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Medicare Sees 33% Spike in Claims Appeals

John Commins, for HealthLeaders Media, October 7, 2013

Medicare Part A and Part B appeals rose markedly between 2008 and 2012 with most of the increase coming from appeals of inpatient hospital claims. "We think that the recovery audit contractors are driving a lot of the increase," says an OIG official.

First-level appeals for Medicare Part A and Part B are on the rise, but most of those appeals are ultimately unsuccessful, a new federal study shows.

The study from the Office of the Inspector General for the Department of Health and Human Services found that more than 1 billion Medicare claims were processed in 2012, of which 3.7 million were appealed at the first level—an increase of 33% since 2008. These are also known as "redeterminations"

"About 80% of the first-level appeals were for Medicare Part B services and 20% for Part A," said Maria Maddaloni, team leader at OIG's Office of Evaluation and Inspections in Boston. "But Part A appeals have increased by over 500% from 2008 to 2012. Most of the increase was with appeals of inpatient hospital claims. We think that the recovery audit contractors are driving a lot of the increase."

By 2012, appeals involving RACs accounted for 39% of all appealed Part A claims. Contractors decided in favor of Part A appellants at a lower rate than that for Part B appellants.

"In 2012, only 1 out of 4 Part A appeals was decided in favor of the one making the appeal," Maddaloni said. "In 2012, about half of Part B appeals were decided in favor of appellants. This was also the case for appeals of physician services, which make up most of the Part B appeals."

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