Skip to Main Content

Conditional payment disputes mired in Medicare appeals backlog

Insurers seeking appeals of adverse conditional payment decisions are finding that their cases are dragging, thanks to a major backlog of pending Medicare appeal requests.

The Strengthening Medicare and Repaying Taxpayers (SMART) Act outlined a conditional payment appeal process with five potential levels:

  1. redetermination by the applicable contractor—Benefits Coordination & Recovery Center (BCRC) or Commercial Repayment Center (CRC)
  2. reconsideration by a Qualified Independent Contractor (QIC)
  3. hearing before an Administrative Law Judge (ALJ)
  4. review by the Medicare Appeals Council (MAC)
  5. potential Federal Court review

Levels one and two involve CMS contractors. If primary payers do not agree with a QIC reconsideration, they have 60 days to request a hearing with an ALJ at the Office of Medicare Hearings and Appeals (OMHA), which is independent of CMS. Following ALJ adjudication, an aggrieved party can request review with an MAC Administrative Appeals Judge, who is also independent of CMS and OMHA.

There’s a significant backlog of appeals within the OMHA and MAC, and this has caused major delays. From fiscal year 2010 through 2015, there was a 442 percent increase in the number of appeals received annually at the ALJ level; during the same time frame, MAC appeals increased 267 percent.1

Statutory time frames for adjudication at the ALJ and MAC levels are both 90 days, but due to the overwhelming number of appeal requests, neither has been able to meet these time frames. As we reported back in March 2015, the average processing time for appeals decided in 2015 was 547.1 days.This has increased in 2016 to an average of 819.4 days.3

Following a critique by the Government Accountability Office (GAO), 4 in June 2016, the Department of Health and Human Services (DHHS) proposed changes 5 to the Medicare appeals process to reduce pending appeals and streamline the process. Some of the pertinent proposed changes include:

  • using attorney adjudicators to dispose of issues that don’t require an ALJ hearing, freeing up ALJ resources
  • granting authority to designate certain MAC decisions as precedential that lower levels would have to follow
  • revising the requisite minimum amount in controversy

We have advocated a fast-track appeals process for conditional payments. The practical effect of these delays could place primary payers in a difficult position, expending time, resources, and effort—and potentially waiting years to reach a point of finality regarding contested conditional payments.

Given the existing landscape, it’s critical that challenges to conditional payments succeed at the contractor level. Consider following these guidelines to increase your chance of success:

  • Be proactive: Begin the conditional payment process early in the life of a claim.
  • Don’t delay: Engage in pre-demand disputes before conditional payments reach demand status.
  • Be thorough: Offer all available arguments and include supplemental information, such as claims, medical, and legal documentation, that supports your position.
  • Don’t give up: Even if the contractor initially denies a dispute or appeal, bring issues to the contractor’s attention that may have been overlooked and not fully considered.
  • Seek expertise: Partner with an expert in MSP compliance that has experience in conditional payment disputes and appeals.

We will continue to advocate aggressively for our customers in their conditional payment disputes. In addition, we’re pushing for a fast-track process for MSP appeals. We’ll also continue to monitor this situation closely and provide updates as they become available.

If you have any questions about appealing conditional payment demands, please don’t hesitate to contact Shawn Deane.


Shawn Deane

Shawn Deane is vice president of Medicare / Medicaid compliance and policy at ISO Claims Partners, a Verisk business. You can contact Shawn at

You might also like

Visualize Subscribe

Get the best of Visualize!

Get the latest news and insights straight to your inbox.

Subscribe now

You will soon be redirected to the 3E website. If the page has not redirected, please visit the 3E site here. Please visit our newsroom to learn more about this agreement: Verisk Announces Sale of 3E Business to New Mountain Capital.