OIG: First-Level Medicare Appeals Up 33% From 2008 to 2012

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Contractors processed 2.9 million redeterminations involving 3.7 million claims for Medicare Parts A and B in 2012, a 33 percent increase compared with 2008, according to a report from the HHS Office of Inspector General.

The study was the OIG's first examination of Medicare Part A and B redeterminations — the first level of the appeals process for Medicare claims. The OIG surveyed 18 contractors and interviewed five of them to learn about processing redeterminations, which may involve multiple claims and service types.

The number of Medicare redeterminations increased much more rapidly than the number of overall claims processed, which went up by just 3 percent between 2008 and 2012, according to the report. Most redeterminations — 2.3 million — involved Part B in 2012, while less than 600,000 concerned Part A services. However, Part A redetermination requests went up by 136 percent from 2008 to 2012, while Part B requests only increased 20 percent.

The skyrocketing number of Part A redeterminations was driven by a 703 percent rise in appealed Part A home health claims, according to the report. Additionally, Part A inpatient hospital claim appeals increased 523 percent from 2008 to 2012.

The OIG found the Medicare recovery audit contractor program — which CMS fully implemented in 2009 — caused the increase in appealed inpatient hospital claims, with RAC-related redeterminations accounting for 39 percent of all appealed Part A claims in 2012. By contrast, RAC-related claims accounted for only 3 percent of appealed Part B claims in 2012.

Additionally, the rate of redeterminations that ended with contractors deciding partially or fully in favor of the appellants declined from 50 percent in 2008 to 24 percent in 2012. For RAC-related appeals, the rate of favorable decisions went from 83 percent in 2009 to 11 percent in 2012.

This fall, CMS will start integrating redeterminations into its Medicare appeals system. Based on these findings, the report recommends that once the system is implemented, CMS should use its new access to in-depth redetermination data to conduct more detailed analyses of redetermination trends and monitor the timeliness of processing. CMS should also continue its current efforts to encourage information sharing among contractors about best practices for redetermination processing, according to the OIG.

Additionally, as CMS begins to integrate redeterminations into the appeals system, the OIG recommends that the agency develop a strategy to monitor the quality, accuracy and completeness of the data. CMS agreed with all three recommendations, according to the report.

More Articles on Medicare Contractors:
GAO: Make Medicare Contractor Requirements More Consistent
AHA Struggles With CMS Over Proposed Inpatient Payment Rule
CMS Adjusts Medicare RAC Documentation Limits 

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