Medicare First Level Appeals Grew By 33 Percent Between 2008 and 2012

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By James Swann  

Oct. 3 --The number of first level Medicare claims appeals, also known as redeterminations, grew by 33 percent between 2008 and 2012, according to a report from the Department of Health and Human Services Office of Inspector General released Oct. 3.

The report, “The First Level of the Medicare Appeals Process, 2008-2012: Volume, Outcomes, and Timeliness” (OEI-01-12-00150), said Medicare contractors processed 2.9 million redeterminations in 2012, involving 3.6 million claims, compared with 2.2 million redeterminations in 2008, involving 2.8 million claims.

During the same time frame, the total number of Medicare claims processed by contractors grew by 3 percent, from 1.18 billion in 2008 to 1.23 billion in 2012.

Redeterminations are the first out of five levels in the Medicare appeals process, and a single redetermination can often involve multiple claims.

Beneficiaries and providers must file a request for redetermination with their Medicare Administrative Contractor (MAC) within 120 days of receiving notice of a claim determination. The MAC “generally has 60 days to make the redetermination and provide written notice of its decision to the appellant,” the OIG report said.

Part A Versus Part B

While Medicare Part B claims accounted for the majority of claims that were submitted for redetermination during the 2008 to 2012 period, Medicare Part A claims submitted for redetermination grew at a much faster pace.

For example, Part B claims that were appealed during the time frame grew by 18 percent, from 2.6 million to 3 million. In contrast, Part A claims that were appealed grew by 148 percent, from 260,000 to 653,000.

Inpatient Part A claims that were submitted for appeal had an even faster growth rate, increasing by 523 percent between 2008 and 2012, from 46,000 to 284,000.

MACs told the OIG that the increase in Part A redeterminations was partly due to a higher level of appeals of claims that had been denied by Recovery Auditor Contractors (RACs).

“From 2010 to 2012, appealed Part A RAC claims increased from 13,605 to 254,898, while non-RAC Part A claims increased from 279,546 to 398,214,” the OIG report said.

MACs also told the OIG that Part A claims redeterminations take more time than Part B redeterminations, as they “involve the review of an entire medical record, which must be conducted by a nurse or other clinical staff member and may take much longer to process than those that do not need medical review.”

Appeal Outcomes

The report found that the percentage of Part A redeterminations that were decided in favor of beneficiaries or providers shrank from 50 percent in 2008 to 24 percent in 2012.

The percentage of favorable Part A redeterminations associated with a RAC denial had an even steeper decline, dropping from 83 percent in 2009 to 11 percent in 2012 (the RAC program was fully implemented in 2009).

As for Part B redeterminations, 65 percent were favorable to beneficiaries and providers in 2008, a figure that dropped to 51 percent in 2012, the report said.

Completion Rates

For the most part, the OIG said MACs processed claims redeterminations in a timely manner.

The median contractor completion rate, meaning the percentage of redeterminations that were processed within 60 days of submission (or 74 days if additional information was submitted after the original submission), was 98 percent for Part A in 2008 but dropped to 89 percent in 2012.

“The increased demand on contractors' medical review staff could explain contractors' difficulty in meeting processing timelines for Part A redeterminations,” the report said.

The median completion rate for Part B redeterminations was 99 percent in 2008 and 100 percent in 2012.

However, the OIG said MACs could improve on their timeliness in transferring unfavorable Part A redeterminations to the next level of the Medicare appeals process, which involves reconsideration by a Qualified Independent Contractor (QIC).

Once a QIC receives an appeals request, it submits a request for the redetermination case file from the responsible MAC, which must send the file within seven days.

In 2012, 79 percent of redetermination case files were transferred to QICs within five days.

“In the previous 3 years, contractors had transferred close to 90 percent of case within 5 days,” the report said.

OIG Recommendations

The OIG recommended that the Centers for Medicare & Medicaid Services:

• take advantage of the Medicare Appeals System (MAS) to assess how contractors are handling redeterminations. Currently, the CMS has no system to track redeterminations but expects to integrate redeterminations into the MAS this fall;

• increase collaboration and communication between contractors regarding redetermination best practices; and

• implement a process to assess the accuracy and quality of redetermination information once it is integrated into the MAS.


The CMS agreed with all of the OIG's recommendations and said four MACs will begin processing redeterminations through the MAS this fall.

“The MAS will provide CMS with real-time data and standardized reports to allow enhanced monitoring and tracking of MAC performance,” the CMS said in response to the report.

The CMS said it was working to increase information sharing between contractors. As for ensuring the accuracy of data with the MAS, the CMS said it would “explore adding MAS data metrics to MAC Quality Assurance Surveillance Plans and Award Fee Plans to evaluate and monitor MAC compliance.”


To contact the reporter on this story: James Swann in Washington at

To contact the editor responsible for this story: Ward Pimley at

The OIG report is at

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