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Medicare Appeals

The five-level process for challenging a Medicare denial - of a claim, a service, a hospital discharge, or a nursing-home stay - with a different deadline at each level and a fast track when the care is about to stop.

Informational only - this is not legal advice. These definitions explain general legal vocabulary in plain English. They are not advice about your situation, reading them creates no attorney-client relationship, and the law differs from state to state and changes over time. For advice you can rely on, speak to a lawyer licensed in your state.

What it means

A Medicare beneficiary who is denied coverage - a claim paid at nothing, a service refused as not medically necessary, a drug excluded, a skilled-nursing stay cut off - has a right to appeal, and the process has five levels. The first is a redetermination by the contractor that made the decision (or, in Medicare Advantage and Part D, a reconsideration by the plan). The second is an independent review by a qualified independent contractor or independent review entity. The third is a hearing before an administrative law judge, available if the amount in dispute meets a threshold adjusted annually. The fourth is review by the Medicare Appeals Council, and the fifth is a civil action in federal district court, again subject to an amount-in-controversy threshold. Each level has its own filing deadline set by regulation, and missing one ends the appeal unless good cause is shown.

Two fast tracks exist for care that is about to end, and they are the ones a family is most likely to need at short notice. A hospital inpatient who receives a discharge notice may ask the Beneficiary and Family Centered Care Quality Improvement Organization for an immediate review, and if the request is made by the deadline on the notice the patient is not liable for the continued stay while the review is pending. The same expedited review is available when a skilled-nursing facility, home-health agency, hospice or rehabilitation facility issues a notice that Medicare coverage is ending. In Medicare Advantage, a plan must decide an expedited pre-service appeal within a short period where the standard timeframe could seriously jeopardise the patient's health.

Two systemic issues account for many appeals. "Observation status" - a hospital keeping a patient for days without formally admitting them - means the stay does not count toward the inpatient stay that Medicare requires before it will cover a skilled-nursing facility, and a federal court settlement now allows some patients to appeal that classification. And the "improvement standard", under which providers told patients that skilled care would end because they were not getting better, was disavowed in a federal settlement: coverage depends on the need for skilled care to maintain or slow the decline of a condition, not on improvement.

Where this comes from

The appeal rights are in 42 U.S.C. § 1395ff for original Medicare and § 1395w-22(g) for Medicare Advantage, with the procedures at 42 C.F.R. part 405, subpart I (original Medicare), part 422, subpart M (Medicare Advantage) and part 423, subpart M (Part D). The expedited discharge and service-termination reviews are at 42 C.F.R. §§ 405.1200-405.1208 and §§ 422.620-422.626. The improvement-standard settlement is Jimmo v. Sebelius, No. 5:11-cv-17 (D. Vt. 2013); the observation-status decision is Alexander v. Azar, No. 3:11-cv-1703 (D. Conn. 2020), affirmed sub nom. Barrows v. Becerra, 24 F.4th 116 (2d Cir. 2022). The amount-in-controversy thresholds and every deadline are set by regulation and annual notice and are not stated here.

When people hire a lawyer for this

The first two levels are designed to be used without a lawyer, and the State Health Insurance Assistance Program in every state helps beneficiaries with them at no charge. The situations that justify paying for advice are a discharge or termination notice with the deadline running today, a denial involving a large or ongoing cost such as a skilled-nursing stay, and anything reaching the administrative law judge level, where the case is argued on medical necessity and the record needs a treating physician's letter and the plan's own coverage criteria.

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Part of the LawyerLand plain-English legal glossary. Definitions are written from primary sources - statutes and court rules - and each entry states the authority it rests on, or says plainly when the doctrine is state law with no national rule.

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