Department of Health and Human Services
 

OFFICE OF 

INSPECTOR GENERAL 

MEDICARE ADMINISTRATIVE 


LAW JUDGE HEARINGS: EARLY 


IMPLEMENTATION, 2005–2006 


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 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. 
 

 

 

 

 

Δ EXECUTIVE SUMMARY 

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. 

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EXECUTIVE SUMMARY 

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 OMHA’s 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 OMHA’s ability to manage its 

caseload. For over 70 percent of the cases that were decided in the first 

13 months of OMHA’s 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, 

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EXECUTIVE SUMMARY 

delays occurred early in the appeals process—from 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 

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EXECUTIVE SUMMARY 

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 OMHA’s efforts to address these issues and encourage it 

to continue to make progress in these areas. 

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Δ TABLE OF CONTENTS 

EXECUTIVE SUMMARY ..................................... i 
 

INTRODUCTION ........................................... 1 
 

FINDINGS ................................................ 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 OMHA’s ability to manage its 

caseload .................................................. 15 
 

OMHA did not decide a number of its cases in a timely manner...... 16 
 

RECOMMENDATIONS ..................................... 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 
 

ACKNOWLEDGMENTS .................................... 35 
 
 

 

 

 

 

Δ INTRODUCTION 

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 

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INTROD U C T I O N 

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 

OEI-02-06-00110 

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. 

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INTRODUCTION 

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. OMHA’s 

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 Children’s 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 Children’s 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). 

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INTROD U C T I O N 

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 party’s 

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. 

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INTRODUCTION 

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. 

 OEI-02-06-00110 

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. 

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INTROD U C T I O N 

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 OMHA’s 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 OMHA’s 

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. 

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INTRODUCTION 

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 

Stratum Number of Cases With 

Hearings in the Population 

Number of Cases With 

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. 

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INTROD U C T I O N 

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 OMHA’s 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 

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INTROD U C T U C T I O N I O N 

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 

OEI-02-06-00110 

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). 

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INTRODUCTION 

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 President’s Council on Integrity and 

Efficiency and the Executive Council on Integrity and Efficiency. 

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Δ FINDINGS 

In its first 13 months of operation, OMHA 

conducted an estimated three-quarters 

of 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. 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. 

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FINDING 
 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. 

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FINDINGS 

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 

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FINDING 
 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. 

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FINDINGS 

OMHA relies on the appeals 

system as the primary 

Incomplete and inaccurate data limit 

OMHA’s ability to manage its caseload 

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 OMHA’s 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. 

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FINDINGS 

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 

first 13 months of operation, 

OMHA did not decide a number of 

its cases in a timely manner 

be decided within 90 days. 

During its first 13 months of operation, 

OMHA received 6,085 cases that were 

required to be decided within 90 days.27 

OMHA received an additional 

14,682 cases that were not required to 

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. 

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FINDINGS 

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 

OMHA’s 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. 

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FINDINGS 

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 stage—from scheduling the hearing to the completion of the 

hearing—took 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. 

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F I NDING S 

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 

OMHA’s difficulties in obtaining the complete case files from the prior 

level of appeals. 

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Δ RECOMMENDATIONS 

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 OMHA’s 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 

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RECOMMENDATIONS 

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. 

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RECOMMENDATIONS 

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 OMHA’s efforts to address these issues and encourage it 

to continue to make progress in these areas. The full text of OMHA’s 

comments is included in Appendix H. 

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Δ RECOMMENDATIONS APPENDIX~A 

 OEI-02-06-00110 

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 §§ 405.940−405.958 

(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 

§§ 405.960−405.978 (specifying Federal requirements for reconsiderations). 

31 42 CFR § 405.968(b)(1). 

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APPENDIX 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 § 405.1000−405.1054 (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 §§ 405.1100−405.1140 (specifying Federal requirements for MAC 

reviews). 

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APPENDIX 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. 

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Δ APPENDIX~B 

Number of Sample Cases, by Stratum 

Stratum 

Number of 

Sample 

Cases 

Number of Cases 

Removed From 

Sample 

Number of Cases 

in Which the 

Appellant Did Not 

Respond 

Number of Cases in 

Which the Appellant 

Responded 

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. 

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Δ APPENDIX~C 

Inaccuracies in the Hearing Format Data in the Appeals System 

Hearing Format as Reported by Sample 

Appellants Identified in Appeals System 

Hearing Format as 

Reported in the 

Appeals System Telephone 

Video 

Teleconference 

In 

Person Correctly 

Incorrectly 

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. 

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Δ APPENDIX~D 

Confidence intervals for Selected Estimates 

(Sample size = 225 cases that had hearings) 

Percentage of Hearings Conducted: Point 

Estimate 

95-Percent 

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% 

Percentage of Cases That Had Hearings: Point 

Estimate 

95-Percent 

Confidence Interval 

In which the primary appellant was a Medicare provider or 

supplier 77.8% 71.3%–84.4% 

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. 

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Δ APPENDIX~E 

Number and Percentage of Cases That Failed To Meet the 90-Day Requirement, 

by Quarter 

Quarter Number of 

Decided Cases 

Number of Cases That Failed 

To Meet 90-Day Requirement 

Percentage of Cases That Failed 

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. 

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Δ APPENDIX~F 

Average Number of Days to Decision for Cases With a 

90-Day Requirement, by Office of Medicare Hearings and 

Appeals Field Office 

Field Office 

Arlington 

Cleveland 

Irvine 

Miami 

Number of Average Number of 

Decided Cases Days to Decision 

70 59 

1,587 88 

778 67 

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 

Case Size 

Number of 

Decided Cases 

Average Number of 

Days to Decision 

1 Claim 2,855 82 

2–9 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. 

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Δ APPENDIX~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. 

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Δ APPENDIX~H 

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APPENDIX H 

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APPENDIX H 

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Δ ACKNOWLEDGMENTS 

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. 

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