Medicare Claims Denied in Error

Abstract

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 a recent report from the Health and Human Services department's Office of Inspector General (OIG). Medicare auditors, such as Recovery Audit Contractors (RACs), are driving more inpatient providers to enter the redetermination process, the OIG reported. Physicians continue to have serious concerns about the inaccuracy of Medicare audit contractors, according to Ardis Dee Hoven, MD, 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. The OIG report found that 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.