Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
T F L
HE  IRST  EVEL OF THE 
 
 
M A
EDICARE  PPEALS 
 
 
P , 20082012: 
ROCESS     
 
V   , O ,
OLUME   UTCOMES  AND 
T  
IMELINESS 
 
Daniel R. Levinson   
Inspector General  
 
October 2013 
OEI-01-12-00150   
   
EXECUTIVE SUMMARY:  THE FIRST LEVEL OF THE MEDICARE APPEALS 
PROCESS, 20082012:  VOLUME, OUTCOMES, AND TIMELINESS 
OEI-01-12-00150 
 
WHY WE DID THIS STUDY 
 
The Medicare appeals process serves as an important protection for beneficiaries and 
providers. This study represents the Office of Inspector Generals (OIG) first 
examination of redetermination, i.e., the first level of the appeals process for Medicare 
Parts A and B. This study contributes to OIGs body of work concerning the Medicare 
appeals system. 
 
HOW WE DID THIS STUDY  
 
This study focused on redeterminations processed for Medicare Parts A and B during 
20082012. We obtained and analyzed data on redeterminations and claims processed 
from the Centers for Medicare & Medicaid Services (CMS) Contractor Reporting of  
Operational and Workload Data system  for calendar years 20082012.  We surveyed 
18 contractors that process redeterminations for Medicare Parts A and B and interviewed 
5 of them to learn more about how they process redeterminations.   
 
WHAT WE FOUND 
 
In 2012, contractors processed 2.9 million redeterminations, which involved 3.7 million 
claims, an increase of 33 percent since 2008.  Although 80 percent of all redeterminations 
in 2012 involved Part B services, redeterminations involving Part A services have risen 
more rapidly. By 2012, appeals involving recovery audit contractors accounted for 
39 percent of all appealed Part A claims.  Contractors decided in favor of Part A 
appellants at a lower rate than that for Part B appellants.  Also, contractors largely met 
required timeframes for processing redeterminations and paying appeals decided in favor 
of appellants, but they fell short of meeting timeframes for transferring case files for 
second-level appeals. In addition, contractors use information from redeterminations in a 
variety of ways to improve their operations and to educate providers.  Finally, CMS 
employs multiple methods to improve contractors processing of redeterminations, 
including fostering communication among contractors and implementing the Medicare 
Appeals System (MAS) for first-level appeals. 
 
WHAT WE RECOMMEND  
 
We recommend that CMS (1) use the MAS to monitor contractor performance, 
(2) continue to foster information sharing among Medicare contractors, and (3) monitor 
the quality of redetermination data in MAS.  CMS concurred with all three 
recommendations.  
 
   
TABLE OF CONTENTS 
 
Objectives ....................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................5 

Findings........................................................................................................8 

In 2012, contractors processed 2.9 million redeterminations,  

which involved 3.7 million claims, an increase of 33 percent  

since 2008 ........................................................................................8 

An increase in claims from RAC-related redeterminationswhich  

account for 39 percent of all appealed Part A claims in  

2012explains the fivefold increase in appealed inpatient  

hospital claims since 2008 .............................................................10 

Contractors decided in favor of Part A appellants at a lower rate 
than that for Part B appellants........................................................11  

Contractors largely met required timeframes, with some 
  
exceptions ......................................................................................14 

Contractors use information from redeterminations in a variety of  
ways to improve their operations ...................................................16 

CMS employs multiple methods to improve contractors 
 
processing of redeterminations ......................................................18 

Conclusion and Recommendations ............................................................21 

Agency Comments and Office of Inspector General Response .....23 

Appendixes ................................................................................................24 

A: Additional Data Tables .............................................................24 

B: Agency Comments  ...................................................................29 

Acknowledgments......................................................................................32 

 
   
   
OBJECTIVES 
1. 	  To describe the volumes and trends in redeterminations in Medicare 
Parts A and B processed in 20082012. 
2. 	  To assess the outcomes and timeliness of Medicare contractors  
processing of redeterminations for Parts A and B.  
3. 	  To assess the Centers for Medicare & Medicaid Services (CMS) 
monitoring of redetermination processing. 
BACKGROUND 
The Medicare Fee-for-Service Appeals Process  
Medicare providers, beneficiaries, and other parties (such as State 
Medicaid agencies) may appeal certain decisions related to Medicare 
claims.1  The Medicare appeals process includes five levels (see Table 1).  
This study focuses on the first level, redetermination. 
Table 1: Levels of the Medicare Fee-For-Service Appeals Process  
Level   Steps Taken  
First level  Redetermination by  a Medicare claims administration contractor 
Second level   Reconsideration by  a Qualified Independent Contractor (QIC) 
Hearing by an Administrative  Law Judge in the Office of 
Third level  
Medicare Hearings and Appeals 
Review  by the Medicare Appeals Council  within the 
Fourth level  
Departmental Appeals Board  
Fifth level  Judicial review  in U.S. District Court  
Source: CMS, Original Medicare (Fee-for-service) Appeals Process, accessed at 

http://www.cms.gov/orgmedffsappeals on February 14, 2013.
  
Overview of the Redetermination Process 
Requesting redetermination.   Appellants must file requests for 
redetermination within 120 days of receiving notice of the claim  
determination.  Such notice includes, for providers, Medicare Remittance 
Advice or, for beneficiaries, the Medicare Summary Notice.  Providers 
may also request a redetermination when notified that a postpayment 
review has determined that an overpayment has been made.  Such reviews 
are conducted by Recovery Audit Contractors (RAC), Zone Program  
Integrity Contractors (ZPIC), and Program Safeguard Contractors (PSC), 
 
1 Social Security Act,   1869; 42 CFR  405.906(b) and  908.  For the purposes of this 
report, we use the term provider to refer both to providers and suppliers that provide 
items and services under Medicare Parts A and B. 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   1 
   
   
as well as CMSs Comprehensive Error Rate Testing (CERT) program.2   
The timeframes and procedures for appealing overpayments from  
postpayment review are the same as those that concern initial claim  
determinations.  
Appellants must file redetermination requests in writing and must also 
indicate the reason why they disagree with the initial determinations. 3   The 
redetermination request can cover one or multiple claims.  Appellants may 
also submit additional evidence, such as medical records or other 
documents that should be considered when the redeterminations are made.   
Decisionmaking process. The request for redetermination is filed with, 
and the redetermination is made by, either the same Medicare claims  
administration contractor (hereafter,  contractor) that made the initial 
determination or the contractor that is currently operating in that 
jurisdiction. As of May 2013, these contractors include 16 Medicare 
Administrative Contractors (MACs), as well as one fiscal intermediary 
and one carrier.4   
The redetermination is considered a second look at a claim and its 
supporting documentation.  It must be conducted by an employee of the 
contractor who was not involved in making the initial determination.5   
Depending on the nature of the redetermination, the review may be 
conducted by a medical review staff member, such as a nurse.  When 
making the redetermination, contractor staff must follow the same  
requirements as they would for initial claim determinations.  Examples of 
these requirements include statutory and regulatory requirements, as well 
as national and local coverage determinations.6  
Upon receiving the redetermination request, a contractor generally has 
60 days to make the redetermination and provide written notice of its 
decision to the appellant.7  However, if the appellant submits additional 
evidence after filing the redetermination request, the contractor may 
extend the decisionmaking date by 14 days.8    
 
2 See CMS, Medicare Claim Review Programs, accessed at 
https://www.cms.gov/MLNProducts/downloads/MCRP_Booklet.pdf on May 3, 2013.  In  
January  2012, CMS changed the name of RACs to Recovery Auditors.  
3 42 CFR   405.944(b); 42 CFR   405.946(a). 
4 CMS, Status  of Medicare Administrative Contract (MAC) Awards (as of  April 26, 
 
2013), accessed at www.cms.gov on  May 3, 2013.  

5 Social Security Act,   1869(a)(3)(B)(ii); CMS, Medicare  Claims Processing Manual, 

ch. 29,  310. 

6 CMS, Medicare  Claims Processing Manual, ch. 29,  310. 

7 42 CFR   405.950(a). 

8 42 CFR   405.946(b) and 405.950(b). 

The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   2 
   
   
Outcomes of redeterminations. The result of a redetermination may be 
fully or partially favorable to the appellant (i.e., a full or partial Medicare 
payment will be made) or unfavorable to the appellant (i.e., no Medicare 
payment will be made).9  Favorable or partially favorable redeterminations 
are generally paid within 30 days, but may take up to 60 days.10  
Appellants who are dissatisfied with the redetermination decisions may 
request reconsideration, which is the second level of the appeals process.  
Appellants must file requests for reconsideration with a QIC within 180 
days of the redetermination decisions.  Upon receipt of a reconsideration 
request, a QIC requests the redetermination case file from the contractor, 
which must provide it to the QIC within 7 calendar days of the date of the 
QICs request.11  
CMSs Tracking of Medicare Appeals 
Currently, no tracking system contains details on individual 
redeterminations that contractors process.  The Medicare Appeals System  
(MAS), which is intended to support appeals processing across the first 
four levels of the appeals process, contains information only on appeals at 
the second and third levels. CMS will begin to integrate redeterminations 
into MAS beginning in September 2013.12  Currently, contractors maintain  
case files and redetermination tracking systems for their own internal use.   
Though CMS does not track individual redeterminations, its Contractor 
Reporting of Operational and Workload Data (CROWD) system, which it 
uses to monitor all aspects of contractors workloads, includes aggregated 
information on redeterminations.13  On a monthly basis, contractors 
electronically submit to CMS data from CROWD on redetermination 
processing (hereinafter, CROWD data).14   Table 2 on page 4 shows some  
of the variables included in CROWD data.  Because redeterminations that 
result from overpayments identified by RACs (hereinafter, RAC-related 
redeterminations) are funded in a manner different from that for other 
 
9 Under certain circumstances, contractors may dismiss redetermination requests and 
appellants may withdraw their requests for redetermination.  Dismissals and withdrawals 
occur before a redetermination decision is made or communicated.  See CMS, Medicare  
Claims Processing Manual, ch. 29,  310.1(B)(4)  and 310.6.  
10 CMS, Part  A and Part B Medicare  Administrative Contractor Statement of  Work, 
Attachment J-1,  C.5.10.2. 
 
11 CMS, Medicare  Claims Processing Manual, ch. 29,  320.4.  That manual provision 

was last revised in October 2005, whereas most contractors statements of work specify a 

case file transfer timeframe of 5 calendar days. 

12  Capital Asset Plan and Business Case Summary for the Medicare Appeals System, 

accessed from  www.itdashboard.gov  on March 29, 2012. 

13 CMS, Medicare Financial Management Manual, ch. 6,    10.1 and  10.2. 

14 CMS, Medicare Financial Management Manual, ch. 6,   460. 

The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   3 
   
   
types of redeterminations, CROWD  also includes a separate set of 
variables for tracking RAC-related redeterminations. 15  
Table 2: Examples of Variables in CROWD Data  
Variables 
Number of redetermination requests received  
Redetermination requests completed  
Types of claims involved in redetermination requests (skilled nursing facility, home health,  
inpatient hospital, outpatient, laboratory, ambulance, durable medical equipment, 
physician, other)   
Outcomes of redeterminations (fully favorable, partially favorable, unfavorable, 
dismissed/withdrawn)  
Completion timeframes for redeterminations  
Number of case files requested by QICs and timeframes for forwarding case files to QICs 
Number of favorably redetermined claims paid within 30 days16  
Source: CMS, Monthly Statistical Report on Intermediary and Carrier Part A and Part B Appeals 
Activity Form (CMS-2592).   
Identifying Suspected Fraud During the Redetermination 
Process 
CMS instructs contractors to ensure that sufficient documentation and 
evidence exist to show that services were furnished.17 If a contractor has 
substantial basis for determining that an appealed service was not 
furnished, it may deny or reduce the payment.18   The contractor must also 
document this decision in the case file, as well as send a copy of the 
decision to the PSC or ZPIC. 
Contractors  Analysis of Redetermination Data  
CMS requires contractors to analyze all available data, including 
redetermination data, for developing provider outreach and education.19  
Moreover, CMS considers a contractors data analysis program to be the 
basis of an effective quality improvement program.20 For both of these 
purposes, contractors data analysis programs should identify trends or 
 
15 CMS, Medicare Financial Management Manual, Transmittal 144, Change Request 

6251, November 28, 2008.  
 
16 CMS refers to this as effectuation.  See CMS, Medicare Claims Processing Manual, 

ch. 29,  310.11. 

17 CMS, Medicare Claims Processing Manual, ch. 29,  310.4. 

18 CMS, Medicare Claims Processing Manual, ch. 29,  280.3. 

19 CMS, Medicare Contractor Beneficiary and Provider Communications Manual, ch. 6, 

 20.3. 
 
20 CMS, Medicare Claims Processing Manual, ch. 29,  350. 

The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   4 
   
   
aberrancies in redeterminations, as well as any inefficiencies or 
problems.21    
Concerns about Appeals Processing 
Three Office of Inspector General (OIG) reports have raised concerns 
about aspects of appeals processing at the second and third levels, as well 
as problems with the quality of data in MAS.  A report from 2012 on the 
third level of the appeals process found issues with incomplete or 
disorganized case files.22  A report from 2008 on the third level of the 
appeals process identified problems with incomplete and inaccurate data 
in MAS, including inconsistencies in appellant information and omitted 
dates.23   In addition, a report from 2008 that examined the second level of 
the appeals process found unmet timeframes for the processing of Part B 
appeals; these unmet timeframes were attributed to (1) delays in receiving 
case files from the contractors that processed redeterminations, 
(2) unexpected volume of appeals, and (3) challenges with using MAS.24   
The report also identified that inaccurate information was entered into 
MAS for 54 percent of second-level appeals.   
In 2003, the Government  Accountability Office (GAO) reported that CMS 
had limited understanding of the nature and types of Parts A and B 
appeals.25  Specifically, GAO highlighted that CMS did not collect data on 
the characteristics of appeals, such as the reason for the appeal, the type of 
denial being appealed, and the type of appellant.  As previously 
mentioned, CMS still does not collect these data for redeterminations.   
METHODOLOGY 
Scope 
This study focused on redeterminations processed for Medicare Parts A  
and B during 20082012. We did not examine expedited redeterminations 
for Part A services, which are handled by Quality Improvement 
Organizations.26  
 
 
21 Ibid. 
22 OIG,  Improvements Are Needed at the Administrative Law Judge Level of Medicare 

Appeals, OEI-02-10-00340, November 2012. 

23 OIG,  Medicare Administrative Law Judge Hearings:  Early Implementation,  

20052006, OEI-02-06-00110, July 2008. 
24 OIG,  Early Implementation Review of Qualified Independent Contractor Processing of 
 
Medicare Appeals Considerations, OEI-06-06-00500, July 2008. 

25 GAO,  Medicare Appeals: Disparity between Requirements and Responsible Agencies 

Capabilities, GAO-03-841, September 2003.   
26 42 CFR   405.1202. 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   5 
   
   
Data Sources and Analysis 
CROWD Data. We obtained CROWD data on redeterminations from  
CMSs Contractor Management Information System (CMIS) for calendar 
years 20082012. We analyzed these data to determine the number of 
redeterminations processed, the types of claims involved in 
redeterminations, and the outcomes.  We also analyzed these data to 
determine the extent to which contractors met the required timeframes for 
processing redeterminations, forwarding case files to QICs, and paying 
favorably redetermined claims.  Finally, we analyzed the data to determine 
the number of claims processed and denied in these timeframes. 
In addition, we also analyzed data from CMIS on the number of claims for 
Medicare Parts A and B that were processed and denied from 20082012. 
Survey of Contractors. In January 2013, we surveyed the 18 contractors 
then in operation that processed redeterminations for Parts A and B.  The 
questionnaire collected information on the following areas:  
redetermination workload, contractor analysis of redetermination data, 
redetermination requests from beneficiaries, suspected fraud and abuse, 
working with other contractors, working with CMS, implementation of 
MAS, and contractor challenges with processing redeterminations.  Our 
response rate was 100 percent. 
Contractor Interviews. We interviewed five purposively selected 
contractors to learn more about how they process redeterminations.  We  
conducted these interviews either by telephone or onsite.  For each 
contractor, we interviewed management and key staff responsible for 
redeterminations, including those that process redeterminations and 
develop provider outreach and education strategies.  We used a structured 
protocol that addressed the following topics:  contractor processes for 
redeterminations, trends in redeterminations volume, systems for 
analyzing redeterminations data, processes for referral of redeterminations  
because of suspicion of fraud or abuse, provider outreach and education, 
interaction with CMS, collaboration with other contractors, and challenges 
contractors faced concerning redetermination processing.  
Interviews With CMS Staff.  We interviewed relevant staff from CMSs 
Medicare Contractor Management Group and Medicare Enrollment and 
Appeals Group to learn about their oversight of redeterminations.  We  
used a structured protocol. We collected information on the activities that  
CMS conducts to monitor redetermination processing, the actions CMS 
had taken to address recent increases in appeals volume, progress towards 
implementing MAS, and the challenges that CMS faces in overseeing 
redeterminations. 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   6 
   
   
Review of CMS Documents. We obtained and reviewed relevant policies, 
manuals, and other documents issued by CMS regarding redeterminations.  
This included the Medicare Claims Processing Manual, the Medicare  
Financial Management Manual, the Medicare Contractor Beneficiary and 
Provider Communications Manual, contractor statements of work, and 
other relevant documentation regarding redetermination processing. 
Limitations 
CROWD data are self-reported by contractors, and we did not 
independently verify them. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
   
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   7 
   
   
FINDINGS 
In 2012, contractors processed 2.9 million 
redeterminations, which involved 3.7 million claims, 
an increase of 33 percent since 2008  
Redeterminations may involve multiple claims and service types; 
therefore, the number of redeterminations is smaller than the number of 
claims.  The number of claims involved in redeterminations in 2012 were 
only 2.6 percent of denied claims and only 0.3 percent of the 1.2 billion 
claims processed in that year (Table 3).  In addition, the redeterminations 
processed in a given year could involve claims from previous years and 
are not a subset of the claims denied in that year.   
Table 3: Redeterminations and Medicare Claims Processed, 20082012  
Number of claims  Percentage of  
Redeterminations  involved in  Total Medicare  Total Medicare  denied claims with 
Year 
processed   redeterminations   claims processed   claims denied   redeterminations  
processed   processed  
2008   2,206,331   2,820,726   1,189,655,945   159,437,418   1.8%  
2009  2,161,360   2,656,577   1,182,234,051   129,800,982   2.0%  
2010   2,190,693   2,652,725   1,175,428,235  118,080,657    2.2%  
2011   2,417,753   2,989,687   1,184,826,848  118,931,285    2.5%  
2012   2,937,983   3,664,599   1,230,162,749  139,275,486    2.6%  
Source:  OIG analysis of CROWD data, 2013.   
 
On our survey, 14 of the 18 contractors estimated that 5 percent or less of 
the redetermination requests they receive come from beneficiaries or their 
representatives. Although CROWD data do not contain information on 
whether requests for redetermination are filed by providers or 
beneficiaries, our interviews and survey data suggest that requests for 
redetermination are typically filed by providers rather than beneficiaries.   
The percentage increase in Medicare redeterminations from 20082012 
outpaced the percentage increase in the total number of Medicare claims  
processed. From 2008 to 2012, the number of redetermination requests 
processed increased by 33 percent, while the overall number of Medicare 
claims processed increased by 3 percent.   
Although 80 percent of all redeterminations in 2012 involved Part B 
services, redeterminations involving Part A services have risen more 
rapidly. In 2012, redeterminations involving Part A services totaled fewer 
than 600,000, versus 2.3 million for Part B.  However, from 2008 through 
2012, Part A redetermination requests increased by 136 percent, versus 
20 percent for Part B. (See Figure 1 for annual changes in 
redeterminations processed.)  In addition, although there were fewer 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   8 
   
   
Part A redeterminations, contractors we interviewed noted that Part A  
redeterminations are generally much more time and resource intensive to 
process than are those for Part B.  Typically, Part A redeterminations 
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. 
Figure 1:  Percentage Change in Redeterminations 
Processed From Previous Year 
80% 
70% 
60% 
50% 
40% 
Percentage 
30% 
Change From  Part A 
20% 
Previous Year 
10%  Part B 
0% 
-10% 
-20% 
-30% 
2009  2010  2011  2012 
Year 
 
Source:  OIG analysis of CROWD data, 2013.  
Appeals of inpatient hospital claims, the most commonly appealed Part A  
services, primarily drove the large increase in Part A redeterminations 
between 2008 and 2012 (Table 4).  The number of appealed Part A home 
health claims also grew dramatically between 2008 and 2012, by 
700 percent. 
Table 4: Part A Medicare Claims Appealed From 2008 to 2012  
Percentage change in  
Claims appealed   Claims appealed  
Service type   claims appealed from  
in 2008   in 2012  
2008 to 2012  
Inpatient   45,532   283,697   523%  
Outpatient   140,926   177,709   26%  
Home Health   14,248   114,453   703%  
Laboratory  1,701   1,131   -34%  
Ambulance  5,723   3,488   -39%  
Skilled Nursing Facility   8,928   11,367   27%  
Other   45,945   61,267   33%  
Total   263,003   653,112   148%  
Source:  OIG analysis of CROWD data, 2013.   
 
 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   9 
   
   
From 2008 to 2012, the number of appealed Part B claims increased by  
18 percent across service types (Table 5).  Most Part B redeterminations 
involved durable medical equipment (DME) and physician claims.  The 
largest increases from 2008 to 2012 were for laboratory (39 percent) and 
DME (38 percent) claims. 
Table 5: Part B Medicare Claims Appealed From 2008 to 2012  
Percentage change in  
Claims appealed   Claims appealed  
Service type   claims appealed from  
in 2008   in 2012  
2008 to 2012  
Physician  1,360,286   1,480,832   9%  
DME  703,513   968,873  38%  
Ambulance  226,553   233,941   3%  
Laboratory  80,015   111,291   39%  
Other   187,351   216,550   16%  
Total   2,557,718  3,011,487   18%  
Source:  OIG analysis of CROWD data, 2013.   
 
An increase in claims from RAC-related 
redeterminationswhich account for 39 percent of all
appealed Part A claims in 2012explains the fivefold 
increase in appealed inpatient hospital claims since 
2008 
During our site visits, contractors noted that the growth of the RAC 
program, which CMS fully implemented in 2009, had resulted in increased 
appeals of RAC decisions. 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 (Figure 2).  CMSs CROWD data track 
whether RAC-related redeterminations involve Part A or Part B claims, 
but do not track the specific types of services involved.  However,  
contractors told us that RAC-related claims  most frequently involved 
short-term inpatient stays, which often require medical review.   
In contrast to the increase in appealed Part A claims, the increases in 
appealed Part B claims do not appear to be driven by an increase in RAC-
related redeterminations.  RAC-related claims made up only 1 percent of 
appealed Part B claims in 2010 and 3 percent of appealed Part B claims in 
both 2011 and 2012. 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   10 
   
   
Figure 2:  Percentage of Appealed Part A Claims Related to 
RAC Decisions 
100% 
90% 
80% 
70% 
60% 
50% 
Non-RAC-Related Claims 
40% 
RAC-Related Claims 
30% 
20% 
10% 
0% 
2008  2009  2010  2011  2012 
Year 
 
 Source:  OIG analysis of CROWD data, 2013.  
Although CROWD does not contain data on the reasons for 
redeterminations, contractors reported other reasons for the increase in 
redeterminations workload (Table 6).  In addition to RAC audits, these 
reasons included efforts to prevent improper payments, such as PSC/ZPIC  
reviews and prepayment edits.  Changes in payment policiessuch as local 
coverage determinationsalso increased the redeterminations workload, 
particularly for Part B. 
Table 6: Contractor-Reported Factors That Increased Redeterminations 
Workload  
Number of contractors  Number of contractors 
  reporting factor as increasing  reporting factor as increasing 
Factor 
Part A  redeterminations   Part B redeterminations  
(n=13)  (n=17) 
Audits by RACs   13  15 
Reviews by PSCs/ZPICs   11  14 
Prepayment Edits  11  11 
Local Coverage Decisions  7  15 
CMS Program Changes  8  16 
Source:  OIG survey of contractors, 2013.   
 
Contractors decided in favor of Part A appellants at a 
lower rate than that for Part B appellants 
Contractors decisions on redeterminations may be fully favorable to 
appellants, partially favorable to appellants, or unfavorable to appellants.  
Redetermination decisions also varied by the type of claims involved.  For 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   11
   
   
this study, decided redeterminations include all processed redeterminations  
that were not dismissed by contractors or withdrawn by appellants.27 From  
20082012, 7 percent of Part A redetermination requests and 12 percent of 
Part B redetermination requests were dismissed or withdrawn. 
From 2008 to 2012, the rate of favorable decisions on Part A  
redeterminations decreased  
As Table 7 shows, contractors decided fully or partially in favor of 
appellants for less than a quarter of Part A redeterminations in 2012.  The 
rate of fully or partially favorable decisions for Part A redeterminations 
decreased by over half from 2008 to 2012, from 50 percent to 24 percent. 
Table 7: Outcomes of Part A Redeterminations, 20082012  
Percentage of  
Percentage of  
Redeterminations  redeterminations fully  or 
Year  redeterminations  
decided   partially favorable to 
unfavorable to  appellants  
appellants  
2008   225,983   50%   50%  
2009   189,251   50%   50%  
2010   234,902   49%   51%  
2011   323,507   40%   60%  
2012   565,457   24%   76%  
Source:  OIG analysis of CROWD data, 2013.   
 
For Part A RAC-related redeterminations, the rate of favorable decisions 
decreased even more dramatically (Table 8).  In 2009 and 2010, the first 
2 years that contractors processed RAC-related redeterminations, most 
contractor decisions were fully or partially favorable to appellants.  
However, as the volume of RAC-related redeterminations grew  
substantially in 2011 and 2012, the favorable rate declined substantially,  
with just 11 percent of RAC-related redeterminations decided fully or 
partially in favor of appellants in 2012.  Contractors and CMS officials we  
interviewed noted that since RACs began their operations, they have 
become more skilled in interpreting Medicare payment policies.   
 
27 See CMS, Medicare Claims  Processing Manual, ch. 29,   310.6, for the circumstances 
under which contractors may dismiss redetermination requests. 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   12 
   
   
Table 8: RAC-Related and Non-RAC-Related Part A Redeterminations That 
Were Favorable to Appellants, 20082012  
Percentage of   Percentage of 
Overall percentage of  
RAC-related   non-RAC-related  
redeterminations  
Year  redeterminations   redeterminations  
favorable to appellants 
favorable to appellants  favorable to appellants 
(fully or partially) 
(fully or partially)   (fully or partially)  
2008   50%  N/A  50% 
2009   50%  83%  50% 
2010   49%  80%  47% 
2011   40%  21%  44% 
2012   24%  11%  33% 
Source:  OIG analysis of CROWD data, 2013.   
 
The outcomes of Part A redeterminations also varied on the basis of types 
of claims appealed.  In 2012, only 4 percent of redeterminations for home  
health claims and 10 percent of redeterminations for inpatient hospital 
claims were fully or partially favorable to appellants.  In contrast, 54 
percent of redeterminations for claims for outpatient hospital services 
were fully or partially favorable to appellants in 2012.  
From 20082012, about half of Part B redeterminations were 
favorable to appellants 
As Table 9 shows, the percentage of Part B redeterminations decided fully 
or partially in favor of appellants decreased slightly from 2008 to 2012, 
with the largest drop resulting between 2011 and 2012.  Physician claims, 
which represent the largest volume of Part B appeals, maintained steady 
favorable rates. However, the percentage of appealed DME claims  
decided in favor of appellants (either fully or partially) dropped from  
51 percent in 2008 to 38 percent in 2012. 
Table 9: Outcomes of Part B Redeterminations, 20082012  
Percentage of  
Percentage of  
Redeterminations  redeterminations fully  or 
Year  redeterminations  
decided  partially favorable to 
unfavorable to  appellants 
appellants 
2008   1,674,860   65%   35%  
2009   1,667,217   60%   40%  
2010   1,677,976   57%   43%  
2011   1,844,316   58%   42%  
2012   2,115,319   51%   49%  
Source:  OIG analysis of CROWD data, 2013.   
 
 
 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   13 
   
   
Contractors largely met required timeframes, with 
some exceptions 
By law, contractors are required to process 100 percent of 
redeterminations within required timeframes.  The 100-percent standard 
also applies to meeting the timeframes for transferring redetermination 
case files for second-level appeals, as well as to paying claims that were 
decided in the appellants favor.    
Contractors largely met timeframes for processing 
redeterminations 
Contractors are required to complete redeterminations within 60 days of 
receipt; if appellants submitted additional information after filing a 
redetermination request, these redeterminations must be completed within 
74 days.28   As Table 10 shows, the median completion rate (i.e., the 
percentage of redeterminations completed within the required timeframe) 
for Part A redeterminations ranged from 98 to 100 percent from 2008 to 
2011, but dropped to 89 percent in 2012.  Contractors annual median 
completion rate for Part B redeterminations was 99 percent in 2008 and 
100 percent from 20092012. 
Table 10:  Completion Rates for Processing Redeterminations, 20082012  
Overall percentage  Median  Lowest  Highest 
Medicare  Number of   completed within  contractor  contractor  contractor 
Part  Year  contractors   timeframes  completion rate  completion rate   completion rate 
2008   20  84%  98%  55%   100% 
2009   22  98%  99%  58%   100% 
Part A  2010   16  99%  100%  95%   100% 
2011   17  93%  100%  55%   100% 
2012   18  86%  89%  42%   100% 
2008   26  92%  99%  29%   100% 
2009   25  97%  100%  90%   100% 
Part B  2010   21  99%  100%  94%   100% 
2011   23  99%  100%  70%   100% 
2012   24  91%  100%  56%   100% 
Source:  OIG analysis of CROWD data, 2013.   
The increased demand on contractors  medical review staff could explain 
contractors difficulty in meeting processing timelines for Part A  
redeterminations.  Contractors we interviewed cited the need to hire 
additional medical reviewers to handle the influx of Part A appeals.  On 
 
28 42 CFR   405.946(b).  The contractors 60-day decisionmaking timeframe is  
automatically extended for 14 calendar days for each submission of additional 
information. See CMS, Medicare Claims Processing  Manual, ch. 29,  310.4.  
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   14 
   
   
our survey, 14 of 18 contractors indicated that recruiting staff to conduct 
medical reviews was a challenge.  In  our interviews, contractors told us 
that hiring medical review staff can be a major challenge when those skills 
are in demand.  Moreover, the influx of RAC-related redeterminations has 
led to contractors training their medical review staff on the services 
involved in those redeterminations. 
Contractors fell short of meeting timeframes for transferring 
case files for second level appeals, likely because of  
substantial increases in the number of such files  
Appellants that are unsatisfied with the outcomes of redeterminations can 
file appeals at the second level within 180 days of receiving their 
outcomes.  Given the growth in redeterminations that were unfavorable to 
appellants, the volume of case files that contractors transferred to the 
second level also grew markedly.  In 2012, contractors transferred over 
half a million case files to QICs for second-level appeals (see Figure 3).  
This was a 144-percent increase in case files transferred from 
2008 to 2012 and an 87-percent increase in files transferred from  
2011 to 2012.  The number of Part A case file transfers increased by 
324 percent between 2008 and 2012. This increase corresponds largely to 
the volume of unfavorable redeterminations for Part A. 
Figure 3: Number of Case Files Transferred From Contractors to QICs by  
Medicare Part, 20082012 
300,000  281,415 
250,000  224,338 
196,576  191,331  199,556 
200,000 
154,453 
Part  A 
150,000 
Part  B 
100,000 
71,515 
52,890  41,288  48,255 
50,000 
0 
2008  2009  2010  2011  2012 
 
Source:  OIG analysis of CROWD data, 2013.  
 
Likely as a result of the increase in Part A case files transferred, the 
timeliness of contractors transfer of these case files to QICs within 5 days  
dropped to 79 percent in 2012 (See Table A1 in Appendix A).  In the 
previous 3 years, contractors had transferred close to 90 percent of case 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   15 
   
   
files within 5 days. The median percentage of Part A case files transferred 
to QICs within required timeframes across contractors lagged in 2012 as 
well, dropping to 83 percent. The percentage of Part B case files 
transferred within 5 days remained high, with 98 percent transferred 
within this timeframe in 2012.  
Contractors largely paid favorably appealed claims within 
timeframes  
In most instances, CMS requires contractors to issue payment within 
30 days for claims that were decided fully or partially in the appellants  
favor.  Across contractors, the median percentage of claims paid within 
that timeframe in 2011 and 2012 was 99 percent for Part A and 100 
percent for Part B (see Table A2 in Appendix A). 
Fluctuating workloads affect contractors ability to meet 
redetermination timelines 
On our survey, 17 of 18 contractors cited fluctuating redetermination 
workloads as a challenge in meeting mandated timeframes for processing.  
Increases in workload pose challenges when the volume exceeds the 
amount for which a contractor has budgeted.  Because appellants have 
120 days to file requests for redetermination, it is difficult to predict when 
the changes in workload might occur.   Managers at one contractor told us 
that, along with hiring additional staff to keep up with the workload, they 
had also borrowed staff from other departments, instituted mandatory 
overtime, and hired temporary staff.  Managers at other contractors told us 
that they had to hire several more medical review staff members because 
of the increase in Part  A RAC-related redeterminations.  Nonetheless, 
contractors find it difficult to plan resource needs when they are unsure 
how long their workload will keep increasing.   
 
Contractors use information from redeterminations in 
a variety of ways to improve their operations 
CMS requires contractors to analyze redeterminations data.  Contractors use  
the results of these analyses to inform provider education and outreach, as 
well as to improve their internal operations.  In addition, contractors train 
redetermination staff to identify potential instances of fraud while reviewing 
redeterminations. 
 
 
 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   16 
   
   
Contractors used information from redeterminations for 
educating providers and improving their internal operations 
CMS instructs contractors to use all data they have available, including 
data related to appeals, for developing provider outreach and education.29   
On our survey, contractors reported that they analyzed a variety of 
redetermination-related data sources as a part of their data analysis 
programs.  The most common types of data that contractors reported 
analyzing all of the time include the timeframes for processing 
redeterminations (16 of 18 contractors), feedback from staff  
(13 contractors), outcomes of redeterminations (11 contractors), and 
reasons for claim denials that result in redeterminations (9 contractors).  
Moreover, all 18 contractors reported that they had identified trends, 
aberrancies, or patterns through the data they analyzed in the past year.   
The information from contractors analysis of redetermination-related data  
informs the provider outreach and education that they conduct relative to 
appeals. On our survey, 16 of 18 contractors reported that their data 
analysis informs their education and outreach to some extent or to a 
large extent.  Contractors used the results from their data analysis to 
target specific providers for increased education and to develop outreach 
and education related to specific billing issues and aspects of the 
redetermination process.  For example, 1 contractor uses data on the top 
10 reasons that redeterminations occur as the basis for provider 
teleconferences and listserv messages. Other contractors use data analysis 
to target provider-specific education, such as letters or in-person meetings.  
Provider-specific education may address correct billing for items or 
services as well as aspects of the appeals process, such as correctly 
submitting redetermination requests or the difference between 
redeterminations and reopening of claims.30  
In addition, contractors also used the results from their data analysis to 
improve their internal redetermination processes.  On our survey, 10 of 18 
contractors reported that they used these results for process improvements 
to some extent or to a large extent.  Most contractors that used data for 
improving their redetermination processes reported that they used the 
information to improve training for staff and make changes to procedures.  
For example, one contractors analysis revealed that the provider contact 
center received a large volume of calls on redeterminations.  As a result, 
 
29 CMS, Medicare Contractor Beneficiary and Provider Communications Manual, ch. 6, 
 20.3. 
 
30 Reopening is a process that is  separate from appeals.  See CMS, Medicare Claims 

Processing Manual, ch. 34,  10. 

The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   17 
   
   
the contractor instituted training on redeterminations for provider contact 
center staff. 
Although detecting suspected fraud through the 
redetermination process presents difficulties, contractors train 
their redetermination staff on fraud detection 
On our survey, 15 of 18 contractors reported that they have limited  ability 
to detect suspected fraud primarily through the redetermination process.  
Moreover, contractors that we interviewed cited difficulties in detecting 
fraud solely through the redetermination process.  As the managers at one 
contractor told us, an appeal represents an isolated case, which limits the 
ability to identify fraud during that process.  Managers at another 
contractor mentioned that they focus their efforts on fraud prevention 
efforts, such as implementing edits.  Managers at one contractor 
mentioned that when any questionable redeterminations are identified, 
staff refer them internally to their benefit protection unit, which will refer  
them to the ZPIC if appropriate.  
Despite the limited ability to detect fraud through the redetermination 
process, all contractors provide training to staff concerning suspected 
fraud. On our survey, 16 of 18 contractors reported conducting  
fraud-related training annually, with the remaining 2 providing it quarterly.  
All contractors reported training staff at all levels of the redetermination 
process, including clerical staff, redetermination review staff, medical 
review staff, management, and mailroom staff. 
CMS employs multiple methods to improve 
contractors processing of redeterminations   
During our interviews, CMS staff noted that they oversee the 
redetermination process through a variety of contract management 
activities.  CMS examines CROWD data and reviews contractors monthly 
status reports to monitor performance on redetermination processing and 
identify any problems with meeting timeframes.  In biweekly conference 
calls with each contractor, CMS discusses contractors workload and 
progress towards meeting timeframes.  Moreover, CMS reviews 
redetermination processing as part of the Quality Assurance Surveillance 
Plan for MACs.31    
 
 
 
31 See OIG, Medicare Administrative Contractors Performance, OEI-03-11-00740, 
forthcoming. 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   18 
   
   
CMS has taken steps to address the increase in 
redeterminations 
CMS expects contractors to manage the increasing workload by 
identifying and reacting quickly to workload changes.  CMS has been 
working to help contractors manage the increased workload by providing 
additional funding where necessary.  On our survey, the most common 
redeterminations-related issue that contractors reported discussing with 
CMS concerned RAC-related redeterminations (11 of 18 contractors).  
CMS coordinates with the RACs to predict increases in the 
redetermination workload.  Furthermore, CMS and the contractors meet 
with RACs to discuss which program areas the RACs will be focusing on 
and to ensure that the RACs are correctly interpreting Medicare payment 
policies.  
Nevertheless, CMS noted that the recent increases in the redetermination  
workload are a significant challenge.   CMS officials attributed the surge in 
workload to the increasing audit and program integrity activity, most 
notably audits by RACs, reviews by PSCs/ZPICs, and the CERT program.  
During our interview, one CMS manager also commented that any change  
in the program results in an increase in appeals.   
With the increasing workload, ensuring that contractors meet the  
100-percent timeliness standard for processing redeterminations is a 
challenge for CMS. This standard is mandated by law and is resource 
intensive for contractors to achieve.  CMS provides additional funding to 
contractors to help them meet this standard; however, as one CMS 
manager commented, the amount of resources necessary to get from  
98 to 100 percent is extraordinary. 
CMS fosters communication among contractors concerning 
processing redeterminations 
Despite the competitive nature of contracting, CMS has fostered 
interaction among contractors. On our survey, 14 of 17 contractors 
reported that CMS had facilitated discussions on redeterminations among 
the contractors and 12 of 17 contractors reported meeting monthly or more 
frequently with other contractors to discuss redeterminations.  In 
particular, DME contractors highlighted strong collaboration among the 
four DME contractors. 
Moreover, 16 of 17 contractors indicated that they would welcome 
increased interaction with other contractors regarding redeterminations.  
Some of the topics in which contractors expressed interest include 
consistency of processes and policies, language used in redetermination 
decision letters, and sharing of best practices. 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   19 
   
   
Implementation of MAS will improve CMSs ability to oversee 
the redetermination process 
Currently, CMS collects aggregate data on redeterminations from  
CROWD but does not collect information on individual redeterminations 
and appealed claims.  As a result, CMS has limited information on the 
types of services that are appealed and the types of appellants that are 
filing requests for redeterminations.  Once MAS is implemented, CMS 
will have access to indepth data about individual redeterminations directly 
from MAS.  This will enable CMS to conduct more detailed analysis of 
the redetermination process and will ease contractor workload because 
contractors will no longer have to report these data.  On our survey, all 
17 respondents indicated that they expect MAS to be useful for managing 
their workloads.   
MAS implementation will also eliminate the need for contractors to 
transfer case files to the QICs.  With MAS, QICs will be able to pull files 
on redeterminations directly from the system, saving the contractors from 
transferring them.  When surveyed about the usefulness of MAS for 
transferring case files to QICs, all 17 respondents indicated that they 
expect MAS will be very useful. 
   
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   20 
   
   
CONCLUSION AND RECOMMENDATIONS 
The percentage increase in Medicare redeterminations from 20082012 
outpaced the percentage increase in the total number of Medicare claims  
processed; this growth can likely be attributed to efforts to reduce 
improper payments.  Although CROWD data cannot provide many 
specifics on the nature of redeterminations, we identified substantial 
growth in Part A RAC-related redeterminations, which increasingly were 
decided unfavorably to appellants.  Despite efforts by CMS and its 
contractors to manage the timeliness of redetermination processing, the 
increasing volume of redeterminations has posed challenges to meeting 
the required timeframes, especially in  the past 2 years.  Contractors have 
used information from redetermination processing to target provider 
education, and CMS has also made efforts to encourage information-
sharing across contractors. 
In the fall of 2013, CMS will begin to integrate redeterminations into 
MAS. Once fully implemented, it will create efficiencies in 
redetermination processing.  Most notably, the manual, labor-intensive 
transfer of case files between the first and second levels of the appeals 
process will become obsolete.  MAS will also equip CMS with readily 
accessible data on redeterminations.   
We recommend that CMS: 
Use MAS to monitor contractor performance 
Once MAS is implemented, CMS will have access to indepth data about 
individual redeterminations in real time.  CMS should use these data to 
closely monitor the timeliness of redetermination processing, particularly 
during the implementation of MAS.  CMS should also use MAS data to 
conduct more detailed analyses of redeterminations trends. 
Continue to foster information sharing among Medicare 
contractors 
CMS has increased interaction among its contractors, and contractors 
expressed interest in even more interaction.  CMS should continue to 
facilitate information sharing on best practices for redetermination 
processing. This might be particularly useful during MAS 
implementation.  CMS should also continue to encourage  
information sharing with the contractors that conduct postpayment 
reviews, such as RACs, ZPICs, and PSCs.  This would help contractors 
better predict and prepare for future workload fluctuations.  
Monitor the quality of redeterminations data in MAS  
Previous OIG reports that examined the second and third levels of the 
Medicare appeals process identified concerns about inaccuracies and data 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   21 
   
   
missing from MAS.  As CMS begins to integrate redeterminations into 
MAS, it should develop a strategy to monitor the quality, accuracy, and 
completeness of the data entered into MAS.  Where possible, CMS should 
also ensure that data quality checks and validation are built into MAS. 
 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   22 
   
   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
CMS concurred with all three of our recommendations.   
In response to our first recommendation, CMS stated that MAS will 
enable enhanced monitoring and tracking of contractor performance.  It 
also noted that it will be able to use MAS to conduct more detailed 
analyses and identify trends and patterns with redeterminations.   
In response to our second recommendation, CMS stated that it had 
facilitated meetings among contractors related to MAS implementation 
and participation in hearings for the third level of the appeals process.  It 
also noted that contractors often share in sessions concerning MAS 
implementation, and it intends to continue these sessions after MAS is 
implemented so they can continue to share.  In addition, CMS stated that 
the recent increases in the appeals workload show why it is essential for 
information sharing to occur among the contractors that conduct 
postpayment reviews.   
In response to our third recommendation, CMS stated that contractors use 
of MAS data should ensure greater accuracy, timeliness, and efficiency in 
the appeals process. In addition, it stated that additional automation that 
will be implemented into MAS should reduce instances of erroneous and 
missing data that were identified by previous OIG reports on the second 
and third level of the appeals process.  CMS also noted that it will explore 
adding data metrics related to MAS to its Quality  Assurance Surveillance 
Plans and Award Fee Plans for MACs. 
For the full text of CMSs comments, see Appendix B.  
   
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   23 
   
   
 
APPENDIX A 
Additional Data Tables 
Table A1:  Timeliness of Case File Transfer to Qualified Independent Contractors, 20082012  
Percentage of case  Contractor percentages  
Medicare  Number of  
Part  Year  contractors   files transferred   Median  Lowest   Highest 
within 5 days  transfer rate   transfer rate   transfer rate  
2008   20  64%  85%   20%   100%  
2009   22  87%  100%   61%   100%  
Part A  2010   16  87%  100%   59%   100%  
2011   17  89%  99%   50%   100%  
2012   18  79%  83%   42%   100%  
2008   26  81%  89%   14%   100%  
2009   25  97%  99%   56%   100%  
Part B  2010   21  99%  100%   93%   100%  
2011   23  99%  100%   92%   100%  
2012   20*  98%  99%   75%   100%  
* At different points in 2012, CMS changed each of the four DME contractors  file transfer timeframe from 5 days to  7 days.  Because CROWD  
lacks a discrete category for reporting file transfer within this  timeframe, we excluded these  contractors from the 2012  percentages. 
 
Source: OIG analysis of CROWD data, 2013.  
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   24 
   
   
 
Table A2: Timeliness of Payment of Favorably Redetermined Claims, 2008-2012  
Percentage of   Contractor percentages  
Medicare  Number of   favorably appealed  
  Year 
Part  contractors   claims paid within  Median paid  Lowest paid  Highest paid 
30 days   within 30 days   within 30 days   within 30 days  
2008   20  97%   98%   69%   100%  
2009   22  93%   97%   44%   100%  
Part A  2010   16  92%   99%   9%   100%  
2011   17  98%   99%   65%   100%  
2012   18  92%   99%   62%   100%  
2008   26  92%   97%   6%   100%  
2009   25  96%   98%   84%   100%  
Part B  2010   21  98%   100%   88%   100%  
2011   23  97%   100%   77%   100%  
2012   24  93%   100%   46%   100%  
Source: OIG analysis of CROWD data, 2013.  
 
   
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   25 
   
   
Table A3: Outcomes of Redeterminations for Skilled Nursing Facility Claims, 20082012 
Percentage of   Percentage of   Percentage of  
Redeterminations 
Year  redeterminations fully   redeterminations partially   redeterminations  
decided  
favorable to appellants  favorable to appellants   unfavorable to  appellants 
2008   8,455   19%  8%   74% 
2009   7,614   17%  5%   78% 
2010   9,851   16%  4%   82% 
2011   11,785   24%  6%   70% 
2012   10,654   16%  3%   77% 
Source: OIG analysis of CROWD data, 2013. 

Note: Some percentages do not sum  to 100 percent because of rounding. 

 
Table A4:  Outcomes of Redeterminations for Home Health Claims, 20082012  
Percentage of   Percentage of   Percentage of  
Redeterminations 
Year  redeterminations fully   redeterminations partially   redeterminations  
decided  
favorable to appellants  favorable to appellants   unfavorable to  appellants 
2008   13,385   22%  2%   76% 
2009   17,116   35%  4%   61% 
2010   46,037   9%  1%   89% 
2011   58,713   6%  1%   94% 
2012   112,844   3%  1%   95% 
Source: OIG analysis of CROWD data, 2013. 

Note: Some percentages do not sum  to 100 percent because of rounding. 

 
Table A5:  Outcomes of Redeterminations for Inpatient Hospital Claims, 20082012  
Percentage of   Percentage of   Percentage of  
Redeterminations 
Year  redeterminations fully   redeterminations partially   redeterminations  
decided  
favorable to appellants  favorable to appellants   unfavorable to  appellants 
2008   41,042   31%  0%   69% 
2009   10,929   30%  1%   70% 
2010   9,477   26%  2%   65% 
2011   63,918   16%  2%   83% 
2012   276,232   10%  0%   90% 
Source: OIG analysis of CROWD data, 2013. 

Note: Some percentages do not sum  to 100 percent because of rounding. 

 
Table A6:  Outcomes of Redeterminations for Outpatient Claims, 20082012  
Percentage of   Percentage of   Percentage of  
Redeterminations 
Year  redeterminations fully   redeterminations partially   redeterminations  
decided  
favorable to appellants  favorable to appellants   unfavorable to  appellants 
2008   124,185   55%  5%   39% 
2009   126,908   52%  4%   44% 
2010   159,088   53%  5%   42% 
2011   172,806   49%  6%   44% 
2012   161,707   49%  6%   46% 
Source: OIG analysis of CROWD data, 2013. 

Note: Some percentages do not sum  to 100 percent because of rounding. 

 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   26 
   
   
Table A7:  Outcomes of Redeterminations for Laboratory Claims, 20082012  
Percentage of   Percentage of   Percentage of  
Redeterminations 
Year  redeterminations fully   redeterminations partially   redeterminations  
decided  
favorable to appellants  favorable to appellants   unfavorable to  appellants 
2008   67,520   55%  2%   43% 
2009   74,804   45%  4%   52% 
2010   83,355   48%  5%   48% 
2011   87,933   54%  4%   42% 
2012   100,261   52%  2%   45% 
Source: OIG analysis of CROWD data, 2013. 

Note: Some percentages do not sum  to 100 percent because of rounding.  

 
Table A8:  Outcomes of Redeterminations for Ambulance Claims, 20082012  
Percentage of   Percentage of   Percentage of  
Redeterminations 
Year  redeterminations fully   redeterminations partially   redeterminations  
decided  
favorable to appellants  favorable to appellants   unfavorable to  appellants 
2008   217,258   68%  1%   32% 
2009   155,871   61%  1%   38% 
2010   173,966   52%  1%   47% 
2011   201,138   48%  0%   52% 
2012   225,684   43%  0%   57% 
Source: OIG analysis of CROWD data, 2013. 

Note: Some percentages do not sum  to 100 percent because of rounding. 

 
Table A9:  Outcomes of Redeterminations for Durable Medical Equipment Claims, 20082012  
Percentage of   Percentage of   Percentage of  
Redeterminations 
Year  redeterminations fully   redeterminations partially   redeterminations  
decided  
favorable to appellants  favorable to appellants   unfavorable to  appellants 
2008   628,712   46%  5%   32% 
2009   423,150   48%  7%   45% 
2010   485,295   44%  5%   50% 
2011   636,222   40%  6%   54% 
2012   897,500   33%  5%   62% 
Source: OIG analysis of CROWD data, 2013. 

Note: Some percentages do not sum  to 100 percent because of rounding. 

 
Table A10:  Outcomes of Redeterminations for Physician Claims, 20082012  
Percentage of   Percentage of   Percentage of  
Redeterminations 
Year  redeterminations fully   redeterminations partially   redeterminations  
decided  
favorable to appellants  favorable to appellants   unfavorable to  appellants 
2008   1,112,028   60%  3%   37% 
2009   1,280,691   54%  3%   43% 
2010   1,150,788   54%  4%   42% 
2011   1,257,177   55%  3%   42% 
2012   1,298,987   52%  2%   46% 
Source: OIG analysis of CROWD data, 2013.  
 
 
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   27 
   
   
Table A11:  Outcomes of Redeterminations for Other Claims, 20082012  
Percentage of   Percentage of   Percentage of  
Redeterminations 
Year  redeterminations fully   redeterminations partially   redeterminations  
decided  
favorable to appellants  favorable to appellants   unfavorable to  appellants 
2008   196,640   53%  2%   45% 
2009   166,697   45%  2%   53% 
2010   176,085   43%  2%   55% 
2011   181,088   45%  2%   53% 
2012   250,403   33%  1%   66% 
Source: OIG analysis of CROWD data, 2013.  
 
Note: The data presented in these tables were self-reported by contractors to the Centers 
for Medicare & Medicaid Services.  We did not independently verify the accuracy of 
these data.  
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   28 
  APPENDIX B 
Agency Comments 
,..,.....-....
( 
..!~_ 
,-:::z'[ DEPARI'MENT OF H EALTH & HUMAN SERVICES  Centers for Medicare & Medicaid Services
Administrator 
Washington, DC 20201 
DATE:  AUG 2 3 2013 

TO:  Daniel R. Levinson 

Inspector General 

FROM:  Nl.ari.lyn Tavenner 

Admil\is~r 
SUBJECT:  Office oflnspector General (OIG) Draft Report: "The First Level ofthe 
Medicare Appeals Process, 2008-2012: Volume, Outcomes, and Timeliness" 
(OEI-01-12-00150) 
Thank you for the opportunity to review and comment on the OIG draft report. The OIG's study 
focused on redeterminations, i.e., the first level ofthe appeals process for Medicare Parts A and 
B, processed during 2008-2012. The purpose ofthe report was to describe the volumes and 
trends in redeterminations in Medicare Parts A and B processed in 2008-2012; assess the 
outcomes and timeliness ofMedicare contractors' processing of redeterminations for Parts A and 
B, and assess the Centers for Medicare & Medicaid Services' (CMS) monitoring of 
redetermination processing. We appreciate OIG's time and effort in reviewing our processes. 
The CMS concurs with OIG's recommendations and our comments on each recommendation are 
below. 
OIG Recommendation 
The OIG recommends CMS use the Medicare Appeals System (MAS) to monitor contractor 
performance. 
CMS Response 
The CMS concurs with this recommendation. Currently, MAS supports the processing of 
qualified independent contractor reconsiderations and Administrative Law Judge (ALJ) hearings, 
i.e., the second and third level of the appeals process for Medicare Parts A and B. In the fall of 
2013, four Medicare Administrative Contractors (MACs) will begin processing Part A 
redeterminations in MAS. This is an important step in CMS' phased-in approach to 
implementing MAS at all ofthe MACs. The MAS will provide CMS with real-time data and 
standardized reports to allow enhanced monitoring and tracking of MAC performance. 
Additionally, MAS will provide a broader reporting structure with a much greater level of 
specificity than the current redeterminations reporting mechanisms that are part of the Contractor 
Reporting of Operational and Workload Data (CROWD) system. CMS will then be able to 
The First Level of the Medicare Appeals Process, 2008-2012 (OEI-01-12-00150)  29   
   
 
   
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   30 
   
   
   
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   31 
   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Joyce Greenleaf, Regional 
Inspector General for Evaluation and Inspections in the Boston regional 
office, and Russell Hereford and Kenneth Price, Deputy Regional 
Inspectors General.  
Maria Maddaloni served as the team leader for this study.  Other Office of 
Evaluation and Inspections staff from the Boston regional office who 
conducted the study include Jessica Fargnoli.  Central office staff who 
provided support include Heather Barton, Kevin Farber, Dave Graf,  
Althea Hosein, Scott Manley, and Christine Moritz.  
   
The First Level of the Medicare Appeals Process, 20082012 (OEI-01-12-00150)   32 
   
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of beneficiaries  served by those 
programs.  This statutory mission  is  carried  out through  a nationwide network  of  audits, 
investigations, and inspections conducted by the  following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of  fraud and misconduct  related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs and operations and  providing all  
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and abuse cases involving HHS programs,  including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.