As Medicare auditors have increased their workloads in recent years, doctors and hospitals are appealing more decisions that deny claims for beneficiary services.
Physicians sought to overturn denials 1.5 million times in 2012, which represented a 9% increase since 2008, according to an October report from the Health and Human Services department’s Office of Inspector General (OIG). Hospitals have appealed far fewer denied claims, but Medicare auditors, such as Recovery Audit Contractors (RACs), are driving more inpatient providers to enter the redetermination process, the OIG reported.
Dr. Ardis Dee Hoven
Physicians continue to have serious concerns about the inaccuracy of Medicare audit contractors, according to Dr. Ardis Dee Hoven, president of the American Medical Association.
The OIG’s report pointed out that "physicians who invest the time and expense to dispute contractor determinations prevail 54% of the time at the first level of appeal," Dr. Hoven said. "This contractor error rate is far too high, and physician practices should not have to undergo burdensome audits – including RAC audits – while this problem remains unaddressed."
Medicare processed more than 1.2 billion claims and denied nearly 140 million of them in 2012. Of those, 2.6% were appealed via the first-level appeals process. The OIG report did not provide details on why physician claims were denied; however, many Part A hospital benefit appeals stemmed from a RAC decision regarding short-term inpatient hospital stays.
The Centers for Medicare and Medicaid Services is implementing a new appeals system that soon will offer more information about appeals. Four contractors have begun using the system to process Part A redeterminations this year, CMS administrator Marilyn Tavenner said in an August memo to the OIG.
Contractors largely meet the timeframes established for redetermination requests, which is good news to practices that actively appeal claims, said Kent Moore, senior physician payment strategist at the American Academy of Family Physicians.
"If you appeal and you’re successful, you can get your money in a timely manner," Mr. Moore said. "If you’re not successful, then it might take longer than expected."
The OIG report found for favorably appealed claims, contractors paid physicians within 30 days 93% of the time. However, denied claims that are appealed to a second level can take 6 months to decide. In 2012, contractors transferred more than 280,000 Part B claims to the second level.