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Transcript for audio podcast:
First Level of the Medicare Appeals Process

From the Office of Inspector General of Department of Health and Human Services

[Joyce Greenleaf] I'm Joyce Greenleaf, the Regional Inspector General for the Office of Evaluation and Inspections in Boston. With me is team leader Maria Maddaloni to talk about the evaluation that examines volume, outcomes, and timeliness of first level Medicare appeals. Maria, can you tell us what a first level appeal is?

[Maria Maddaloni] Sure, Joyce. When Medicare denies a claim, a provider or beneficiary can appeal that decision. A first level appeal means that Medicare will take a second look at the decision that was made on a claim.

[Joyce Greenleaf] And who would the provider or beneficiary file their appeal with?

[Maria Maddaloni] They would file their appeals with the Medicare contractor that processed the claim - they're responsible for processing first level appeals. The contractor generally has 60 days to take the second look at the claim. They can decide to pay the full claim, pay part of the claim, or deny it.

[Joyce Greenleaf] If the first level appeal is denied, could a provider or beneficiary appeal again?

[Maria Maddaloni] Yes. There's a total of five levels in the appeals process, all the way up to Federal court. We focused on first level appeals for this report.

[Joyce Greenleaf] So tell us what you found, Maria.

[Maria Maddaloni] Well, in 2012, Medicare processed over 1 billion claims. Out of those claims, 3.7 million were appealed at the first level. In fact, fewer than 3 percent of denied Medicare claims were appealed in 2012.

[Joyce Greenleaf] Can you tell us more about the claims that are appealed?

[Maria Maddaloni] Joyce, about 80 percent of first level appeals were for Medicare Part B services and 20 percent for Part A. But Part A appeals have increased by over 500 percent from 2008 to 2012. Most of the increase was with appeals of inpatient hospital claims.

[Joyce Greenleaf] That's a huge increase. Do you know what's behind it?

[Maria Maddaloni] Yes, we think that the Recovery Audit Contractors are driving a lot of the increase. They're a type of contractor that's responsible for identifying improper Medicare payments.

[Joyce Greenleaf] And overall, how successful were those who appealed Part A claims?

[Maria Maddaloni] Actually, they weren't very successful. In 2012, only 1 out of 4 Part A appeals was decided in favor of the one making the appeal, also called the appellant.

[Joyce Greenleaf] How about the outcomes of the Part B appeals?

[Maria Maddaloni] In 2012, about half of Part B appeals were decided in favor of appellants. This was also the case for appeals of physician services, which make up most of the Part B appeals.

[Joyce Greenleaf] Interesting. Can you tell us any more about the items and services tied to these first level appeals?

[Maria Maddaloni] Unfortunately, we don't have much to report on that. Most of the Recovery Audit Contractor appeals involved short-term inpatient hospital stays. Aside from that, the Centers for Medicare & Medicaid Services, or CMS, has limited data available. However, it's implementing the Medicare Appeals System for first level appeals. This is a database that will have specific information about appeals. It should make it easier for contractors and CMS to track appeals.

[Joyce Greenleaf] Your report also looked at the timeliness of first level appeals processing. Has the increase in the appeals of inpatient hospital claims had any effect on contractors' processing time?

[Maria Maddaloni] Yes it has. Processing timeliness for Part A appeals dropped in 2012. Contractors told us it was because of the increase in Recovery Audit Contractor appeals. Part A appeals typically require the review of an entire medical record, so they're much more time and resource intensive to process than Part B appeals.

[Joyce Greenleaf] Will the Medicare Appeals System help CMS keep tabs on the timeliness of appeals processing?

[Maria Maddaloni] It definitely should. The system will provide CMS with a lot more information to monitor first level appeals. In fact, two of the three recommendations in our report have to do with the Medicare Appeals System. We recommended that CMS use it to oversee contractors and to monitor data quality. Our other recommendation was that CMS encourage information-sharing, like best practices, among its contractors.

[Joyce Greenleaf] And how did CMS respond to your recommendations?

[Maria Maddaloni] CMS agreed with all three recommendations, and it's in the process of implementing them.

[Joyce Greenleaf] I want to thank you, Maria Maddaloni, for talking about your important work on first level Medicare appeals.

[Maria Maddaloni] You're welcome. It was my pleasure.


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