissatisfied beneficiaries and providers have 60 days from the receipt of an ALJ decision to file a request for Council review. Similar to the ALJ level, the Council has 90 days to issue a decision. In the event a decision is not issued within that time frame, an appellant may escalate the appeal to a Federal district court. The Council faces an overwhelming backlog of appeals comparable to OMHA.
Judicial Review – Fifth Level
The final option for a dissatisfied appellant is judicial review in a U.S. District Court. However, a higher minimum amount in controversy will be required. As with ALJ review, the amount is based on a formula set by statute and varies. Once a Council decision is received, an appellant has 60 days to file a complaint in Federal court.
What is the Medicare Appeals Backlog?
As discussed in this post, an overwhelming appeals backlog has hit the third and fourth levels of appeal. In short, the combination of a growing beneficiary population, increased integrity contractor activity, and an expansion of workload with little to no increase in funding for OMHA and the Council, have contributed to the creation and growth of the backlog. In 2014, the American Hospital Association filed a lawsuit against HHS asking a Federal court to compel OMHA to issue its decisions within the mandated 90-day time period. As a result, the Federal court ordered OMHA to reduce the backlog at certain intervals by specific dates.
If you have any questions regarding the Medicare appeals process, please do not hesitate to contact attorney Matthew M. Fischer (matt@fischerlawpa.com). Matthew specializes in health law related issues and is a former Assistant General Counsel at the FBI and Senior Attorney Advisor at the U.S. Department of Health and Human Services.