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David McGill Blogger

GAO Issues Report on Medicare Appeals Backlog

Posted by David McGill | June 20, 2016

​The GAO recently published an 88-page report addressing Medicare's continued appeals backlog. The most compelling data is in the myriad tables and charts accompanying the report. Here are the 3 most important things for you to know:

#1: All Appeal Levels Saw Huge Increases Between 2010 and 2014

The numbers are staggering. Level 1 appeals (Redetermination) rose 62% over the 5-year period, from 2.6M to 4.2M appeals filed. Level 2 appeals (Reconsideration) increased 238% (265,140 to 896,838). And Level 3 appeals (ALJ) increased 936% (41,733 to 432,534). (These numbers are for all appeals - Part A, Part B, and DMEPOS, combined). 

Examination of DMEPOS claims only yields even starker results: the number of appeals proceeding all the way to Level 3 (ALJ) rose from 10,838 in 2010 to 120,252 in 2014, an increase of 1,010%.

#2: We Can See O&P Appeal Trends!

For the first time, we now have some idea of how O&P appeals look when separated out from the rest of the DMEPOS world. 

In 2010, suppliers filed a total of 4,073 Level 2 (Reconsideration) appeals. That number dropped slightly to 3,793 in 2011, before rising steadily upwards over the next 3 years (4,968, 7,499, and 11,209, respectively). The total percentage increase from 2010 to 2014 was 175%.

The data shows similar trends for Level 3 (ALJ) O&P appeals. In 2010, suppliers filed a total of 220 appeals, with a drop to 134 in 2011, followed by an explosion upwards over the next 3 years (381, 5,360 and 8,799 respectively). The total percentage increase from 2010 to 2014 was 3,900%.

#3: Perseverance Pays Off

The numbers show that the Redetermination and Reconsideration appeal levels for DMEPOS claims have become increasingly less supplier friendly over the last 5 years for which the GAO has data. 

Level 1 (Redetermination) Full Reversals of Initial Denial - DMEPOS Claims

Year ​% of Fully Reversed Claims

Level 2 (Reconsideration) Full Reversals of Level 1 Decision - DMEPOS Claims

Year ​% of Fully Reversed Claims


But when you fight your claim all the way to Level 3, you see that (a) the percentage rate of full reversals increases dramatically, and (b) while the trend​ of reduced win rates over the 5-year period continues, the drop-off is not enormous:



Level 3 (ALJ) Full Reversals of Level 2 Decision - DMEPOS Claims

Year ​% of Fully Reversed Claims

In fact, fully successful supplier appeals actually spiked upwards in 2012 and 2013 when compared to 2011. And even with a decrease in 2014, your odds of successfully appealing a claim at the ALJ level remain better than 50/50 based on this data.

What does this mean for you?

First, don't expect the central dynamic - huge appeal backlogs - to change anytime soon. The GAO notes that "the Medicare appeals backlog continues to grow at a rate that outpaces the adjudication process and will likely persist."

Second, if you fight your way through the Redetermination and Reconsideration appeal levels and proceed to the ALJ, the data shows that your chances of success exceed 50%. Stated another way, ALJ's disagree with Medicare's contractors and grant full reversals to suppliers more than half the time on appeal.

Third, given how long it takes to get to the ALJ level of appeal, we must re-emphasize how critical it is for you to get your claim right the first time. If you fail to secure adequate documentation in support of your claim, the 2014 data suggests you have only a 23.5% chance of getting a reversal at the first level of appeal, and a less-than 10% chance at Level 2. While your chances of prevailing at the ALJ level then spike upwards to 55.4%, you will wait years, potentially, to get that hearing. So invest in your up-front people and processes.

We will continue to monitor the issues related to Medicare appeals and provide you new analysis as information becomes available in the future. You can see the full GAO report discussed in this post at the GAO's website. The report is titled, "MEDICARE FEE-FOR-SERVICE: Opportunities Remain to Improve Appeals Process." 

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