The two highest levels of the Medicare appeals process for denied claims take, on average, four times longer than required by law, says a report released Wednesday by the U.S. General Accounting Office.
The 2000 Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act, or BIPA, calls for Medicare appeals decisions to be made within a shorter timeframe, beginning with claims denied after Oct. 1, 2002.
The contract insurance carriers responsible for the first two levels of the appeals process, "have not demonstrated they can meet" the requirements, says the GAO report, requested by Reps. Billy Tauzin (R-La.) and John Dingell (D-Mich.) of the House Committee on Energy and Commerce.
Further, the bodies responsible for the third and fourth level of appeals review--the Office of Hearings and Appeals (OHA) in the Social Security Administration (SSA) and the HHS Medicare Appeals Council (MAC)--"have accumulated a sizeable backlog of unresolved cases," the report says. OHA's backlog at the end of 2001 included almost 35,000 Part B cases, the same as the number typically processed in seven months.
Between November 2001 and September 2003, the GAO limited its review of the four levels of the administrative appeals process to Part B claims denials, which constitute the majority of appeals. Data for 2001 appeals were analyzed to determine pre-BIPA conditions. In 2001, carriers processed about 773 million Medicare Part B claims and rejected or denied, about 161 million, or 21%.
The most common reason for denying claims was that services were deemed not medically necessary. Other reasons for denials were that Medicare did not cover the services or that the beneficiary was not eligible for services.
About 3.7 million Part B appeals were submitted in 2001 to the first level in the process. Only 43% of first-level appeals were completed within the 30-day time frame required by BIPA, the report says, although 91% of carriers completed their reviews within the 45-day CMS time frame.
GAO says more current data shows that appeals process conditions have not changed substantially.
Similarly, OHA and MAC fall short of BIPA's required 90-day time frame for completing 100% of their cases. In 2001, OHA took about 14 months to complete adjudication, and cases at MAC took about 21 months. As of September 2003, OHA and MAC had not implemented BIPA-mandated time frames and continued to operate without time frames for rendering decisions, the report says.
"Longstanding administrative problems among the appeals bodies, such as time-consuming transfers of paper appeals files and delays caused by outdated technology, which account for about 70% of the time spent in processing appeals at OHA and the MAC, have not been corrected," the report concludes.
Coordination among appeals bodies housed in different agencies "is inherently difficult," the GAO says, and each agency has its own priorities. HHS and SSA have agreed with the GAO recommendation that the appeals process would benefit from better synchronization. But in its comments, HHS says it has not developed a detailed action plan to meet BIPA requirements.