Medicare Part B Beneficiary Appeals Process

In response to a congressional request, GAO reported on claims processing and due process protections for beneficiaries under part B of the Medicare supplementary medical insurance program. GAO reported on: (1) the adequacy of the beneficiary appeals process under the due process principle of the Constitution; and (2) the extent to which the Health Care Financing Administration (HCFA) has implemented prior GAO recommendations directed at preventing underpayments to beneficiaries.

GAO has found that beneficiaries whose claims are denied have had a somewhat limited appeals process available to them, particularly for disputed claims involving less than $100. Federal courts have ruled that beneficiaries have neither been given an adequate explanation of denied claims or the opportunity for a hearing. Although the courts have directed the agency to correct the deficiencies, the matter has not been resolved. In two previous reports, GAO discussed problems encountered in beneficiary claims for physician services when there were large differences between the amount the physician charged and the amount Medicare allowed as reasonable. GAO found claims which contained numerous errors that were not detected by the carrier and resulted in underpayments to the beneficiary. GAO recommended improvements to the claims processing system that could help prevent underpayments to beneficiaries; however, the agency has not acted to implement them because, to do so would increase administrative costs and program payments. GAO recognizes the costs that would be involved if its recommendations were implemented; however, taking the recommended actions would help ensure that beneficiaries receive the benefits they are entitled to by law. Rather than trying to identify underpayments, HCFA officials reported that they are trying to make carriers and claims information more accessible to beneficiaries who believe they have been underpaid.