Claims are  denied for a variety of reasons. BIPA’s changes to the appeals  process were to apply with respect to initial determinations—that is,  claims denials—made on or after October 1, 2002. QICs have not yet been implemented and there is insufficient  information to predict their ability to meet BIPA’s performance measures. For example, at the first level of appeals—  the carrier review—while carriers completed about 91 percent of their  reviews within CMS’s current 45-day time frame, this is insufficient by  BIPA’s standards. More than 95  percent of OHA appeals and about 85 percent of MAC appeals did not  meet BIPA time frames in fiscal year 2001, suggesting that a number of  cases would be eligible for escalation. The first uncertainty concerns  funding for HHS. Conclusions

BIPA demands a level of performance—especially regarding timeliness—  that the appeals bodies have not demonstrated they can meet. In addition  to lengthy processing times, OHA and the MAC have developed sizable  backlogs of unprocessed cases. Greater coordination could enable them to resolve the barriers that  currently preclude successful management of the appeals process as a  whole. The lack of a single entity that sets priorities and addresses  operational problems at all four levels of the process makes it imperative  that all bodies work closely together. Recommendation for Executive Action

We recommend that the Secretary of HHS and the Commissioner of SSA  create an interagency steering committee with representatives from CMS,  the carriers, OHA, and the MAC to serve as an advisory body to the  Secretary of HHS and the Commissioner of SSA with the following  responsibilities:  make administrative processes, such as file tracking and transfer,  compatible across all appeals bodies;  negotiate responsibilities and strategies for reducing the backlog of  pending cases, especially at OHA and the MAC, and establish the priority  for adjudicating pre-BIPA cases relative to BIPA-governed cases; and  establish requirements for reporting specific and comparable program and  performance data to CMS, SSA, and HHS so that management can identify opportunities for improvement, and determine the resource requirements  necessary to ensure that all appeals bodies will be able to meet BIPA’s  requirements. To gain a better understanding of the process for Part B appeals at the  time the Medicare, Medicaid, and SCHIP Benefits Improvement and  Protection Act of 2000 (BIPA) was passed and the changes it mandated,  we reviewed agency procedures for completing Part B appeals regulations  and agreements guiding Medicare appeals and other laws. We also  analyzed appeals workload data and interviewed officials at the Centers  for Medicare & Medicaid Services (CMS) and at all levels of the  administrative appeals process—the carriers, the Office of Hearing and  Appeals (OHA), and the Medicare Appeals Council (MAC).
Why GAO Did This Study

Appellants and others have been concerned about the length of time it takes for a decision on the appeal of a denied Medicare claim. In December 2000, the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), required, among other things, shorter decision time frames. BIPA's provisions related to Medicare appeals were to be applied to claims denied after October 1, 2002, but many of the changes have not yet been implemented. GAO was asked to evaluate whether the current Medicare appeals process is operating consistent with BIPA's requirements and to identify any barriers to meeting the law's requirements.

What GAO Found

BIPA demands a level of performance, especially regarding timeliness, that the appeals bodies--the contract insurance carriers responsible for the first two levels of appeals, the Social Security Administration's (SSA) Office of Hearings and Appeals (OHA), and the Department of Health and Human Services (HHS) Medicare Appeals Council (MAC)--have not demonstrated they can meet. While the carriers have generally met their pre-BIPA time requirements, in fiscal year 2001, they completed only 43 percent of first level appeals within BIPA's 30-day time frame. In addition to average processing times more than four times longer than that required by BIPA, OHA and the MAC--the two highest levels of appeal--have accumulated sizable backlogs of unresolved cases. Delays in administrative processing due to inefficiencies and incompatibility of their data systems constitute 70 percent of the time spent processing appeals at the OHA and MAC levels. The appeals bodies are housed in two different agencies--HHS and SSA. The lack of a single entity to set priorities and address operational problems--such as incompatible data and administrative systems--at all four levels of the process has precluded successful management of the appeals system as a whole. Uncertainty about funding and a possible transfer of OHA's Medicare appeals workload from OHA to HHS has also complicated the appeals bodies' ability to adequately plan for the future.