The Medicare appeals process has not been able to keep up with an explosion in the number of volume, particularly at the administrative law judge (ALJ) level (Level 3), resulting in significant backlogs and widespread failure to meet statutory deadlines, according to a recent Government Accountability Office (GAO) report. Specifically, the GAO determined that Medicare fee-for-service (FFS) appeals at the ALJ level increased by 936% from fiscal year (FY) 2010 to FY 2014, compared to a 62% increase in Level 1 appeals (Medicare Administrative Contractor level), a 238% increase in Level 2 appeals (Qualified Independent Contractor level), and a 267% increase in Level 4 appeals (Medicare Appeals Council/Departmental Appeals Board). Among Level 3 appeals, Part A appeals increased by 2,030% during this timeframe, while on the Part B side appeals of denied durable medical equipment, prosthetics, orthotics, and supplies claims grew at 1,010%. The Department of Health and Human Services (HHS) attributes the growth in appeals in part to the expanded recovery audit claim denials entering the appeals process in FY 2011, along with a greater propensity among providers and suppliers to appeal denied claims. The growing volume of claims has had a negative impact on the timeliness of appeals decisions, with ALJs issuing 96% of their Level 3 appeal decisions after the statutory time frame in FY 2014.
The GAO recommends that HHS take a number of steps to strengthen oversight of the Medicare FFS appeals process, including improving various appeals data systems and implementing a more efficient way to adjudicate certain repetitive claims (e.g., permitting appeals bodies to reopen and resolve appeals).