Recovery audit contractor (RAC)-related first-level appeals or redeterminations accounted for 39 percent of all appealed first-level Part A claims in 2012, but 80 percent of all redeterminations were for Part B claims, according to an October 2013 Office of Inspector General (OIG) report. Overall, contractors processed 2.9 million redeterminations involving 3.7 million claims in 2012, a 33 percent increase over 2008. Another notable item in the report, “The First Level of the Medicare Appeals Process, 2008-2012: Volume, Outcomes, and Timeliness (OEI-01-12-00150),” is that the number of claims processed increased by only 3 percent while the number of redetermination requests increased by 33 percent. This could be attributed to an overall increase in claims denials and audits by the Centers for Medicare and Medicaid Services (CMS) contractors like RACs, Zone Program Integrity Contractors, and the Comprehensive Error Rate Testing program. CMS maintains the Medicare Appeals System, which is supposed to support the first four levels of the appeals system but does not currently track redeterminations. Favorable Redeterminations and Time Frames It is important to note that appellate favorable decisions in redeterminations decreased in Part A claims from 50 percent in 2008 to 24 percent in 2012, while Part B favorable decisions […]
Recovery audit contractor (RAC)-related first-level appeals or redeterminations accounted for 39 percent of all appealed first-level Part A claims in 2012, but 80 percent of all redeterminations were for Part B claims, according to an October 2013 Office of Inspector General (OIG) report.
Overall, contractors processed 2.9 million redeterminations involving 3.7 million claims in 2012, a 33 percent increase over 2008. Another notable item in the report, “The First Level of the Medicare Appeals Process, 2008-2012: Volume, Outcomes, and Timeliness (OEI-01-12-00150),” is that the number of claims processed increased by only 3 percent while the number of redetermination requests increased by 33 percent. This could be attributed to an overall increase in claims denials and audits by the Centers for Medicare and Medicaid Services (CMS) contractors like RACs, Zone Program Integrity Contractors, and the Comprehensive Error Rate Testing program. CMS maintains the Medicare Appeals System, which is supposed to support the first four levels of the appeals system but does not currently track redeterminations.
Favorable Redeterminations and Time Frames
It is important to note that appellate favorable decisions in redeterminations decreased in Part A claims from 50 percent in 2008 to 24 percent in 2012, while Part B favorable decisions maintained about a 50 percent rate with the exception of durable medical equipment redeterminations, which changed from 51 percent to 38 percent during the same period.
The OIG said contractors were able to meet required time frames for completing redeterminations but did not meet required time frames for transferring files to the second level of appeals. The report indicated that this was a result of the increased unfavorable redetermination decisions.
It is important for compliance officers to pay attention to these reports because of the increased scrutiny of claims submitted by providers and the increased activities of Medicare subcontractor audit programs. Understanding the appeals process helps compliance officers make better decisions about what to appeal and how long the process will take from start to finish. This report indicates that carefully structured appeals and redetermination requests have a pretty good rate of success and provide important information the laboratory can use to avoid claims denials in the future.
Takeaway: Claims denials and the resulting appeals are on the increase, and providers who understand the appeals process will likely have a higher success rate than those who do not.
