Physicians soon will bring all Medicare appeals to HHS

Washington -- Physicians who decide to fight Medicare when they receive claims denials or overpayment charges may find it harder to get the government's attention.

The Dept. of Health and Human Services has started to take control of one key portion of the appeals process that had been the Social Security Administration's responsibility. By placing all four levels of appeals under HHS's bailiwick, federal officials say they will improve the government's response to people who have problems with their Medicare claims.

But government watchdogs say the move might cause more problems than it actually solves. The Government Accountability Office in a recent report identified several significant areas of concern with the HHS transition plan. Even if the department is able to finish taking the reins from Social Security by an Oct. 1 deadline, people challenging Medicare could discover that they have a harder time making their case to the government.

Hearing availability is a major point of contention for the GAO. Before the transition began, Medicare participants who took their denied claims appeals up to the third level of review were entitled to an in-person hearing before an administrative law judge at one of 141 offices the Social Security Administration maintained. Once HHS takes full control, only four offices will be available for hearings.

HHS has said it would make up for the difference by conducting hearings using videoconferencing technology and allowing appellants to make their cases from a remote location. But that alternative might be inadequate for some people, said GAO Health Care Director Leslie G. Aronovitz.

"For example, appellants may be intimidated by the unfamiliar technology or may be concerned that a lack of personal contact with the [administrative law judge] may put them at a disadvantage," she said.

In addition, HHS has been slow to hire the judges who will be expected to administer the third level of appeal, the GAO report notes. Less than a month before the department started the transition, officials had not yet filled dozens of open judgeship slots.

Senate Finance Committee leaders requested the latest investigation, as well as an October 2004 GAO report that lodged some of the same concerns about the transition process. Assertions that HHS has not done much to address the problems in the months that elapsed prompted renewed calls for federal officials to step up their efforts to get the program up to speed.

"This new report says that many of the same shortcomings described last fall still exist and threaten the entire appeals process," Senate Finance Chair Charles Grassley (R, Iowa) said in a statement. "We need to stay on top of the transfer process to make sure the current failures by [HHS] do not continue."

More appeals to come?

Few physicians, other Medicare participants or Medicare beneficiaries currently take their claims appeals to the level where they would face a newly minted HHS judge. Last fiscal year, more than 5 million of the 158 million denied claims were appealed, but only 113,000 claims made it to the third level of review. The remainder received a reversal at a lower level or gave up their appeals.

But all of that could change soon. Medicare is launching a massive new drug benefit in 2006, and any appeals of denied Part D claims will have to follow the same process as all the others, Grassley noted. An increase in the number of appeals could result in a greater number of cases making it to the third level.

Still, HHS says its overhaul will produce a more efficient course of action for those who decide to challenge government decisions on Medicare claims. Acting HHS Inspector General Daniel R. Levinson said some of the changes that the department is undertaking, such as the enhanced use of videoconferencing technology, will especially benefit the roughly 90% of appellants who are physicians or other program participants. Many of those appellants have the necessary videoconferencing resources or can obtain legal counsel that can provide them.

This technology "is prevalent not only in the legal realm, but also in the health care arena and other areas where spanning geographic distance to meet the needs of customers ... is critical and time-sensitive," he said.