Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

THE FIRST LEVEL OF THE 

MEDICARE APPEALS 

PROCESS, 2008–2012: 

VOLUME, OUTCOMES, AND 

TIMELINESS 

Daniel R. Levinson 

Inspector General 

October 2013 

OEI-01-12-00150 
 

EXECUTIVE SUMMARY: THE FIRST LEVEL OF THE MEDICARE APPEALS 

PROCESS, 2008–2012: 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 General’s (OIG) first 

examination of redetermination, i.e., the first level of the appeals process for Medicare 

Parts A and B. This study contributes to OIG’s 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 

2008–2012. 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 2008–2012. 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 redeterminations—which 

account for 39 percent of all appealed Part A claims in 

2012—explains 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 2008–2012. 

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) 

Third level Hearing by an Administrative Law Judge in the Office of 

Medicare Hearings and Appeals 

Fourth level Review by the Medicare Appeals Council within the 

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, 2008–2012 (OEI-01-12-00150) 1 
 

 

 

 

 

 

 

as well as CMS’s 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, 2008–2012 (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 

QIC’s request.11 

CMS’s 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, 2008–2012 (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 contractor’s 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, 2008–2012 (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 2008–2012. 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, 

2005–2006, 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, 2008–2012 (OEI-01-12-00150) 5 
 

Data Sources and Analysis 

CROWD Data. We obtained CROWD data on redeterminations from 

CMS’s Contractor Management Information System (CMIS) for calendar 

years 2008–2012. 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 2008–2012. 

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 CMS’s 

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, 2008–2012 (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, 2008–2012 (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, 2008–2012 

Year Redeterminations 

processed 

Number of claims 

involved in 

redeterminations 

processed 

Total Medicare 

claims processed 

Total Medicare 

claims denied 

Percentage of 

denied claims with 

redeterminations 

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 2008–2012 

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, 2008–2012 (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. 

-30% 

-20% 

-10% 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

2009 2010 2011 2012 

Percentage 

Change From 

Previous Year 

Year 

Figure 1: Percentage Change in Redeterminations 

Processed From Previous Year 

Part A 

Part B 

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 

Service type Claims appealed 

in 2008 

Claims appealed 

in 2012 

Percentage change in 

claims appealed from 

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, 2008–2012 (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 

Service type Claims appealed 

in 2008 

Claims appealed 

in 2012 

Percentage change in 

claims appealed from 

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 

redeterminations—which account for 39 percent of all

appealed Part A claims in 2012—explains 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). CMS’s 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 RACrelated 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, 2008–2012 (OEI-01-12-00150) 10 
 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90% 

100% 

2008 2009 2010 2011 2012 

Year 

Figure 2: Percentage of Appealed Part A Claims Related to 

RAC Decisions 

Non-RAC-Related Claims 

RAC-Related Claims 

 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 policies—such as local 

coverage determinations—also increased the redeterminations workload, 

particularly for Part B. 

Table 6: Contractor-Reported Factors That Increased Redeterminations 

Workload 

Factor 

Number of contractors 

reporting factor as increasing 

Part A redeterminations 

(n=13) 

Number of contractors 

reporting factor as increasing 

Part B redeterminations 

(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, 2008–2012 (OEI-01-12-00150) 11
 

 

The First Level of the Medicare Appeals Process, 2008–2012 (OEI-01-12-00150) 12 

this study, decided redeterminations include all processed redeterminations 

that were not dismissed by contractors or withdrawn by appellants.27 From 

2008–2012, 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, 2008–2012 

Year Redeterminations 

decided 

Percentage of 

redeterminations fully or 

partially favorable to 

appellants 

Percentage of 

redeterminations 

unfavorable to 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. 
 

Table 8: RAC-Related and Non-RAC-Related Part A Redeterminations That 

Were Favorable to Appellants, 2008–2012 

Year 

Overall percentage of 

redeterminations 

favorable to appellants 

(fully or partially) 

Percentage of 

RAC-related 

redeterminations 

favorable to appellants 

(fully or partially) 

Percentage of 

non-RAC-related 

redeterminations 

favorable to appellants 

(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 2008–2012, 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, 2008–2012 

Year Redeterminations 

decided 

Percentage of 

redeterminations fully or 

partially favorable to 

appellants 

Percentage of 

redeterminations 

unfavorable to 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, 2008–2012 (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 2009–2012. 

Table 10: Completion Rates for Processing Redeterminations, 2008–2012 

Medicare 

Part Year 

Number of 

contractors 

Overall percentage 

completed within 

timeframes 

Median 

contractor 

completion rate 

Lowest 

contractor 

completion rate 

Highest 

contractor 

completion rate 

Part A 

2008 20 84% 98% 55% 100% 

2009 22 98% 99% 58% 100% 

2010 16 99% 100% 95% 100% 

2011 17 93% 100% 55% 100% 

2012 18 86% 89% 42% 100% 

Part B 

2008 26 92% 99% 29% 100% 

2009 25 97% 100% 90% 100% 

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 contractor’s 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, 2008–2012 (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. 

52,890 41,288 48,255 

71,515 

224,338 

154,453 

196,576 191,331 199,556 

281,415 

0 

50,000 

100,000 

150,000 

200,000 

250,000 

300,000 

2008 2009 2010 2011 2012 

Figure 3: Number of Case Files Transferred From Contractors to QICs by 

Medicare Part, 2008–2012 

Part A

Part B

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, 2008–2012 (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, 2008–2012 (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 contractor’s 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, 2008–2012 (OEI-01-12-00150) 17 
 

 

The First Level of the Medicare Appeals Process, 2008–2012 (OEI-01-12-00150) 18 

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. 
 

 

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, 2008–2012 (OEI-01-12-00150) 19 
 

 

Implementation of MAS will improve CMS’s 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, 2008–2012 (OEI-01-12-00150) 20 
 

CONCLUSION AND RECOMMENDATIONS 

The percentage increase in Medicare redeterminations from 2008–2012 

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 informationsharing 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, 2008–2012 (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, 2008–2012 (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 CMS’s comments, see Appendix B. 

The First Level of the Medicare Appeals Process, 2008–2012 (OEI-01-12-00150) 23 
 

APPENDIX A 

Additional Data Tables 

Table A1: Timeliness of Case File Transfer to Qualified Independent Contractors, 2008–2012 

Medicare 

Part Year Number of contractors 

Percentage of case 

files transferred 

within 5 days 

Contractor percentages 

Median 

transfer rate 

Lowest 

transfer rate 

Highest 

transfer rate 

Part A 

2008 20 64% 85% 20% 100% 

2009 22 87% 100% 61% 100% 

2010 16 87% 100% 59% 100% 

2011 17 89% 99% 50% 100% 

2012 18 79% 83% 42% 100% 

Part B 

2008 26 81% 89% 14% 100% 

2009 25 97% 99% 56% 100% 

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, 2008–2012 (OEI-01-12-00150) 24 
 

 

Table A2: Timeliness of Payment of Favorably Redetermined Claims, 2008-2012 

Medicare 

Part Year Number of contractors 

Percentage of 

favorably appealed 

claims paid within 

30 days 

Contractor percentages 

Median paid 

within 30 days 

Lowest paid 

within 30 days 

Highest paid 

within 30 days 

Part A 

2008 20 97% 98% 69% 100% 

2009 22 93% 97% 44% 100% 

2010 16 92% 99% 9% 100% 

2011 17 98% 99% 65% 100% 

2012 18 92% 99% 62% 100% 

Part B 

2008 26 92% 97% 6% 100% 

2009 25 96% 98% 84% 100% 

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, 2008–2012 (OEI-01-12-00150) 25 
 

Table A3: Outcomes of Redeterminations for Skilled Nursing Facility Claims, 2008–2012 

Year Redeterminations 

decided 

Percentage of 

redeterminations fully 

favorable to appellants 

Percentage of 

redeterminations partially 

favorable to appellants 

Percentage of 

redeterminations 

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, 2008–2012 

Year 

2008 

2009 

2010 

2011 

2012 

Redeterminations 

decided 

13,385 

17,116 

46,037 

58,713 

112,844 

Percentage of 

redeterminations fully 

favorable to appellants 

Percentage of 

redeterminations partially 

favorable to appellants 

Percentage of 

redeterminations 

unfavorable to appellants 

22% 2% 76% 

35% 4% 61% 

9% 1% 89% 

6% 1% 94% 

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, 2008–2012 

Year 

2008 

2009 

2010 

2011 

2012 

Redeterminations 

decided 

41,042 

10,929 

9,477 

63,918 

276,232 

Percentage of 

redeterminations fully 

favorable to appellants 

Percentage of 

redeterminations partially 

favorable to appellants 

Percentage of 

redeterminations 

unfavorable to appellants 

31% 0% 69% 

30% 1% 70% 

26% 2% 65% 

16% 2% 83% 

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, 2008–2012 

Year 

2008 

2009 

2010 

2011 

2012 

Redeterminations 

decided 

124,185 

126,908 

159,088 

172,806 

161,707 

Percentage of 

redeterminations fully 

favorable to appellants 

Percentage of 

redeterminations partially 

favorable to appellants 

Percentage of 

redeterminations 

unfavorable to appellants 

55% 5% 39% 

52% 4% 44% 

53% 5% 42% 

49% 6% 44% 

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, 2008–2012 (OEI-01-12-00150) 26 
 

Table A7: Outcomes of Redeterminations for Laboratory Claims, 2008–2012 

Year 

2008 

2009 

2010 

2011 

2012 

Redeterminations 

decided 

67,520 

74,804 

83,355 

87,933 

100,261 

Percentage of 

redeterminations fully 

favorable to appellants 

Percentage of 

redeterminations partially 

favorable to appellants 

Percentage of 

redeterminations 

unfavorable to appellants 

55% 2% 43% 

45% 4% 52% 

48% 5% 48% 

54% 4% 42% 

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, 2008–2012 

Year 

2008 

2009 

2010 

2011 

2012 

Redeterminations 

decided 

217,258 

155,871 

173,966 

201,138 

225,684 

Percentage of 

redeterminations fully 

favorable to appellants 

Percentage of 

redeterminations partially 

favorable to appellants 

Percentage of 

redeterminations 

unfavorable to appellants 

68% 1% 32% 

61% 1% 38% 

52% 1% 47% 

48% 0% 52% 

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, 2008–2012 

Year 

2008 

2009 

2010 

2011 

2012 

Redeterminations 

decided 

628,712 

423,150 

485,295 

636,222 

897,500 

Percentage of 

redeterminations fully 

favorable to appellants 

Percentage of 

redeterminations partially 

favorable to appellants 

Percentage of 

redeterminations 

unfavorable to appellants 

46% 5% 32% 

48% 7% 45% 

44% 5% 50% 

40% 6% 54% 

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, 2008–2012 

Year 

2008 

2009 

2010 

2011 

2012 

Redeterminations 

decided 

1,112,028 

1,280,691 

1,150,788 

1,257,177 

1,298,987 

Percentage of 

redeterminations fully 

favorable to appellants 

Percentage of 

redeterminations partially 

favorable to appellants 

Percentage of 

redeterminations 

unfavorable to appellants 

60% 3% 37% 

54% 3% 43% 

54% 4% 42% 

55% 3% 42% 

52% 2% 46% 

Source: OIG analysis of CROWD data, 2013. 

The First Level of the Medicare Appeals Process, 2008–2012 (OEI-01-12-00150) 27 
 

Table A11: Outcomes of Redeterminations for Other Claims, 2008–2012 

Year 

2008 

2009 

2010 

2011 

2012 

Redeterminations 

decided 

196,640 

166,697 

176,085 

181,088 

250,403 

Percentage of 

redeterminations fully 

favorable to appellants 

Percentage of 

redeterminations partially 

favorable to appellants 

Percentage of 

redeterminations 

unfavorable to appellants 

53% 2% 45% 

45% 2% 53% 

43% 2% 55% 

45% 2% 53% 

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, 2008–2012 (OEI-01-12-00150) 28 
APPENDIX B 

Agency Comments 

,..,.....-.... ( ..!~_ DEPARI'MENT OF H EALTH & HUMAN SERVICES Centers for Medicare & Medicaid Services ,-:::z'[­ 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, 2008–2012 (OEI-01-12-00150) 30 
 

 

The First Level of the Medicare Appeals Process, 2008–2012 (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, 2008–2012 (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 OIG’s 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.