Department of Health and Human Services
 
OFFICE OF 

 
INSPECTOR GENERAL 

 
 
 
 
 
 
 
 
MEDIC  ARE ADMINISTRATIVE 

 
L J H :  E
AW  UDGE  EARINGS    ARLY 

 
 
I , 20052006 

MPLEMENTATION  
 
 
 
 
 
 
Daniel R. Levinson 
  
Inspector General 

 
July 2008 
 
OEI-02-06-00110 
 
     
 
 
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.  
   
     
 
 
  E X E C U T I V E   S U M M A R Y
OBJECTIVE 
1. 	  To assess the Office of Medicare Hearings and Appeals (OMHA) use 
of telephone, video teleconference, and in-person hearings to  decide  
Medicare administrative law judge (ALJ) cases during the first  
13 months of operation.   
2. 	  To assess the timeliness of ALJ decisions during the first 13 months 
of operation.    
BACKGROUND 
Medicare beneficiaries,  providers, and suppliers of health care services 
can appeal certain decisions related to their Medicare claims.  
Currently, the Medicare administrative appeals process includes four  
levels. The third level is ALJ hearings.  
Beginning in July 2005, the responsibility for conducting ALJ hearings 
was transferred from the Social Security Administration (SSA) to 
OMHA in the Department of Health and Human Services. The SSA 
hearings were held primarily in person at the 141 Social Security offices 
throughout the country.  Under SSA, there was no timeliness 
requirement for appeal decisions.   In  contrast, OMHA, with four field 
offices, planned to use primarily telephone and video teleconference to 
conduct ALJ hearings.  Further, OMHA faced a new statutory 
requirement that certain cases be decided within 90 days.     
In December 2005, members of Congress wrote to the Office of Inspector 
General (OIG) and requested that we assess the use of telephone, video  
teleconference, and in-person hearings to decide Medicare ALJ cases 
and that we examine the extent to which OMHA is meeting the new 
statutory requirement that it decide certain cases within 90 days.  
Other cases, including those filed prior to the transfer, are not subject to  
the 90-day decision requirement.  The members of Congress  were also 
concerned about whether a heavy reliance on telephone and video 
teleconference hearings might compromise Medicare beneficiaries 
access to the ALJ appeals process. Additionally, a June 2005 
Government Accountability Office study raised concerns about whether 
hearings held via video teleconference are an appropriate substitute for 
in-person hearings.   
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   i 
     
  
E X E C U T I V E   S U M M A R Y   
OMHA uses the Medicare Appeals System (hereafter referred to as the  
appeals system) to manage its caseload.  We based this study on an 
analysis of data from the appeals system for OMHAs first 13 months of 
operation, structured interviews with appellants associated with a 
random sample of cases,  and structured interviews with OMHA staff.  
FINDINGS 
In its first 13 months of operation, OMHA conducted an estimated 
three-quarters  of its  hearings by telephone.   During its first  
13 months of operation, OMHA conducted 78 percent of its hearings by 
telephone, 12 percent by video teleconference, and 10 percent in person.  
Several factors contributed to the high  usage of hearings by telephone.  
Specifically, OMHA staff did not consistently offer hearings by video 
teleconference; when given the choice, appellants often selected  
hearings by telephone over hearings by video teleconference;  and  
OMHA granted in-person hearings only in limited situations. 
Most sample appellants were satisfied with their hearing format.   
Both OMHA staff and sample appellants highlighted specific 
advantages and disadvantages of each hearing format.  Sample 
appellants who had telephone or video teleconference hearings reported  
some communication and technical difficulties with those hearing 
formats. 
Incomplete and inaccurate data  limit OMHAs ability  to manage its  
caseload.  For over 70 percent of the cases that were decided in the first 
13 months of OMHAs operation, there was no indication about which  
parties were the primary appellants.  Moreover, information  about 
appellants was not consistently entered in the system, making it 
difficult for OMHA to appropriately consolidate cases and to track 
frequent users of the appeals process.  In addition, many key  dates in 
the system were inaccurate and many key dates were missing.  Lastly, 
information about the hearing type and format was frequently 
incomplete or incorrect.   
Available data indicate that in its first 13 months of operation,  OMHA  
did not decide a number of its cases in a timely  manner.  We found 
that 15 percent of the cases that had a 90-day requirement and a 
decision date in the appeals system were not decided on time.  On  
average, cases with the 90-day requirement took 82 days to decide.   
Cases without the 90-day requirement took an average of 25 days longer  
to decide.  For cases both with and without the  90-day requirement,  
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   ii   
  
E X E C U T I V E   S U M M A R Y   
delays occurred early in the appeals processfrom the time when 
OMHA received the appeal request to the time when OMHA staff 
scheduled the hearing.   
RECOMMENDATIONS 
Based on the findings in the report, we recommend that OMHA: 
Consistently offer appellants the option of video teleconference. 
OMHA should consistently direct appellants to hearings by video 
teleconference, if available.  To ensure compliance with the regulations, 
OMHA should standardize its scheduling process and document 
whether the ALJ made a determination that video teleconference 
technology was available or whether the hearing request or  
administrative record suggested that a telephone hearing might be 
more convenient for one or more  of the parties.   Further, OMHA should  
encourage staff to identify available video teleconference sites before  
contacting the appellant to schedule  the hearing, when appropriate.  
OMHA should also have standard protocols for making and  
documenting decisions to grant in-person hearings.  
Continue to improve the timeliness of deciding cases with the  
90-day decision requirement.  OMHA should  meet the 90-day statutory 
timeframe for all cases subject to this requirement.  OMHA should  pay 
particular attention to reducing the delays that occur between the time 
when OMHA receives the appeal request and  the time when staff 
schedule a hearing.  OMHA should also ensure that meeting the 90-day 
decision requirement does not cause undue delays for cases without the 
90-day decision requirement.  
Address problems associated with telephone and video 
teleconference hearings.  OMHA should address the problems 
associated  with holding hearings over the telephone and  via video 
teleconference. OMHA should work with its contractors to ensure that 
the video teleconference equipment is set up on time and available for the 
duration of the hearing.  It should  also work to eliminate any technical 
difficulties, such as feedback and poor picture quality.  Finally, OMHA  
should develop strategies for referring to documents in the case files to 
help improve communication between appellants and ALJs during the 
hearings. 
Improve the quality  of the data  in the appeals system.  OMHA should  
ensure that the data problems that we identified have been  addressed.   
Specifically, OMHA should continue to improve the quality of the data 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   iii   
  
E X E C U T I V E   S U M M A R Y   
 
so that it can use the appeals system to better manage its caseload and 
more accurately report on key aspects of the program.  OMHA should 
also continue to refine its data standardization policy and provide any 
necessary training to staff.  Lastly, OMHA should institute regular data 
checks to eliminate invalid entries and instances of missing data.    
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
OMHA concurred with all four of our recommendations based on our  
analysis of its first 13 months of operations. OMHA noted that it had 
previously identified the same findings and recommendations as 
internal areas of concern and has taken measures to address them.    
In response  to our first recommendation, OMHA noted that it has 
implemented a comprehensive training program  for staff involved in 
scheduling hearings to standardize the scheduling process and ensure 
that staff understand the statutory  and regulatory hearing 
requirements.  It also performs random unannounced screenings of the 
scheduling procedures and has modified the appeals system to record 
and track the requested and actual hearing formats.   
In response  to our second recommendation, OMHA stated that it has 
improved its case processing times for the cases subject to the 90-day 
decision statutory timeframe as well  as for the cases not subject to the 
90-day requirement.    
In response  to our third  recommendation, OMHA stated that it has 
taken numerous steps to address technical difficulties associated with 
telephone and video teleconference  hearings.  For example, OMHA  
performed significant software upgrades to its video teleconference  
infrastructure and has in place for staff guidance regarding coordination 
with vendors for real-time resolution of technical issues and extensions  
of hearing duration.   
In response  to our fourth recommendation, OMHA stated that it has 
instituted additional business rules and recurring data checks for logic 
in the appeals system. OMHA has also implemented a data 
standardization policy and training on the new requirements.  OMHA is 
also examining inaccuracies in many date fields and will include date 
validation changes in upgrades to the appeals systems later this year.   
We recognize OMHAs efforts to address these issues and encourage it 
to continue to make progress in these areas.   
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS :   EARLY  IMPLEMENTATION,   20052006   iv   
 
 
  T A B L E   O F   C O N T E N T S  
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  i
  
 
 
I N T RO DUC T IO N  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1 
  
 
 
F I N D IN G S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11 
  
Three-quarters of hearings were held by telephone. . . . . . . . . . . . . . . .  11 
  
Most sample appellants were satisfied with their hearing format  . . . .  13 
  
Incomplete and inaccurate data limit OMHAs ability to manage its                
caseload  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15 
  
OMHA did not decide a number of its cases in a timely manner. . . . . .  16
  
 
 
R E C O MMEN D A T ION S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20 
  
 
 
APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23 
  
  A:  Medicare Administrative Appeals Process. . . . . . . . . . . . . . . .  23 
  
  B:  Number of Sample Cases, by Stratum. . . . . . . . . . . . . . . . . . .  26 
  
  C:	  Inaccuracies in Hearing Format Data . . . . . . . . . . . . . . . . . . .  27 
  
  D:	  Confidence Intervals for Selected Estimates. . . . . . . . . . . . . .  28 
  
  E: 	Cases That Failed to Meet 90-Day Requirement,  
                               
  by Quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29 
  
  F:	  Average Number of Days to Decision. . . . . . . . . . . . . . . . . . . .  30 
  
  G:	  Timeliness of Cases Without a 90-Day Requirement  . . . . . . .  31 
  
  H:	  OMHA Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32 
  
 
 
A C K NO WL E D G M E N T S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35 
  
   
     
  
  I N T R O D U C T I O N
OBJECTIVE 
1. 	  To assess the Office of Medicare Hearings and Appeals (OMHA) use 
of telephone, video teleconference, and in-person hearings to  decide  
Medicare administrative law judge (ALJ) cases during the first  
13 months of operation.   
2. 	  To assess the timeliness of ALJ decisions during the first 13 months 
of operation.    
BACKGROUND 
Medicare beneficiaries,  providers, and suppliers of health care services 
can appeal certain decisions related to their Medicare claims.  
Currently, the Medicare administrative appeals process includes four  
levels. The third level is ALJ hearings.  
Beginning in July 2005, the responsibility for conducting ALJ hearings 
was transferred from the Social Security Administration (SSA) to 
OMHA in the Department of Health and Human Services (HHS).  The 
SSA hearings were held primarily in person at the 141 Social Security 
offices throughout the country.  Under SSA, there was no timeliness 
requirement for appeal decisions.   In  contrast, OMHA, with four field 
offices, planned to use primarily telephones and  video teleconferences to  
conduct ALJ hearings.  Further, OMHA faced a new statutory 
requirement that certain cases be decided within 90 days.  
In December 2005, members of Congress wrote to the Office of Inspector 
General (OIG) and requested that we assess the use of telephone, video  
teleconference, and in-person hearings to decide Medicare ALJ cases 
and that we examine the extent to which OMHA is meeting the new 
statutory requirement that it decide certain cases within 90 days.  
Other cases, including those filed prior to the transfer, are not subject to  
the 90-day decision requirement.  The members of Congress  were also 
concerned about whether a heavy reliance on telephone and video 
teleconference might compromise Medicare beneficiaries access to the 
ALJ appeals process.  Additionally, a June 2005 Government 
Accountability Office (GAO) study raised concerns about whether 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   1   
  
II NN TT RR OO DD UU CC TT II OO NN    
  
hearings held via video teleconference are an appropriate substitute for 
in-person hearings.1   
Four-Level Medicare Administrative Appeals Process 
There are four levels of the Medicare administrative appeals process  
within HHS. For Medicare Parts A and B, the four levels are: 
   Level One: Affiliated Contractor redeterminations 
   Level Two: Qualified Independent Contractor reconsiderations 
   Level Three: ALJ hearings 
   Level Four:  Medicare Appeals Council hearings  
If appellants disagree with the outcome of the prior level of appeal, they 
may take their case to the next level. For example, if an appellant is not 
satisfied with the reconsideration by the Qualified Independent 
Contractor, the appellant may request a hearing before an ALJ. The 
ALJ independently reviews the case and makes a decision in accordance 
with applicable laws and regulations. After exhausting the four levels 
of the administrative appeals process, an appellant may file an action in 
a Federal District Court. Appendix A provides an overview of each of 
the four levels of the administrative appeals process for Medicare Parts  
A and B. 
Different procedures exist for appealing determinations under Medicare 
Parts C (the Medicare Advantage program) and D (the Medicare 
prescription drug benefit). For Level One and Level Two appeals, the  
entities that decide the appeals for Medicare Parts C and D are different 
from the entities that decide the appeals for Medicare Parts  A and B.   
However, for Level Three, the ALJ is responsible for deciding all 
Medicare appeals, including Medicare Parts C and D appeals.2  
OMHA 
The Medicare Prescription Drug, Improvement, and Modernization Act of  
2003 (MMA) required SSA to transfer the responsibility for Medicare ALJ 
hearings to HHS.3 On June 23, 2005, HHS established OMHA to conduct 
these hearings.4    
 
1 GAO, Medicare: Concerns Regarding Plans to Transfer the Appeals Workload  from SSA 

to HHS Remain, GAO-05-703R, June 30, 2005. 

2 42 CFR  422.600 (regarding right to an ALJ hearing under Medicare Part C);
 
 42 CFR  423.610 (regarding right to an ALJ hearing under Medicare Part D).
 
3 Medicare Prescription Drug, Improvement, and Modernization Act of 2003, 

P.L. No. 108-173,  931.

4 70 Fed. Reg. 36386 (June 23, 2005). OMHA began operations on July 1, 2005. 

OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   2   
  
I N T R O D U C T I O N   
 
When HHS established OMHA, it planned to use primarily telephones and 
video teleconferences for ALJ hearings.  In a March 2004 report to 
Congress, HHS described its plan to expand the use of telephone and video 
teleconference hearings, stating that the plan would allow OMHA to 
conduct them more efficiently.5  The report stated that, unlike SSA  
disability hearings where in-person hearings may be needed  to evaluate 
credibility,  Medicare hearings are less dependent on the physical presence 
of the appellant and other witnesses.   
Currently, OMHA has offices in four cities around the country.  OMHAs  
central office and one of its field offices are located in Arlington, 
Virginia; it has three other field  offices in Cleveland, Ohio; Miami, 
Florida; and Irvine, California.  Staff at the field  offices are responsible 
for scheduling and conducting hearings.   
Federal Requirements  
Section 521 of the Medicare, Medicaid, and State Childrens Health 
Insurance Program Benefits Improvement and Protection Act of  
2000 (BIPA) amended section 1869 of the Social Security Act (the Act) to 
establish a uniform process for handling Medicare Parts A and B 
appeals and to impose shorter timeframes for the processing of appeals.6   
The Centers for Medicare & Medicaid Services promulgated  regulations 
to address the changes to the appeals process required by the BIPA and  
the MMA.7    
Section 1869(d)(1)(A) of the Act, as amended by the BIPA, generally 
requires that ALJs issue a decision about a case within 90 days of the 
date that the appeal request was filed.8 The 90-day requirement applies 
to all Medicare Parts A and B appeals received after the 
implementation of the BIPA, unless the appellant waives the right to  
have the case decided within 90 days9 or OMHA approves a request for  
an in-person hearing.10  The 90-day requirement does not apply to 
Medicare Parts C or D appeals.  An appellant can request an ALJ 
 
5 The Secretary of HHS and the Commissioner of SSA, Report to Congress:  Plan for the 

Transfer of Responsibility for Medicare Appeals, March 2004. 

6 Medicare, Medicaid, and State  Childrens Health Insurance Program Benefits 

Improvement and Protection Act of 2000, P.L. No. 106-554  521. 

7 70 Fed. Reg. 11420 (Mar. 8, 2005), as amended at 70 Fed. Reg. 37700 (June 30, 2005). 

8 42 U.S.C.  1395ff(d)(1)(A); 42 CFR  405.1016(a).
  
9 42 U.S.C.  1395ff(d)(1)(B); 42 CFR  405.1036(d). 

10 42 CFR  405.1020(i)(4).  In addition, cases that are escalated to OMHA because the 

prior level did not complete the reconsideration within the federally required timeframe are 

not subject to the 90-day decision  requirement.  See 42 CFR  405.1016(c). 

  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   3   
  
II NN TT RR OO DD UU CC TT II OO NN    
hearing by filing a written request within 60 days of receiving a Level 
Two decision.11   The ALJ must mail or serve a notice of hearing at least 
20 days before the hearing.12    
Federal regulations state that the ALJ will direct that the appearance of 
an individual be conducted by video teleconference, if the ALJ finds that 
video teleconferencing technology is available to conduct the  
appearance.13 The regulations go on to state that the ALJ may also 
offer to conduct a hearing by telephone if the hearing request or  
administrative record suggests that a telephone hearing may be more 
convenient for one or more  of the parties. If video teleconference  
technology is not available or if special or extraordinary circumstances 
exist, the ALJ may determine that an in-person  hearing should be 
conducted.   Moreover, if a party objects to a hearing via telephone or 
video teleconference, the party may file a written request for an 
in-person hearing, which the ALJ may grant if there is good cause.14 To  
determine whether good  cause exists, the ALJ considers the partys 
reason for requesting the change, the facts supporting the request, and  
the impact on the efficient administration of the hearing process.15 For 
example, an ALJ may find that there is good cause for an in-person 
hearing if the party is close to and able to go to  an OMHA field office or  
if the case presents complex, challenging, or novel presentation issues.16   
In certain circumstances, the ALJ may make an on-the-record decision 
that is based only on the case file and does not require a hearing.17   
Medicare Appeals System 
The Medicare Appeals System (hereinafter referred to as the appeals 
system) was designed to create a unified case tracking system across the 
 
11 42 CFR  405.1014(b)(1) (pertaining to Medicare Parts A and B). Similar requirements 

exist for Medicare Part C at 42 CFR  422.602(b) and for Medicare Part D at 

42 CFR  423.612(b).

12 42 CFR  405.1022(a).

13 42 CFR  405.1020(b) (pertaining to Medicare Parts A and B). Federal regulations state 

that the time and place for ALJ hearings for Medicare Parts C and D must be set in 

accordance with 42 CFR  405.1020. 42 CFR  422.602(b) (regarding Medicare Part C); 

42 CFR  423.612(b) (regarding  Medicare Part D).

14 42 CFR  405.1020(i).

15 42 CFR  405.1020(g).

16 See 70 Fed. Reg. 11420, 11457 (Mar. 8, 2005) (preamble discussion regarding good cause 

for in-person hearings).
   
17 42 CFR  405.1038. The ALJ can issue an on-the-record decision if the decision is fully 

favorable, if  all parties wish to forgo a hearing,  or if an appellant who lives outside the 

United States does not inform the ALJ that the appellant wants to appear and  no other 

parties wish to  appear. 

OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   4   
  
I N T R O D U C T I O N   
 
four levels of administrative appeal once the ALJ function was 
transferred from SSA to HHS.  The appeals system stores and 
facilitates the transfer of case-specific data.  In September 2003, CMS 
contracted with CGI Federal to develop and maintain the appeals 
system. Currently, Levels Two and Three of the appeals process use the 
appeals system.   
The appeals system includes a variety of case-specific information that 
OMHA uses to manage its caseload.  It includes information  such as the 
type of service being contested, the hearing format, the date when 
OMHA received the appeal request, and the date when the decision  
letter was sent to the appellant.   It also lists the parties involved with 
each case; indicates which party is the primary appellant; and specifies 
whether each party is a Medicare provider or supplier, a beneficiary, or 
a State Medicaid organization.18  OMHA staff can input new data into 
the appeals system regarding Level Three of the appeals process.   
Related Work 
In January 2002, OIG released a report that analyzed the potential 
impact of the BIPA on the Medicare administrative appeals process.19   
OIG found that the former process  for ALJ appeals was backlogged and 
recommended modernizing the appeals process.   It also recommended  
that HHS develop a training program for all reviewers at all levels of 
appeals to ensure common knowledge, understanding, and information 
about the appeals process.  HHS concurred with the recommendations.   
In a report released in October 2004, GAO evaluated the transfer plan 
developed by HHS and SSA.20 GAO found that the plan generally 
addressed all of the elements mandated by the MMA, such as a 
timetable, cost projections, and information about the development of 
the appeals system. However, the plan omitted important information,  
such as specific transition milestones and details related to the 
feasibility of using video teleconferences to provide access to ALJs.  
 
18 These organizations serve as appointed  representatives for State Medicaid agencies.     

A State Medicaid agency  may appeal services provided to beneficiaries who are dually 
 
eligible for Medicaid and Medicare to determine whether Medicare is liable for the payment 

rather than the Medicaid program. 

19 OIG, Medicare Administrative  Appeals:  The Potential Impact of BIPA,            
         
OEI-04-01-00290, January 2002.  

20 GAO, Medicare:  Incomplete Plan to Transfer Appeals Work Load from SSA to HHS 

Threatens Service to Appellants, GAO-05-45, October 4, 2004. 

  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   5   
  
II NN TT RR OO DD UU CC TT II OO NN    
In a follow-up report released in June 2005, GAO highlighted the 
challenges of ensuring sufficient availability of hearings given the 
limited access to in-person hearings.21 GAO also noted that the hiring  
and training timetables for ALJs and support staff were ambitious and 
that HHS continued to face challenges such as the implementation of 
the appeals system. 
In addition, OIG is currently conducting an evaluation of Level Two of 
the appeals process. That evaluation will assess the extent to which 
Qualified Independent Contractors met timeliness, correspondence, and  
data entry requirements for reconsiderations processed during the 
initial months of operation. 
METHODOLOGY 
We based this study on several sources: (1) an analysis of data from the 
appeals system for the first 13 months of OMHAs operation, 
(2) structured telephone interviews  with appellants associated with a 
random sample of cases,  and (3) structured interviews with key OMHA 
management staff and a randomly selected sample of OMHA field office  
staff. 
Data From the Appeals System 
We requested and reviewed the most recent data then available from 
the appeals system. These data were for the first 13 months of OMHAs 
operation, July 1, 2005, through July 31, 2006, and included 
20,783 cases. The data were organized by case. Each case may have 
multiple claims. Each case may also have multiple parties, one of whom 
may be identified as the primary appellant. We met with OMHA staff 
on several occasions to ensure that we had a thorough understanding of 
the data and the way in which OMHA used the information. 
Structured Telephone Interviews  With Sample Appellants 
We selected a random sample of cases and, between January and March 
2007, conducted structured telephone interviews with the primary 
appellant associated with each. If the primary appellant was not 
identified in the appeals system, we  contacted one of the parties and 
asked him or her to identify the primary appellant. We selected  our 
sample based on case as opposed to primary appellant for several 
reasons: the data were organized by case, each  party could be 
 
21 GAO, Medicare: Concerns Regarding Plans to Transfer the Appeals Workload  from SSA 
to HHS Remain, GAO-05-703R, June 30, 2005. 
OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   6   
  
I N T R O D U C T I O N   
 
associated with multiple cases, and the appeals system did not always 
indicate which party was the primary appellant.  
As a first step, we identified 6,203 cases in the appeals systems that 
had had a hearing.22  A case may not have had a hearing primarily 
because it was decided through an on-the-record decision, it was 
consolidated with similar cases, or it was not completely processed at 
the time of our review.    
We then selected a stratified random sample of 270 cases from these 
6,203 cases.  We stratified the sample based on the hearing format 
recorded in the appeals system to ensure that we interviewed 
appellants who used  each of the hearing formats offered by OMHA.  
Our four strata were telephone, video teleconference, in-person, and an 
unidentified hearing format.  We included a stratum for unidentified 
hearing format because 2,173 of the 6,203 cases did not have a hearing 
format recorded in the appeals system.  Table 1 shows the number of 
cases we selected from each stratum.  
  Table 1: Population and Sample Size, by  Stratum  
  Number of Cases With   Number of Cases With 
Stratum 
Hearings  in the Population  Hearings in Our Sample 
Telephone  3,132  70 
Video Teleconference   464  75 
In Person  434  75 
Unidentified  2,173  50 
  Total  6,203  270 
 
Source:  OIG analysis of  the Medicare Appeals System, 2007.   
We excluded 16 sample cases from our analysis.  At the time of our 
review, OIG was conducting investigations related to appellants 
associated with 11 of these cases.  The other five cases were excluded  
because they had been incorrectly  recorded in the appeals system as 
having had a hearing. 
We successfully contacted the primary appellants associated with 225 of 
the remaining 254 cases, for a response rate of 89 percent.  We were 
unable to contact the primary appellants or the primary appellants 
chose not to participate for the remaining 29 cases.  Again, if the 
appeals system identified a primary appellant, we contacted that party.  
 
22 This number includes appeals under Medicare Parts A, B, C, and D.   
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   7   
  
II NN TT RR OO DD UU CC TT II OO NN    
Otherwise,  we contacted one of the parties associated with the case and  
asked him  or her to identify the primary appellant. Appendix B 
describes this information by stratum.    
In total, we conducted structured interviews with the 131 appellants 
associated with the 225 cases. Twenty-two appellants were associated 
with more than one sample case, ranging from 2 to 35 cases. Because 
the appeals system was missing data on hearing format for a large 
percentage of the sample cases, we asked all appellants which format(s) 
they had used. Based on their responses, we found that in addition to 
lacking some data, the appeals system also had incorrect data on 
hearing format. See Appendix C for detailed information about the 
inaccuracies of the hearing format data. We discuss this issue further 
in the findings section of the report.  
We asked all of the appellants about their experiences with scheduling 
their hearings, about the information they received regarding the three 
hearing formats, and about the advantages and disadvantages of the  
different formats. Three sample appellants had used two different 
hearing formats. For these, we included their responses in our analysis  
of each of the formats.   
Structured Interviews  With OMHA Staff 
We conducted structured in-person interviews with key OMHA staff. 
We interviewed the Chief ALJ and the Executive Director of OMHA. 
We also interviewed the Managing ALJ and the Hearing Office Director 
at each of the four field offices. In addition, we interviewed 12 randomly 
selected ALJ teams (3 from each of the four field offices) out of 49 ALJ 
teams. Each ALJ team included an ALJ, an attorney, a hearing clerk, 
and a paralegal. For the purposes of this report, we refer to these 
respondents as OMHA staff. 
Our interview questions focused primarily on OMHAs processes for 
scheduling and conducting hearings, including how they selected the 
hearing format. We also asked about any obstacles that they 
experienced in scheduling and holding hearings. Finally, we asked 
about advantages and disadvantages of each of the hearing formats. We 
conducted these interviews between May and July 2006. 
Data Analysis 
We projected the results from our 225 sample cases to the population of 
OMHA cases that had a hearing to estimate: (1) the percentage of  
hearings conducted by telephone, by video teleconference, and in person; 
and (2) the percentage of hearings by appellant type. We used the  
OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   8   
  
III NNN TTT RRR OOO DDD UUU CCC TTT III OOO NNN     
   
sample of cases rather than the population of cases to determine the 
percentage of hearings conducted by telephone,  by video teleconference,  
and in person because some data in the appeals system were inaccurate 
and some were missing from the system. Similarly, we used the sample 
of cases rather than the population of cases to determine the percentage 
of hearings  by appellant type because the appeals system typically did 
not indicate which party was the primary appellant. We therefore used  
standard statistical formulas for producing estimates from a stratified 
random sample to arrive at these estimates. Appendix D provides the 
confidence intervals for  these estimates. 
In addition, we analyzed the data from the appeals system to  assess the 
timeliness of ALJ decisions. We analyzed the cases that were subject to  
the 90-day requirement (6,085 cases) separately from the cases that 
were not subject to this requirement (14,682 cases).23 As previously 
mentioned, the 90-day decision deadline applies to all Medicare Parts A 
or B appeals received after the implementation of the BIPA, unless the  
appellant signs a waiver relinquishing the right to have the case 
decided within 90 days, OMHA approves a request for an in-person 
hearing, or  other special circumstances exist. The 90-day requirement 
does not apply to Medicare Parts C or D appeals. 
To conduct our analysis, we compared the date when OMHA  received  
the appeal request to the date when OMHA sent a decision letter to the 
appellant. We did not include the cases that did not have decision letter 
dates. A case may not have this date because it was not decided or  
because the date had not been recorded in the appeals system. Because 
data were missing from  other fields, we could not assume that the case 
had not been decided. Lastly, we included any allotted extension days 
plus a 3-day grace period to cover any holiday weekends.24      
Limitations  
We limited our results about appellants satisfaction with the different 
hearing formats to sample appellants. We could not generalize our 
results to all appellants because our unit of analysis was a case, rather 
 
23 Six of the cases subject to the 90-day requirement were excluded  from the analysis 
because the decision date in the appeals system  was recorded erroneously as being earlier 
than the date the appeals request was received. Ten of the cases not subject to the 90-day  
requirement were excluded for the same reason. 
24 The regulations provide for extension days in cases in which the hearing is postponed at 
the request of the appellant or in certain other circumstances, such as a party requesting 
discovery from another party. See 42 CFR  405.1020(h) and 405.1037(f). 
OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   9   
  
I N T R O D U C T I O N   
 
than an appellant. As mentioned,  data limitations in the appeals 
system did not allow us to sample by appellant.  We discuss other 
limitations of the appeals system data in the findings section of the 
report. 
Standards    
This study was conducted in accordance with the Quality Standards for 
Inspections issued by the Presidents Council on Integrity and 
Efficiency and the Executive Council on Integrity and Efficiency.  
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   10   
  
  F I N D I N G S  
During its first 13 months of 
In its first 13 months of operation, OMHA 
operation, OMHA conducted   
conducted an estimated three-quarters  
78 percent of its hearings by 
of hearings by telephone  
telephone, 12 percent by video 
teleconference, and 10 percent  
in person.  In 78 percent of the cases that had hearings, the primary 
appellants were Medicare providers or suppliers.  Another 15 percent of  
these cases had primary appellants who were Medicare beneficiaries, 
and 8 percent were pursued by State Medicaid organizations.25  
Several factors contributed to the high  usage of hearings by telephone.  
Specifically, OMHA staff did not consistently offer hearings by video 
teleconference; when given the choice, appellants often selected  
hearings by telephone over hearings by video teleconference;  and  
OMHA granted in-person hearings only in limited situations. 
OMHA staff did not consistently offer  video teleconference  
OMHA staff explained that, generally, they decide the hearing format 
when they contact the primary appellant to schedule the hearing.  Five 
of the twelve ALJ teams that we interviewed stated that they directed 
appellants to a video teleconference  hearing as the default option, 
whereas five other teams said that they offered both video 
teleconference and telephone hearing options at the same time.  The two 
remaining teams discussed the process more generally. All of the teams 
noted that appellants preferences are an important factor in deciding 
the hearing format. 
Staff further explained that they do not have a standardized script for 
discussing the format options with the primary appellant or a standard 
way of documenting how the format decision is  made.  They noted that 
OMHA uses two private companies that have video teleconference sites 
around the country. They can locate the 120 sites from one of the 
companies online but need to call the other company to identify specific 
video teleconference sites.  Staff reported varying procedures for how 
and when they identify available video teleconference sites for an 
upcoming hearing.   
In addition, sample appellants reported that OMHA staff promoted  
telephone hearings over the other formats and did not always provide 
video teleconference hearings as an option.  Specifically, 35 percent   
 
25 These numbers do not add to 100 percent because of rounding.  
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   11    
  
F I N D I N G
  S  
(46 of 131) of sample appellants reported that they were never offered 
video teleconference as  an option.  Three appellants reported that 
OMHA also promoted the telephone  format by sending a letter stating 
that the hearing would be conducted over the telephone.  It was not 
possible to determine the extent to  which staff directed appellants 
toward video teleconference hearings in accordance with the 
regulations.  OMHA does not currently require staff to document how 
the hearing format was decided, including documenting whether video 
teleconference technology was available or whether the hearing request 
or administrative record suggested that a telephone hearing may be 
more convenient for one or more  of the parties. 
Appellants often selected the telephone over video teleconference 
For just over half of the hearings, appellants reported  being offered both 
the telephone and video teleconference formats.   Given the choice  
between the two formats, appellants selected the telephone format for  
over 75 percent of these hearings.  OMHA staff and sample appellants 
commonly noted that appellants preferred the telephone format because 
it is convenient and cost-effective.    
OMHA granted in-person hearings in limited situations  
OMHA staff explained that in-person hearings are granted only in 
limited situations. Most sample appellants reported being granted  
in-person hearings because they were located near one of the four  
OMHA field offices or because they were willing to travel to one of the 
field offices at their own expense.  OMHA staff further indicated that 
they did not have standardized protocols or written criteria for making 
and documenting decisions about in-person hearings.  
Several sample appellants noted that they would have preferred to have  
their hearing in person, as opposed to by video teleconference or  
telephone. Specifically, one-fifth of sample appellants who had a 
telephone or video teleconference hearing (22 of the 102) would have 
preferred to have their hearing in person.  Most  of these appellants  
(14 of 22), however, did not request an in-person hearing because of the 
time, travel, or cost involved in going to an OMHA field office or because 
they were not aware that an in-person hearing was available.   
 
 
 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   12   
  
F I N D I N G S  

 
Although appellants were not 
Most sample appellants were satisfied  
consistently offered all hearing 
with their hearing format 
format options, most sample 
appellants reported being 
satisfied with the format of their hearings.  Sample appellants and 
OMHA staff also highlighted specific advantages and disadvantages of 
each hearing format.    
Almost all of the sample appellants who had telephone hearings were 
satisfied with that format   
Eighty of the eighty-four sample appellants who had a hearing over the 
telephone were satisfied with that format.  Over  80 percent of these 
appellants stated that having their hearings over the telephone was 
convenient and saved them time and money because they did not have 
to travel to  another location.  Several appellants who were providers 
noted that the telephone option enabled them to have full access to their  
files during the hearing.  A number of appellants explained that having 
their hearing in a familiar setting, such as their home or office, was an 
advantage. 
In addition, OMHA staff stated that holding hearings over the 
telephone is efficient and cost-effective.  They explained that telephone 
hearings are easier to schedule than other types of hearings, partly 
because multiple parties can participate from different locations.  They  
also generally noted that the telephone is the most inexpensive and  
convenient way by which to hear cases.   
Sample appellants and OMHA staff both noted several disadvantages of 
telephone hearings.  Twenty-five appellants noted that communication 
suffered because of the lack of face-to-face contact with the ALJ, and  
31 appellants reported difficulties pointing out specific evidence in the 
case files.  In addition, five appellants said that they did not have the 
same documents as the ALJ to refer to during the hearing.  Finally, 
several appellants and OMHA staff also reported  that they experienced 
technical difficulties with the telephone, such as hearing an echo or 
having the call dropped. 
Most of the sample appellants whose hearings were held via video 
teleconference were satisfied with that format   
Fourteen of the twenty sample appellants who had a hearing via video 
teleconference were satisfied with that format.  Over half of these 
sample appellants reported that being able to see the ALJ made 
communication easier.   They commonly cited benefits such as the 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   13   
  
F I N D I N G
  S  
 
convenience and the time and cost savings resulting from not having to 
travel to an in-person hearing.   
Based on our sample, 13 of the 20 appellants had their hearings at video 
teleconference sites owned by one company.   The remaining appellants had 
their hearings either at Government buildings or at private sites.  Over 
half of the sample appellants traveled less than 15 miles to their hearing 
site. The remaining sample appellants traveled less than 75 miles.    
Sample appellants and OMHA staff identified several disadvantages of 
conducting hearings via video teleconference.   Nine of the twenty sample  
appellants reported technical difficulties, such as feedback, a lag in audio 
communication, difficulty setting up equipment, and poor picture quality.   
A few other appellants were unable to see or hear the other participants 
for some portion of the hearing.  Additionally, two appellants reported that 
not enough time was scheduled for their hearings.  OMHA staff also noted 
a few instances in which the equipment shut down before the hearing 
ended or the equipment had not been set up  on time.    
Almost all of the sample appellants who had in-person hearings  were 
satisfied with that format  
Twenty-eight of the thirty sample appellants who had an in-person 
hearing were satisfied with that format.  Over three-quarters of these  
appellants noted that face-to-face contact with the ALJ was an 
advantage.  Specifically, attending the hearings in person enabled  
appellants to more easily refer to  evidence in the case files and to 
provide visual demonstrations, such  as how to use certain medical 
equipment. OMHA staff similarly reported that in-person hearings 
allowed for an easy exchange of documents, which can be particularly 
helpful for hearings that involve a large number of claims.   
Sample appellants highlighted several disadvantages of this format.  
Almost half of the 30 sample appellants who had in-person hearings 
reported that these hearings were less convenient because of the travel  
time and the cost associated with having to go to an OMHA field office.   
In fact, over one-third of  these appellants (13 of 30) had to travel more 
than 75 miles to the hearing site. 
 
 
 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   14   
  
F I N D I N G S  

Incomplete and inaccurate data limit   OMHA relies on the appeals 
OMHAs ability to manage its caseload   system as the primary 
mechanism to collect data about 
the program and to manage its caseload.  Based on our review of the 
data for the first 13 months of OMHAs operation, we found  that 
information in the system was frequently inaccurate and that some 
information was missing from the system.   
We found that information about the primary appellant was often 
incomplete and inaccurate.  For over 70 percent of the 11,778 cases that 
had a decision, there was no indication about which party was the 
primary appellant.  Additionally, when we compared the data from our  
sample appellants to the data in the system, we found that, for  
13 percent of our sample cases, the primary appellant was not listed as 
one of the parties in the appeals system.    
Moreover, information about appellants was not consistently entered in 
the system.  For example, one supplier that had almost 400 cases in the 
system was identified in a variety of ways:  it had a standard Unique 
Physician Identification Number (UPIN) for 26 percent of its cases but 
no UPIN or an incomplete UPIN for 74 percent of its cases.26   These 
inconsistencies make it difficult for OMHA to appropriately consolidate 
related cases and to track frequent users of the appeals process.   
Also, many key dates in the system were inaccurate and many key dates 
were missing from the system.  Specifically, the date field that indicates 
when OMHA sends letters to appellants acknowledging that their 
requests were received was missing for 71 percent of the cases that had 
been decided.  The dates when OMHA requested and received the case 
file from the previous level of appeals were also missing for over  
three-quarters of the cases.  Furthermore, for over 20 percent of the  
cases, at least one date was out of chronological order. 
Finally, as mentioned earlier, information about the hearing type and 
format was frequently incomplete or incorrect.   Most notably, there was  
no information about whether there was a hearing or an on-the-record  
decision for almost one-third of the decided cases.  For over a third of 
the cases that had a hearing, there was no information about whether it 
was conducted by telephone, by video teleconference, or in person. In 
addition, when we compared the responses from our sample  appellants, 
 
26 We identified the cases for this supplier by  matching UPINs, as well as the business 
name, address,  and phone number, which were also not recorded consistently in the system.  
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   15   
  
F I N D I N G S  
 
we found that the format for 11 percent of their hearings was incorrectly 
identified in the appeals system. In these cases, the system most 
commonly indicated that the hearing was in person when it actually 
occurred  over the telephone.  See Appendix C for more details. 
Subsequent to our analysis of the data, OMHA staff explained that they 
have worked with the contractor to  continually update the system and 
to improve the quality of the data.  They noted that they modified many 
of the data fields, including those related to identifying the primary 
appellant and processing dates.  In addition, they developed an internal 
data standardization policy that provides staff guidance on the 
definitions and use of each data field to promote more consistent data 
entry. 
 
Available data indicate that in its  
During its first 13 months of operation, 
first 13 months of operation,  
OMHA received 6,085 cases that were 
OMHA did not decide a number of   required to  be decided within 90 days.27   
its cases in a timely  manner  OMHA received an additional  
14,682 cases that were not required to 
be decided within 90 days. 
Fifteen percent of the cases that had a 90-day decision requirement and a 
decision date in the appeals system were not decided on time    
Of the 6,085 cases that were subject to the 90-day decision requirement, 
3,278 had a decision date recorded in the appeals system.  On average, 
OMHA decided these cases in 82 days.  As shown in Table 2 on the next 
page, 15 percent of these cases (501) were not decided within 90 days.   
 
 
 
 
 
27 This requirement applies to cases that were received after the implementation  of the 
BIPA that pertain to Medicare Parts A or B.  It does not apply if OMHA approves a request 
for an in-person hearing, if the appellant signs a waiver  relinquishing the right to have the  
case decided within 90 days, and in other special circumstances such as when a case is 
escalated to the ALJ level because the prior level did not complete the reconsideration 
within the federally required timeframe.  Furthermore, it does not apply to Medicare  
Parts C or D cases.   
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   16   
  
F I N D I N G S  

 
 
Table 2: Timeliness of Cases With a 90-Day Decision Requirement 
  Number of Cases 
Cases With a Decision Date in  Appeals System (N=3,278) 
     Decided within 90 days  2,777 
     Not decided  within 90 days   501 
Cases Without a Decision Date in  Appeals System (N=2,807) 
     In appeals system for longer than 90 days  1,180 
     Not in the appeals system for 90 days  1,627 
Total Number of Cases With a 90-Day  Decision Requirement   6,085 
Source:  OIG analysis of  the Medicare Appeals System, 2007.   
 
In addition, 2,807 cases that had a 90-day decision requirement did not 
have a decision date recorded in the appeals system.  Of these, 
1,180 cases had been in the system longer than 90 days, indicating that 
OMHA either had not decided these cases within 90 days or had not 
recorded the decision dates in the appeals system. The remaining 
1,627 cases did not have a decision date but had not been in the appeals 
system for 90 days.   
The percentage of  cases with a decision date that were decided within 
the 90-day timeframe increased during the first four quarters of 
OMHAs operation.  Notably, 37 percent of the cases received by OMHA 
in its first quarter of operation failed to meet the 90-day decision 
requirement. In comparison, 10 percent of the cases that OMHA 
received in its fourth quarter of operation failed to meet the 90-day 
requirement.  See Appendix E for an analysis by quarter.   
In addition, the average number of days that OMHA took to decide  
these cases differed by field office and by size of the case.  Among the 
four OMHA  field offices, the average number of days varied from  
59 to 88. Cases with 10 or more associated claims took an average of  
95 days, compared to 82 days for cases with only one associated claim.  
See Appendix F for additional information about the average number of 
days to decision. 
Cases without the 90-day  decision requirement took longer to decide 
A total of 14,682 cases were not subject to the 90-day decision 
requirement.  About 90 percent of these cases were Medicare   
Parts A or B cases; the remaining cases were Parts C or D cases.  
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   17   
  
F I N D I N G S  
Almost all of the Parts A and B cases (94 percent) were submitted prior 
to the implementation of the BIPA.   
Of the 14,682 cases, 8,500 had a decision date in the appeals system.   
Of these, 45 percent took longer than 90 days to decide, and 12 percent 
took longer than 6 months to decide.  On average, these cases were  
decided in 107 days, about 25 days longer than the cases that had a  
90-day requirement. The other 6,182 cases did not have a decision date 
recorded in the appeals system.  Approximately 35 percent of these 
cases had been in the appeals system longer than 6 months.   
On average, the Parts C and D cases without the 90-day decision 
requirement were decided in 82 days, the same as the cases with a  
90-day decision requirement. In contrast, the Parts A and B cases 
without the  90-day decision requirement were decided,  on average, in 
110 days. See Appendix G for more information about the cases that 
were not subject to the 90-day requirement.  
Delays occurred early in the appeals process   
For cases both with and without a 90-day decision requirement, delays 
occurred  early in the appeals process.  As shown in Figure 1 below, for 
the 6,203 cases that had a hearing, OMHA took an average of 66 days to 
schedule a hearing from the time that it received the appeals request.28   
The next stagefrom scheduling the hearing to  the completion of the 
hearingtook 29 days, on average.  Finally, the last stage, from the 
completion of the hearing to mailing the decision letter to the appellant, 
took an average of 19 days.  Other than the 90-day decision requirement 
and the requirement that the notice of hearing be sent at least 20 days 
before the hearing, there are no other Federal requirements regarding 
the timeline for processing appeals requests.   
 
 
Figure 1: Average Number of Days To Complete Key Steps in 
the Appeals Process 
 
66 days  29 days  19 days 
 
  Request  Scheduling  Hearing  Decision 
Received  Completed  Completed  Letter 
 
Source:  OIG analysis of  the Medicare Appeals System, 2007.  
 
28 The analyses in this section include only the cases that have information on the relevant  
dates in the appeals system.   
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   18   
  
FF II NN DD II NN GG SS  
  
Several appellants noted that the longest time lag in the appeals 
process occurred between filing the appeal and receiving the first 
communication from OMHA, either in the form  of a letter 
acknowledging receipt of the appeal request or a telephone call. Sample 
appellants and OMHA staff suggested that some of the delay is due to  
OMHAs difficulties in obtaining the complete case files from the prior 
level of appeals. 
OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   19   
  
  RR EE CC OO MM MM EE NN DD AA TT II OO NN SS   
 
In the first 13 months of its operation, OMHA conducted most of its 
hearings by telephone rather than by video teleconference or in person.  
Some sample appellants reported that OMHA staff promoted the 
telephone option over the other formats and did not always provide 
video teleconference as  an option.  We also found that most sample 
appellants were satisfied with the format of their hearings, although 
several experienced technical difficulties with telephone and video  
teleconference hearings.     
Additionally, we found that some of the data in the appeals system were 
incomplete  and inaccurate.  This not only limited our ability to analyze 
the data, but also limits OMHAs ability to manage its caseload.  
Finally, based on available data, we found that 15 percent of the cases 
that had a 90-day decision requirement and a decision date in the 
appeals system were not decided on time.  The delays for these cases, as 
well as for cases that did not have a 90-day decision requirement, 
occurred primarily early in the appeals process.  
Based on the findings in this report, we recommend that OMHA: 
Consistently Offer Appellants the Option of Video Teleconference  
OMHA should consistently direct appellants to hearings by video 
teleconference, if available.  To ensure compliance with the regulations, 
OMHA should standardize its scheduling process and document the 
factors that ALJs consider when selecting the hearing format (e.g., 
whether video teleconference technology is available and whether the 
hearing request or administrative record suggests that a telephone 
hearing might be more convenient for one or more of the parties).  
Further, OMHA should encourage staff to identify available video  
teleconference sites before contacting the appellant to schedule the 
hearing, when appropriate.  OMHA  should also have standard protocols 
for making and documenting decisions to grant in-person hearings. 
Continue To Improve the Timeliness of Cases With the 90-Day  Decision 
Requirement 
OMHA should meet the 90-day decision statutory timeframe for all 
cases subject to this requirement.   OMHA should pay particular 
attention to reducing the delays that occur between the time when 
OMHA receives the appeal request and the time when staff schedule a 
hearing.  OMHA should also ensure that meeting the 90-day decision  
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   20   
  
R E C O M M E N D A T I O N S  
requirement does not cause undue  delays for cases without the 90-day 
decision requirement. 
Address Problems Associated With Telephone and Video Teleconference  
Hearings 
OMHA should address the problems associated with holding hearings 
over the telephone and via video teleconference.   OMHA should work 
with its contractors to  ensure that the video teleconference equipment is 
set up on time and available for the duration of the hearing. It should  
also work to eliminate any technical difficulties, such as feedback and 
poor picture quality. Finally, OMHA should develop strategies for 
referring to  documents in the case files to help improve communication 
during the hearing between appellants and ALJs. 
Improve the Quality of the Data in the Appeals System  
OMHA should ensure that the data problems that we identified have 
been addressed.  Specifically, OMHA should continue to improve the 
quality of the data so that it can use the appeals system to better 
manage its caseload and more accurately report  on key aspects of the 
program.  OMHA should also continue to refine its data standardization 
policy and provide any necessary training to staff.  Lastly, OMHA 
should institute regular data checks to eliminate invalid entries and 
instances of missing data.  
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
OMHA concurred with all four of our recommendations based on our  
analysis of its first 13 months of operations. OMHA noted that it had 
previously identified the same findings and recommendations as 
internal areas of concern and has taken measures to address them.    
In response  to our first recommendation, OMHA noted that since OIG 
conducted its analysis, it has implemented a comprehensive training 
program for staff involved in scheduling hearings to standardize the 
scheduling process.  OMHA implemented a train the trainer course so 
that every field office understands the statutory and regulatory hearing 
requirements.  It also performs random unannounced screenings of the 
scheduling procedures to ascertain the effectiveness of the training and  
to institute remedial measures, if necessary.  Additionally, OMHA 
modified the appeals system to record and track the requested and 
actual hearing formats.  
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS :   EARLY  IMPLEMENTATION,   20052006   21   
  
R E C O M M E N D A T I O N S  
 
In response  to our second recommendation, OMHA stated that it has 
improved its case processing times for the cases subject to the 90-day 
decision statutory timeframe.  Further, OMHA noted that a substantial 
number of delays occurred because it was not timely receiving the full 
case files from the previous appeals level.  To address this  concern,  
OMHA reported meeting regularly  and entering into a memorandum of 
understanding with the CMS and its contractors that adjudicate Level 2 
appeals. OMHA also noted that it has reduced its processing times for 
the cases not subject to the 90-day requirement.   
In response  to our third  recommendation, OMHA stated that it has 
taken numerous steps to address technical difficulties associated with 
telephone and video teleconference  hearings.  For example, OMHA  
performed significant software upgrades to its video teleconference  
infrastructure. It also has in place for staff guidance regarding 
coordination with vendors for real-time resolution of technical issues 
and extensions of hearing duration.  Further, OMHA developed a more  
refined process for accurately referencing documents in the case file 
during a hearing. It provided supplemental guidance to ALJs regarding 
the exhibit list that should be prepared and required the exhibit lists to 
be provided to all parties along with the Notice of Hearing or at the 
earliest opportunity before the hearing.   
In response  to our fourth recommendation, OMHA stated that it has 
instituted additional business rules and recurring data checks for logic 
in the appeals system. OMHA has also implemented a data 
standardization policy and training on the new requirements.  In 
addition, OMHA stated that it is examining many date fields identified  
in the report as missing or inaccurate and will include additional date 
validation changes in upgrades to the appeals system later this year.  
OMHA noted that it has established a users group to explore appeals 
system improvements and that its headquarters performs weekly and 
monthly data quality checks and alerts field offices when errors or 
anomalies are identified.   
We recognize OMHAs efforts to address these issues and encourage it 
to continue to make progress in these areas.  The full text of OMHAs 
comments is included in Appendix H. 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   22   
  
  RRA PEE PCC EOO NMM DMM IEEXNN~DDAAA TT II OO NN SS   
 
Medicare  Parts A  and B Administrative Appeals Process  
Below is an overview of the four levels of the Medicare administrative 
appeals process for Medicare  Parts A and B. 
Level One:  Affiliated Contractor Redetermination 
At the first level, an appellant may request a redetermination with an 
Affiliated Contractor (i.e., Medicare carrier or fiscal intermediary) 
within 120 days of receipt of the notice of the initial determination.29   
The redetermination must be made by an individual who was not 
involved in the initial determination.  This individual reviews evidence, 
including previously submitted evidence and any additional evidence 
that the parties submit or the individual obtains, to uphold or reject the  
initial determination.  At both this level and the second level, the 
appellant may contest a denied claim of any dollar amount. Generally, 
the Affiliated Contractor must make a redetermination decision within  
60 days of receipt of the request for redetermination. 
Level Two:   Qualified Independent Contractor Reconsideration  
If the appellant does not agree with the Level One decision, the 
appellant may request a reconsideration with a Qualified Independent 
Contractor (QIC) within 180 days of receipt of the Level One decision.30   
In a manner similar to the Level One review, the QIC reviews historical  
evidence and prior findings, as well as any new evidence submitted by 
the appellant. QICs are bound by national coverage determinations 
(NCDs), the Centers for Medicare &  Medicaid Services (CMS) Rulings, 
and applicable laws and regulations.31  QICs are not bound by local 
coverage determinations (LCDs), local medical review policies (LMRPs), 
or CMS program guidance, such  as program memoranda and  manual 
instructions, but do give substantial deference to those policies, if  
 
29 See generally 42 U.S.C.  1395ff(a)(3) and (5) and 42 CFR  405.940405.958 

(specifying Federal requirements for redeterminations). 

30 42 U.S.C.  1395ff(b)(1)(D)(i).  QICs are a new type of Medicare contractor created to 
 
conduct reconsiderations.  See generally 42 U.S.C.  1395ff(c) and 42 CFR  

 405.960405.978 (specifying Federal requirements for reconsiderations).  

31 42 CFR  405.968(b)(1). 

  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   23   
  
A P P E N D I X   A  
applicable.32   Generally, a QIC has 60 days to make a decision from the  
date when the appellant filed an appeal.33  
Level Three:  Administrative Law  Judge Hearing 
If an appellant wants to contest a Level Two reconsideration, the 
appellant may request a hearing before an administrative law judge 
(ALJ).34  35  This request must be filed within 60 days from the receipt of 
notice of the Level Two reconsideration decision. At this level, the 
minimum amount in controversy is $120.36  ALJs are bound by NCDs, 
but an ALJ may review the facts of  a particular case to determine 
whether an NCD applies to a specific claim for benefits and, if so, 
whether the NCD was applied correctly to the claim.37  ALJs are not 
bound by LCDs, LMRPs, or CMS program guidance, such as program 
memorandums and manual instructions, but ALJs do give substantial 
deference to those policies, if applicable.38  Generally, the ALJ must 
decide the case within 90 days of the date that the appeal request was 
filed. 
Level Four:  Medicare Appeals Council Review   
If the appellant disagrees with the Level Three decision, the  appellant 
may request a review with the Medicare Appeals Council (MAC)39  
within 60 days of receipt of the ALJ hearing decision.40  This is the last 
level of administrative review available to appellants.  MAC may deny a 
request, undertake a review, or remand the case to an ALJ for further 
action.  When MAC reviews an ALJ decision, it  undertakes a  
 
32 42 CFR  405. 968(b)(2). 

33 Starting at Level Two, an appellant may escalate an appeal if it is not dealt with in a 

timely manner by the appeals body.  For example, a request for an administrative law judge 

(ALJ) hearing may be submitted if the QIC does not decide the appeal within 60 days.   

42 U.S.C.  1395ff(c)(3)(C)(ii). 

34 ALJs also handle Level Three appeals for Medicare Parts C and D.  For Part C, 
 
see 42 CFR  422.600 and 422.602; for Part D, see 42 CFR  423.610 and 423.612. 

35 See generally 42 U.S.C.  1395ff(d) and 42 CFR  405.1000405.1054 (specifying Federal 

requirements for ALJ hearings).
 
36 42 U.S.C.  1395ff(b)(1)(E); 42 CFR  405.1006(b)(1).  See 72 Fed. Reg. 73348  

(Dec. 27, 2007) for adjustment to Medicare appeals amount in controversy for 2008.   

37 42 CFR  405.1060(b). 

38 42 CFR  405.1062(a). 

39 Medicare Parts C and D also provide for a Level Four review with the Medicare Appeals 

Council. For Part C, see 42 CFR  422.608; for Part D, see 42 CFR  423.620.   

40 42 CFR  405.1102(a)(1).  MAC is a division of the Department of Health and Human 

Services Departmental Appeals  Board and consists of Administrative Appeals Judges.  An 

appellant may also request a review by MAC if the ALJ does not complete its review within
  
90 days. 42 U.S.C. ' 1395ff(d)(3)(A), 42 CFR  405.1106(b).  See generally 42 U.S.C.  

 1395ff(d) and 42 CFR  405.1100405.1140 (specifying Federal requirements for  MAC 

reviews). 

  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   24   
  
A P P E N D I X   A  
 
de novo review.  MAC is bound by NCDs, but may review the facts of a 
particular case to determine whether an NCD applies to a specific claim 
for benefits and, if so, whether the NCD was applied correctly to the 
claim.41  MAC is not bound by LCDs, LMRPs, or  CMS program 
guidance, but MAC does give substantial deference to those policies, if 
applicable.42   Generally, MAC must make a decision within  
90 days of the filing date.  If the appellant disagrees with the MAC 
decision and the amount in controversy is at least $1,180,43 the 
appellant may file a civil action in Federal District Court within 60 days  
of receiving  the MAC decision. 
 
 
41 42 CFR  405.1060(c). 

42 42 CFR  405.1062(a). 

43 42 CFR  405.1136, 42 U.S.C.  1395ff(b)(1)(E); 42 CFR  405.1006(c)(1).   

See 72 Fed. Reg. 73348 (Dec. 27, 2007) for adjustment to Medicare appeals amount in 

controversy for 2008.   

  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   25   
  
  A P P E N D I X ~ B
 
 
 
 
 
 
 
Number of Sample Cases, by  Stratum  
Number of Cases 
Number of    Number of Cases  Number of Cases in 
in Which the  
Stratum  Sample  Removed From   Which the Appellant 
Appellant Did Not 
Cases  Sample  Responded    
Respond 
Telephone  70  2  10  58 
Video Teleconference   75  2  9  64 
In Person  75  10  5  60 
Unidentified  50  2  5  43 
Total  270  16  29  225 
Note: Cases were removed from the sample either because the Office  of Inspector General  (OIG) was conducting investigations  related 
to appellants associated with the cases or because they did not have hearings. 
Source:  OIG analysis of  sample cases, 2007.   
 
 
 
 
 
 
 
 
 
 
 
 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   26   
  
  A P P E N D I X ~ C
 
 
 
 
 
 
Inaccuracies in the Hearing Format Data in the Appeals System 
Hearing Format as Reported  by Sample 
  Identified in Appeals System 
Appellants  
Hearing Format as  Incorrectly  
Reported in the  Video  In 
Appeals System   Telephone   Teleconference   Person   Correctly   Number  Percentage 
Telephone  56  1  1  56  2  3% 
Video Teleconference   3  61  0  61  3  5% 
In Person  14  1  45  45  15  25% 
Unidentified  34  4  5  N/A  N/A  N/A 
Total  107  67  51  162  20  11%  
Source:  OIG analysis of interviews with sample appellants, 2007.   
 
 
 
 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   27   
  
  A P P E N D I X ~ D
 
 
 
 
 
 
 
Confidence intervals for Selected Estimates   
(Sample size = 225 cases that had hearings) 
Point  95-Percent  
Percentage of Hearings Conducted: 
Estimate  Confidence Interval 
By telephone   78.4%  73.4%83.4% 
By video teleconference  11.6%  8.0%15.1%  
In person  10.0%  6.1%13.9%  
 
Point  95-Percent  
Percentage of Cases That Had Hearings:  
Estimate   Confidence Interval  
In which the primary appellant  was a Medicare provider or 
77.8%  71.3%84.4% 
supplier 
In which the primary  appellant was a beneficiary   14.5%  8.5%20.5%  
That were pursued by State Medicaid organizations  7.6%  4.3%10.9%  
Source:  OIG analysis of interviews with sample appellants, 2007.  
 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   28   
  
  A P P E N D I X ~ E
 
 
 
 
 
 
 
 
 
Number and Percentage of Cases That Failed To Meet the 90-Day Requirement,   
by Quarter    
 
Number of    Number of Cases That Failed  Percentage of Cases That Failed   
Quarter    
Decided Cases  To Meet 90-Day  Requirement  To Meet 90-Day  Requirement 
 
1st  147  54  37%   
 
 
2nd  490  103  21% 
 
 
3rd  1,138  204  18%   
 
4th  1,407  140  10%   
 
Note: Ninety-six cases were excluded from this  analysis because they were received after the 4th quarter.
    
 
 
 
Source: Office of Inspector General analysis of  the  first 12 months of the Medicare Appeals System, 2007. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   29   
  
  A P P E N D I X ~ F
 
 
 
 
 
 
 
 
  Average Number of Days to Decision for Cases With a 
  90-Day Requirement, by  Office of Medicare Hearings and 
 
Appeals Field Office  
 
 
Number of   Average Number  of 
  Field Office 
  Decided Cases  Days to Decision  
 
  Arlington  70  59 
 
  Cleveland  1,587  88 
 
 
  Irvine  778  67 
 
  Miami  843  88 
 
 
  Source:  OIG analysis of  the first 13 months of  the Medicare Appeals System, 2007.  
 
 
 
 
 
Average Number of Days to Decision for Cases With a 
 
  90-Day Requirement, by  Number of Claims 
 
Number of   Average Number  of 
  Case Size 
  Decided Cases  Days to Decision  
 
  1 Claim  2,855  82 
 
  29 Claims  364  87 
 
 
10 Claims  28  95 
 
 
Note: Thirty-one cases were excluded from this analysis because the number of  
  associated  claims was missing from the appeals system. 
   
  Source:  OIG analysis of  the first 13 months of  the Medicare Appeals System, 2007. 
 
 
 
 
 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   30   
  
  A P P E N D I X ~ G
 
 
 
 
Timeliness of Cases Without a  90-Day Requirement 
 
  Number of 
   
Cases 
 
  Cases With a Decision Date in  Appeals System (N=8,500) 
 
       Decided within 6 months  7,500 
 
       Not decided  within 6 months   1,000 
 
  Cases Without a Decision Date in  Appeals System (N=6,182) 
 
 
     In appeals system for longer than 6 months  2,141 
 
 
     Not in the appeals system for 6 months  4,041 
 
 
  Total Number of Cases Without a 90-Day  Requirement  14,682 
 
 
  Source:  Office of  Inspector General analysis of  the Medicare Appeals System, 2007.   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   31   
  
  A P P E N D I X ~ H
 
 
                      
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   32   
  
A P P E N D I X   H  

 
 
               
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   33   
  
A P P E N D I X   H  

 
 
 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   34   
  
  A C K N O W L E D G M E N T S
 
This report was prepared under the direction of Jodi Nudelman, 
Regional Inspector General for Evaluation and Inspections in the New  
York regional office, and Meridith Seife, Deputy Regional Inspector  
General. 
Principal Office of Evaluation and Inspections staff from the  New York 
regional office who contributed to the report include Judy Bartlett, 
Christine Moundas, and Ellen Vinkey; other regional and central office 
staff who contributed include Lucia Fort, Christi Macrina,  
Scott Manley, Michelle  McInnis, and Barbara Tedesco.  
 
 
 
  OEI-02-06-00110   MEDICARE ADMINISTRATIVE LAW  JUDGE  HEARINGS:   EARLY  IMPLEMENTATION,  20052006   35