Government

Medicare claims appeals could slow down

The plan to move all of the process to HHS is too vague and raises serious concerns, the GAO says.

By David Glendinning — Posted Nov. 8, 2004

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Washington -- Doctors have complained for years that the process by which they can appeal Medicare claims decisions is poorly coordinated and slow. Now the Government Accountability Office is saying that a move aimed at fixing some of these problems actually could make things worse.

Last year's Medicare reform law mandates that the portion of the appeals process handled by the Social Security Administration be switched to the Dept. of Health and Human Services. But an October GAO report says plans for this transfer aren't adequate, and delays could be on the way.

That worries some experts in the medical community. "The system works less than optimally as it currently exists," said Paul Speidell, a government affairs representative for the Medical Group Management Assn. "Anything that slows things down further, including a tripped-up transition process, would be a negative."

In fiscal year 2003, Medicare denied about 136 million claims, which is about 13% of all claims submitted. More than 5 million of those decisions were appealed by beneficiaries, physicians or others.

When the federal government denies a physician's fee-for-service claim or accuses a doctor of receiving overpayments, he or she has the opportunity to take the matter through up to four levels of appeal, starting with the claims administration contractor and ending with the Medicare Appeals Council. The third level of adjudication is handled by the Social Security Administration's Office of Hearings and Appeals.

This is the level of appeals that is about to be moved to HHS, which already handles the other parts of the process. Cases spend an average of 14 months being resolved at this stage of the process and an additional 21 months at the Medicare Appeals Council if they make it that far, according to the GAO.

Appellants who have exhausted the entire appeals process can take their cases to federal court if they remain unhappy with the final determination, but most don't go that far. In fiscal year 2003, only about 122,000 appeals proceeded even to the Social Security level.

Lawmakers began talking about transferring the entire process to HHS when the Social Security Administration became a separate agency in the mid-1990s, but the mandate was not finalized until Congress' vote last year. Under the statute, newly hired HHS administrative law judges must take over responsibility from their SSA counterparts by October 2005.

But while both agencies have submitted a plan for the transfer, the GAO report says that the document's lack of specificity or contingency arrangements could compromise service for the people who lodge appeals.

For instance, the Medicare law specifies that the plan address 13 distinct elements of the transfer, but the oversight agency finds that 11 areas of the strategy contain insufficient amounts of detail and that five fail to meet the full requirements of the statute. Important questions about the new judges' workload, cost projections for processing appeals and methods for safeguarding the judges' independence remain unanswered.

Moreover, despite HHS' assertion that it will begin taking some of the appeals off SSA's hands starting in July 2005, neither agency has produced a contingency plan in the event that they cannot meet the October deadline, the report says.

"We found that HHS' and SSA's plan is too vague to serve as a blueprint for the transfer's implementation," the GAO states. "The lack of detail and the fact that some aspects of the plan have not yet been finalized raise serious concerns as to whether HHS and SSA have considered the breadth of challenges inherent in the transfer."

Any glitches could prove problematic for the already troubled system of recourse, said Speidell of the MGMA, which runs a health care consulting service that guides physicians through the appeals process.

Neither the MGMA nor the American Medical Association has taken an official position on the GAO report. The AMA long has supported additional due process rights for physicians encountering Medicare denials and overpayment charges. The reform act included provisions pushed by the Association, including expedited access to federal courts in cases in which HHS oversight does not apply and extended repayment options for doctors who would face a hardship by reimbursing Medicare immediately for overcharges.

Assertions of progress

Once more, the study has put HHS and SSA on the defensive about Medicare appeals, which were the subject of a September 2003 GAO report that assails the lack of coordination between the agencies, as well as the extraordinary time required for doctors and beneficiaries to navigate the system.

Responding to the latest offering from the oversight agency, HHS officials assert in a comment letter that they are on track to complete the overhaul on time. The department also says it has identified a mechanism, which it declines to specify, by which Social Security administrative law judges can continue to hear Medicare appeals if the deadline passes without a complete transfer.

But the officials say contingency plans for several of the congressionally mandated transfer elements are not necessary. Requirements that the department draft regulations governing the appeals process, consider binding precedential authority for Medicare Appeals Council decisions, ensure the independence of judges and establish performance standards for the judges do not require a backup, they explain.

The government already has taken more steps to initiate the move. Within days of the GAO report's release, the Centers for Medicare & Medicaid Services announced that it had awarded contracts to eight qualified independent contractors that will take over the second level of appeals for Medicare claims.

Each contractor will request the specific type of appeal that it will handle, as well as the area of the country in which it will operate. CMS anticipates that the contractors will help expedite the process by issuing decisions within 60 days of receiving cases on their docket.

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ADDITIONAL INFORMATION

Appealing changes

Physicians can challenge denied fee-for-service claims or overpayment charges by using the four-tiered Medicare appeals process, which is in line for changes by October 2005.

Current appeals process

First level: Centers for Medicare & Medicaid Services claims administration contractors review appeals without holding hearings with the appellants.

Second level: CMS claims administration contractors review appeals of their initial decisions and can hold hearings with the appellants.

Third level: The Social Security Administration's Office of Hearing and Appeals adjudicates cases. Administrative law judges hold hearings on Medicare appeals, in addition to handling their Social Security workload.

Fourth level: The Medicare Appeals Council bases its final decisions on reviews of the judges' reports. Appellants who dispute the findings can take their cases to federal court.

Future appeals process

First level: No change

Second level: CMS-qualified independent contractors review appeals of the initial decisions without holding hearings with the appellants.

Third level: Dept. of Health and Human Services administrative law judges hold hearings on cases.

Fourth level: No change

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External links

"Incomplete plan to transfer appeals workload from SSA to HHS threatens service to appellants," Government Accountability Office, October, in pdf (link)

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