SNF Medicare Part A appeals increase, success rate holds steady: OIG report

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MedPAC will recommend site-neutral payments, but not for strokes
MedPAC will recommend site-neutral payments, but not for strokes

Skilled nursing facilities have been filing more appeals related to Medicare Part A claim determinations since 2008, and the proportion of successful appeals has remained largely steady, according to a new government report.

After receiving a claim determination from a Medicare contractor, a provider has 120 days to file a first-level appeal, known as a redetermination. A provider might appeal a contractor's determination that it received an overpayment, for example.

SNFs filed about 8,900 redeterminations in 2008, compared with about 11,300 in 2012, representing a 27% increase. The Department of Health and Human Services Office of Inspector General derived these figures from an analysis of a government database, and released the numbers in the report “The First Level of the Medicare Appeals Process, 2008-2012: Volume, Outcomes, and Timeliness.”

SNFs' redetermination success rate was in the 16% to 19% range between 2008-2012, except it spiked to 24% in 2011, according to the report. Last year, it was at 16%.

Taking into account all provider types, the number of redeterminations processed by Medicare contractors increased 33% for the four years leading up to 2012, the OIG found. However, the success rate of first-level appeals plummeted from 50% to 24%.

Specifically, the success rate for inpatient hospital claims and home health claims decreased dramatically. Home health redeterminations were 22% successful in 2008 but only 3% in 2012. For hospital inpatient claims, these numbers were 31% in 2008 and 10% last year.

The growth of the recovery audit contractor program is linked to these trends, the report indicates. Short-term inpatient stays often require medical review and are the most common type of claim involved in a RAC-related appeal, according to Medicare contractors interviewed for the report.

Some long-term care stakeholders have said the RAC activity encourages hospitals to keep patients under observation status rather than admitting them as inpatients. This could prevent Medicare beneficiaries from qualifying for subsequent skilled nursing care.

Click here to access the complete report, dated Oct. 2.