Changes to Medicare Appeals Process, Part 2

on Monday, 10 July 2017. All News Items | Case Management

“Oh dear! Oh dear! I shall be too late!”
The White Rabbit mutters at the beginning of Alice’s Adventures in Wonderland

On January 17, 2017, CMS published a Final Rule making changes to the Medicare Appeals process. More specifically, “this final rule revises the procedures that the Department of Health and Human Services (HHS) follows at the Administrative Law Judge (ALJ) level for appeals of payment and coverage determinations for items and services furnished to Medicare beneficiaries, enrollees in Medicare Advantage (MA) and other Medicare competitive health plans, and enrollees in Medicare prescription drug plans, as well as appeals of Medicare beneficiary enrollment and entitlement determinations, and certain Medicare premium appeals. In addition, this final rule revises procedures that the Department of Health and Human Services follows at the Centers for Medicare & Medicaid Services (CMS) and the Medicare Appeals Council (Council) levels of appeal for certain matters affecting the ALJ level.”

The effective date of the rule was March 20, 2017 and late like the Rabbit in Alice in Wonderland, CMS hosted an MLN Connects National Provider Call: Changes to the Medicare Claims and Entitlements Appeals Process on June 29, 2017. Although, with the current state of appeals, CMS was really right on time.

MMP first wrote about the Final Rule in February of this year providing first a general overview of the appeals process, work load challenges at the Office of Medicare Hearings and Appeals (OMHA), and then a couple of highlights from the Final Rule.

Since February the OMHA has posted more current appeals backlog findings. Today, we will look at the current state of the Medicare Appeals Backlog and then delve a little deeper into the rabbit hole of Appeals.  

Current Challenges for the OMHA

  • 2 billion = The number of Medicare fee-for-service claims processed in fiscal year (FY) 2016
  • 119 million = The number of claims denied on initial determination
  • 5 million = The number of denied claims that were appealed
  • 442% = The increase in the number of appeals OMHA received annually from FY 2010 through FY 2015
  • 658,307 = The number of appeals waiting to be adjudicated by the OMHA as of the end of FY 2016
  • 22,707 = The number of appeals waiting to be reviewed at the Council as of the end of FY 2016
  • 8 years = The time it would take for OMHA to process respective backlog of appeals under the current resource level available and without any additional appeals
  • 10 years = The time it would take for the Council to process respective backlog of appeals under the current resource level available and without any additional appeals

Current Status of Medical Appeals Backlog

Appeal LevelStatus of Appeals Backlog
1 – Redetermination by a Medicare Administrative Contractor (MAC) CMS is currently meeting statutory time-frames to process appeals and is not experiencing a backlog at the first two Appeal levels
2 – Reconsideration by a Qualified Independent Contractor (QIC)
3 – Hearing before an Administrative Law Judge (ALJ) OMHA is currently receiving a year’s worth of appeals work every 24 weeks
The pending workload exceeds 650,000 appeals as of the end of Quarter 4 of FY 2016
The Annual Adjudication Capacity going forward is approximately 92,000 appeals
4 – Review by the Medicare Appeals Council (Council) The Council is currently receiving more than a year’s worth of appeals work every 10 weeks
The pending workload exceeds 22,000 appeals as of the end of Quarter 4 of FY 2016
The Annual Adjudication Capacity going forward is approximately 2,600 appeals
Source: HHS Primer: The Medicare Appeals Process at

Precedential Decisions (§401.109)

The Chair of the Departmental Appeals Board (DAB) will have authority to designate a final decision of the Secretary issued by the Council as precedential.

CMS perceives that benefits of this finalized proposal include:  

  • “This would provide appellants with a consistent body of final decisions of the Secretary upon which they could determine whether to seek appeals.”
  • “It would assist appeal adjudicators at all levels of appeal by providing clear direction on repetitive legal and policy questions, and in limited circumstances, factual questions.”
  • “In the limited circumstances in which a precedential decision would apply to a factual question, the decision would be binding where the relevant facts are the same and evidence is presented that the underlying factual circumstances have not changed since the Council issued the precedential final decision.”

To help ensure appellants and other stakeholders are aware of Council decisions that are designated as precedential…

  • Notice of precedential decisions would be published in the Federal Register, and the decisions themselves would be made available to the public.
  • Designated precedents would be posted on an accessible website maintained by HHS, and
  • Decisions of the Council would bind all lower-level decision-makers from the date that the decisions are posted on the HHS website.
  • Make precedential decisions binding meaning “the precedential decision would be binding on CMS and its contractors in making initial determinations, redeterminations, and reconsiderations.

CMS notes that “the designation of a decision as precedential does not create a new law or policy. By designating decisions as precedential, the DAB Chair is merely providing for consistent legal interpretation and analysis of CMS’s existing laws, rule and policies…the mission of the DAB is to provide impartial, independent review of disputed decisions in a wide range of HHS programs under more than 60 statutory provisions. The DAB Chair will continue to advance that mission when designating precedential Council decisions.”


Attorney Adjudicators (§405.92)

Attorney Adjudicator is defined as “a licensed attorney employed by OMHA with knowledge of Medicare coverage and payment laws and guidance, and authorized to take the actions provided for in [part 405, subpart 1] on requests for ALJ hearing and requests for reviews of QIC dismissals.” During the MLN National Provider Call, the following table was provided depicting the differences between actions that can be taken by Administrative Law Judges versus an Attorney Adjudicators.

ActionAdministrative Law JudgeAttorney Adjudicator
Conduct a conference and/or hearing Yes No
Decide a case that does not require a hearing Yes Yes
Decide or dismiss a request for review of a dismissal Yes Yes
Dismiss a request for hearing when appellant withdraws Yes Yes
Dismiss a request for hearing for any other reason Yes No
Issue remands Yes Yes
Request information from CMS or CMS contractor Yes Yes
Make a good cause determination on submission of new evidence Yes Yes
Determine Amount in Controversy (AIC) was met for a request for hearing Yes Yes
Determine AIC NOT met for q request for hearing Yes No
Review fee petition Yes Yes
Call an OMHA expert Yes No
Raise new issues Yes No

Amount in Controversy (§§405.1006, 422.600, 423.1970, 478.44)

The Amount in Controversy (AIC) is the amount of money at issue in an appeal. For appeals filed at the OMHA level in calendar year 2017 must be at least $160. The AIC is generally calculated as the actual amount charged a beneficiary for the items and services in the disputed claim, reduced by any Medicare payments already made or awarded and any deductible and/or coinsurance amounts that may be collected.

Four New Exceptions to General AIC Calculation

  • Item or Service Terminations: Use the amount the beneficiary would have been charges if the beneficiary had received the items or services the beneficiary asserts should be covered.
  • Overpayments: Use the amount on the demand letter.
  • Coinsurance and deductible challenges: Use the difference between the contractor-determined amount and the amount the beneficiary argues should have been charged.
  • Fee Schedule or Contractor Price Challenges: Use the difference between the contractor-determined allowable amount and the amount the appellant argues should have been allowed.

Content Requirements (§§405.1014(a) and (b))

  • A telephone number is now required for appellants and representatives (including beneficiary-appellants).
  • Appellants must be provided with the opportunity to complete the request.
  • Any applicable adjudication time frame does not begin until the request is complete.
  • Supporting materials that clearly provide required information will be considered in determining whether the request is complete.

New Evidence (§§405.1018, 423.2028)

405.1018(c)(2) now states: “If a statement explaining why the evidence was not previously submitted to the QIC or a prior decision-maker is not included with the evidence, the evidence will not be considered.”

405.1018(d)(2) clarifies that the requirement to show good cause for the introduction of new evidence for the first time at the OMHA level does not apply to the following:

  • An unrepresented beneficiary, or a beneficiary represented by someone other than a provider or supplier,
  • CMS or any of its contractors,
  • A Medicaid State Agency, or
  • An applicable plan.

405.1028(a)(2) provides four new examples of when good cause may be found when required for new evidence submitted by a provider, supplier or beneficiary.

  • When material to a new issue is identified after a QIC decision.
  • When the evidence was unobtainable prior to the QIC’s decision, and there is evidence that reasonable attempts were made.
  • When previously submitted evidence is missing.
  • When there are any other circumstances where a party could not have obtained evidence before the QIC issued its reconsideration.

While this article delves a little deeper, there is still much to glean from the Final Rule. It is important for key stakeholders within your facility to take the time to read and understand all of the changes to the Appeals Process.  


Article by Beth Cobb

Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Services at Medical Management Plus, Inc.  Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system.  In her current position, Beth monitors, interprets and communicates current and upcoming Case Management / Clinical Documentation issues as they relate to specific entities concerning Medicare.  You may contact Beth at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful

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