When Medicare denies a claim for a medical service or item, the program will not pay, potentially leaving the beneficiary responsible for the full cost. A denial is not the final word on coverage, however, and a formal process exists to challenge the decision. This article explains why claims are rejected and outlines the specific steps you can take to appeal a Medicare denial.
Common Reasons for Claim Rejection
Medicare claim rejections often fall into two categories: administrative errors and coverage determinations. Administrative issues are usually simple, correctable mistakes, such as incorrect coding, missing patient information, or submitting the claim past the deadline. For instance, a provider may have used a procedure code that does not match the diagnosis code, leading to an automated denial.
Coverage denials relate to Medicare’s rules, particularly the concept of “medical necessity.” Medicare only pays for services and supplies considered reasonable and necessary for the diagnosis or treatment of an illness or injury. A claim is denied if the service did not meet this threshold or if the frequency exceeded established limits. Services excluded by law, such as cosmetic surgery or routine foot care, are also denied. For beneficiaries with a Medicare Advantage plan, receiving care from an out-of-network provider may also lead to a denial.
Understanding the Medicare Summary Notice
The first document received after a claim is processed is a statement explaining the decision, not a bill. For those with Original Medicare (Part A and Part B), this is the Medicare Summary Notice (MSN), typically mailed quarterly. The MSN lists all services billed, the amount charged, and the amount Medicare approved and paid (which is zero for a denial).
If enrolled in a Medicare Advantage Plan (Part C) or a Medicare Part D drug plan, you receive an Explanation of Benefits (EOB) instead, often monthly. Both the MSN and the EOB contain the specific “claim denial code” or “reason code” explaining why the service was not covered. This code is the official reason for the denial and is required for formulating an appeal. Always wait to receive a bill from your provider and ensure the charges align with the “Maximum You May Be Billed” amount on your MSN before making any payment.
The First Level of Appeal: Redetermination
The mandatory first step in challenging a denial is requesting a Redetermination, a review performed by the Medicare Administrative Contractor (MAC). The MAC is the private company contracted by Medicare to process claims in your region. You have a strict deadline of 120 days from the date you receive the MSN or EOB to file this request.
To initiate the Redetermination, you can use the official form, CMS-20033, or submit a written request. This request must contain the beneficiary’s name, Medicare number, specific service details, and the date of service. The most important element is the inclusion of new evidence or clarification that directly addresses the denial reason code, such as a letter from your doctor explaining medical necessity or corrected billing information. The MAC must issue a decision within 60 days. If the MAC upholds the original denial, they send a Medicare Redetermination Notice explaining the decision and outlining the next steps.
Subsequent Appeal Stages
If the initial Redetermination is unsuccessful, you can proceed to the second level of appeal.
Reconsideration by a Qualified Independent Contractor (QIC)
You must file this request within 180 days of receiving the Redetermination Notice from the MAC. The QIC conducts an independent review of the administrative record and usually issues a decision within 60 days.
Hearing before an Administrative Law Judge (ALJ)
If the QIC denies the claim, the third level is a Hearing before an Administrative Law Judge (ALJ). To qualify, the “amount in controversy” (AIC) must meet a minimum threshold. For requests filed in 2024, the AIC must be at least $180, and this amount is subject to annual adjustments.
Review by the Medicare Appeals Council
If the ALJ upholds the denial, the fourth level is a Review by the Medicare Appeals Council, which is part of the Department of Health and Human Services. You must file this request within 60 days of receiving the ALJ’s decision. The Appeals Council reviews the case record to determine if the ALJ’s decision was correct.
Judicial Review in a Federal District Court
The fifth and final level is Judicial Review in a Federal District Court. This step is available only if you disagree with the Appeals Council’s decision or if they do not issue a timely decision. Like the ALJ hearing, this stage has a higher minimum AIC threshold, which is $1,840 for requests filed in 2024. These later stages are formal and complex, and beneficiaries may consider seeking legal assistance to navigate the proceedings.