Medicare Appeal

Published on: October 26, 2026

Sixth Circuit Revives Medicare Waiver of Liability Doctrine

Medicare providers understand that a claim may be denied if the services do not satisfy applicable coverage requirements. The more difficult question is whether a provider must repay Medicare when a coverage determination is later overturned and recouped, or when the provider reasonably believed the services qualified for coverage at the time they were furnished. That question was recently addressed by the U.S. Court of Appeals for the Sixth Circuit in In Home Health, LLC v. Kennedy, a decision that could have significant implications for Medicare providers facing post-payment audits and overpayment demands.

The Social Security Act provides for a Waiver of Liability doctrine wherein a provider is not liable for a Medicare overpayment where the provider did not know and could not reasonably have been expected to know that payment would not be made. Waiver of Liability issues typically arise where Medicare coverage guidance is vague, open to interpretation, or non-existent. However, the doctrine typically gets extremely short shrift in the Medicare claims appeal process, where most reviewers simply conclude that it does not apply without performing any substantive analysis.

In Home Health involved a hospice provider that faced a demand for nearly $1 million in alleged overpayments after Medicare contractors, and further levels of administrative review by a Qualified Independent Contractor and Administrative Law Judge (ALJ), that numerous hospice claims did not meet Medicare’s coverage requirements.

Published on: September 28, 2026

From Denial to ALJ: Building a Medicare Appeal Record That Actually Wins

by Wachler & Associates, P.C.

A Medicare denial is not necessarily the end of the road. For providers, physicians, and healthcare organizations, it can be the beginning of an administrative appeal that ultimately reaches an Administrative Law Judge (ALJ), the Medicare Appeals Council, or even federal court. But successful appeals rarely begin at the hearing stage. They are built from the earliest stages of the dispute.

For Original Medicare Part A and Part B claims, CMS identifies five levels of appeal: redetermination by the Medicare Administrative Contractor (MAC), reconsideration by a Qualified Independent Contractor (QIC), an ALJ-level proceeding through the Office of Medicare Hearings and Appeals, review by the Medicare Appeals Council, and judicial review in federal district court. That structure creates a practical lesson for providers: the appeal record matters from the beginning.

A common mistake is to treat the first two appeal levels as relatively informal requests for review and assume that the “real” case can be developed later at the ALJ hearing stage. That approach can be costly. The early levels of appeal, especially reconsideration, are an opportunity to identify the precise reason for the denial, assemble the relevant medical and billing evidence, and establish a coherent explanation for why Medicare payment was appropriate. Timing matters, too. Evidence and medical records that are submitted at the earlier appeal levels may be excluded from consideration before the ALJ and later appeal level.

Published on: September 14, 2026

Medicare Denials as Compliance Intelligence: Turning Appeals Data Into a Risk-Management Tool

by Wachler & Associates, P.C.

For many healthcare organizations, a Medicare denial is treated as a financial nuisance: the claim was rejected, staff appeal it, and everyone moves on. That approach leaves valuable information on the table.

Medicare denials can function as an early-warning system for broader compliance problems. When analyzed systematically, denial data can help physicians and healthcare business leaders identify weaknesses in documentation, coding, medical necessity, utilization, training, and internal controls before those weaknesses become larger financial or regulatory problems. CMS uses multiple contractors and review programs to evaluate Medicare claims. Medical review contractors assess whether claims satisfy Medicare’s coverage, coding, payment, and billing requirements, and CMS explains that review activity may be driven by data analysis and identified vulnerabilities.

That same concept can be applied internally. Suppose a physician practice receives a handful of denials involving insufficient documentation. Viewed individually, each denial may seem routine. But if the same issue appears repeatedly across physicians, locations, or service lines, the organization may have identified a process problem rather than a collection of unrelated claim or documentation errors.

Published on: July 13, 2026

What Healthcare Providers Need to Know About Medicare Audits

by Wachler & Associates, P.C.

For healthcare providers enrolled in Medicare, a claims audit can present significant operational and financial challenges. When an audit results in denied claims, the appeals process often becomes lengthy, with cases taking months—or even years—to reach a final resolution. Successfully navigating each stage requires careful planning, strategic decision-making, and close attention to procedural deadlines.

Most Medicare audits begin with a request for medical records from a Medicare contractor. From the outset, providers should determine the purpose and scope of the review. Identifying the contractor conducting the audit—whether a Medicare Administrative Contractor (MAC), Unified Program Integrity Contractor (UPIC), Recovery Audit Contractor (RAC), or Supplemental Medical Review Contractor (SMRC)—can offer valuable insight into the government’s objectives. It is equally important to understand the type of audit involved. Is the review occurring before or after payment? Is it part of a Targeted Probe and Educate (TPE) initiative, a Comprehensive Error Rate Testing (CERT) review, or a Provisional Period of Enhanced Oversight (PPEO) audit? Providers should also evaluate whether statistical sampling or extrapolation may be part of the review.

The provider’s own circumstances should also factor into a response strategy. Previous audit activity, recent ownership changes, or situations where records are maintained by another organization may all influence how the audit should be handled. Depending on the issues presented and the potential exposure, providers may choose to supplement the record with additional documentation, obtain an independent clinical review, communicate directly with the auditing contractor, or prepare a comprehensive legal response. In lower-risk situations, however, submitting the requested records and waiting for the contractor’s determination may be the most appropriate approach.

Published on: November 25, 2025

Navigating Medicare Claims Audits: A Strategic Guide for Providers

by Wachler & Associates, P.C.

For healthcare providers participating in the Medicare program, facing a claims audit can be both challenging and time-consuming. Denials are common during these audits, and when they occur, the appeals process can stretch over months or even years. Each step requires careful strategy and timely action.

Typically, a Medicare audit is initiated when a Medicare contractor requests medical records from a provider. At this early stage, it’s crucial to understand the context of the request. Identifying the type of contractor involved, whether it’s a Medicare Administrative Contractor (MAC), Unified Program Integrity Contractor (UPIC), Recovery Audit Contractor (RAC), or Supplemental Medical Review Contractor (SMRC), can provide important insight into what kind of review is being conducted. The nature of the review itself also matters: is it a pre-payment or post-payment audit? Is it part of a Targeted Probe and Educate (TPE) program, a Comprehensive Error Rate Testing (CERT) audit, or a Potential Payment Error Opportunity (PPEO) initiative? Is there a likelihood that the audit includes statistical extrapolation?

The provider’s own history and operational context can also affect the review. For instance, has the provider faced similar audits recently? Was there a recent ownership transfer? Are any necessary records held by another entity? These details may guide the provider’s next steps. Depending on the scope and risk level of the audit, providers might take proactive measures to support their claims. This could include submitting additional documentation, hiring a clinical reviewer to evaluate the claims, engaging directly with the contractor, or preparing a detailed legal response. In other situations, simply submitting the requested records and awaiting a decision may be the most prudent course.

Published on: August 25, 2025

When Is a Medicare Audit Win Not a Win?

by Wachler & Associates, P.C.

Generally, in the Medicare claims appeal process, a determination that is favorable to the provider ends the appeal process. Only under very limited circumstances can the Centers for Medicare & Medicare Services (“CMS”) or its contractors directly appeal a favorable appeal determination. However, there are certain mechanisms that can be used to reopen, review, and change favorable determinations with which CMS disagrees.

The Medicare claims appeal process is a lengthy, complex, and administratively burdensome process for providers. It includes five levels of appeal, the first four of which are directly controlled by CMS or The Department of Health and Human Services (“HHS”) itself. First is Redetermination by a Medicare Administrative Contractor (“MAC”). Second is Reconsideration by a Qualified Independent Contractor (“QIC”). Third is review by an Administrative Law Judge (“ALJ”) employed by the Office of Medicare Hearings and Appeals (“OMHA”), a division of HHS. Fourth is review by the Medicare Appeals Council, another division of HHS. Fifth is review by a federal court.

Where a provider prevails at the ALJ review, a distinct CMS contractor, the Administrative QIC (“AdQIC”) is tasked with reviewing an ALJ decision. Where CMS, through the AdQIC, disagrees with the ALJ, in some limited circumstances, the AdQIC can directly file an appeal of the ALJ decision to the Appeals Council. However, more often the AdQIC will simply “refer” a provider’s victory to the Appeals Council for the Appeals Council to considering review of its “own” accord. The Appeals Council nearly always takes such cases and often overturns the provider’s favorable determination. CMS and/or HHS may also simply direct the ALJ, who is employed by HHS, to change the decision.

Published on: July 29, 2025

Basics of the Medicare Claims Appeal Process

by Wachler & Associates, P.C.

The regulatory process for appealing Medicare claim denials and overpayments is a complex, lengthy, and administratively burdensome process. Through up to five levels of appeals, Medicare-enrolled providers and suppliers, and their representatives, must contend with inflexible deadlines, tight procedural and bureaucratic requirements, and biased reviewers, all while contesting the denials and asserting the medical necessity of the items or services at issue.

After a Medicare Administrative Contractor (MAC) has issued an Initial Demand, the letter that informs the provider of the claim denials, the reasons for the denials, and the amount of repayment demanded, the first step in appeal is Redetermination. Redetermination review is conducted by the same MAC who issued the Initial Demand and the contractor nearly always upholds its earlier decision. A provider can stop or halt recoupment of the alleged overpayment at this stage of appeal, but only if it requests Redetermination within a certain timeframe.

After Redetermination, the next level of appeal is Reconsideration. Reconsideration is conducted by a Qualified Independent Contractor (QIC), a separate Medicare contractor than the contractor that conducted Redetermination. The QIC is generally more impartial than the MAC, but often finds against the provider. A provider can stop or halt recoupment of the alleged overpayment at this stage of appeal as well, but only if it requests Reconsideration within a certain timeframe.

Published on: June 30, 2025

Increasing Scrutiny of Medicare Hospice Providers

by Wachler & Associates, P.C.

The Department of Health and Human Services Office of Inspector General (“OIG”) recently announced that it would closely examine data relating to new Medicare hospice provider enrollments. These efforts build on existing practices by the Centers for Medicare & Medicaid Services (“CMS”) to increase oversight of certain Medicare hospice providers.

Hospice provides palliative care and support for patients who are terminally ill and for their families. Medicare covers hospice care only where certain criteria are met, including that a qualifying physician has certified that the patient has a terminal illness and a life expectancy of six months or less. Medicare-enrolled hospice providers are also required to be certified by CMS, be licensed as required by State and local law, and meet Medicare Conditions of Participation to receive payment.

For the past several years CMS has been concerned with hospice compliance and with fraud, waste, and abuse by hospice providers. To this end, CMS has increased audits of hospice providers, adjusted the 36-month rule restricting certain sales of hospice providers, and implemented the Provisional Period of Enhanced Oversight (“PPEO”) pilot program. Pursuant to the PPEO program, since mid-2023, CMS audits all “newly-enrolled” hospice providers in Arizona, California, Nevada, and Texas. “Newly-enrolled” is not limited to hospice providers enrolling in Medicare for the first time, but also includes those that undergo a Change of Ownership (“CHOW”) as that term is defined under the Medicare program, those that undergo a 100% change in ownership, and those reactivating Medicare enrollment after being in a deactivated status. PPEO audits function similar to TPE audits, but tend to be more rushed and less forgiving in terms of the education provided to the hospice under review. Hospices under PPEO audits should treat them with due caution and take measures to ensure that their claims and documentation meet Medicare requirements.

Published on: April 16, 2025

HHS OIG Discovers What Medicare Providers Have Long Known

by Wachler & Associates, P.C.

The US Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) recently released a report wherein it found what Medicare providers have long known, that Medicare Administrative Contractors (“MACs”) frequently commit significant errors and do not comply with Medicare requirements when they conduct audits of Medicare providers.

Specifically, OIG reviewed MAC audits of Medicare costs reports and found that, for federal fiscal years 2019–2021, each of the 12 MAC jurisdictions failed to comply with the contract requirements for audit and reimbursement desk review and audit quality for at least 1 of the 3 years. The Centers for Medicare & Medicaid Services (“CMS”) also identified 287 total audit issues among all MAC jurisdictions during that period, including MACs not performing proper reviews; inadequate review of graduate medical education and indirect medical education reimbursement; improper review of allocation, grouping, or reclassification of charges to cost centers; improper calculation and reimbursement for nursing and allied health programs; and inadequate review of bad debts.

Issues with MAC reviews are nothing new to Medicare providers. In addition to auditing cost reports, MACs also audit claims under Medicare fee-for-service and perform the first level of claims appeals, referred to as Redetermination. In regard to audits, MACs are often criticized for misinterpreting criteria, applying the wrong criteria, using nurse reviewers with little to no experience in the clinical area under review, and taking excessive amounts of time to complete reviews. However, MAC audit issues might not present such a significant issue if MACs did not also perform the first level of appeal – Redetermination – of their own audits.

Published on: April 1, 2025

What Do Changes at HHS Mean for Medicare Appeals and Compliance?

by Wachler & Associates, P.C.

Multiple changes have been announced or proposed at the federal Department of Health and Human Services (“HHS”), which will likely impact healthcare providers engaged in Medicare audit appeals and regulatory compliance activities. Although, in some ways, these changes may simply be a return to the status quo experience 5 to 10 years ago.

HHS has announced that that it will further reduce its head count and rearrange some of its many divisions. Specifically, it will cut another 10,000 full-time employees in addition to the approximately 10,000 employees that have left the department since January. The bulk of the new cuts will be to the FDA, CDC, and NIH. The Centers for Medicare and Medicaid Services (“CMS”), which oversees the Medicare program and the many Medicare contractors, is expected to lose about 300 employees. While the reduction at CMS may be small relative to other divisions, the loss of experienced decision-makers is being keenly felt as established agency norms, contacts, and priorities can no longer be relied upon. For CMS to change is not necessarily a bad thing in the long term, but it in the short term, it creates significant uncertainty among providers.

Several divisions relating to Medicare appeals and compliance are also being rearranged. The Health Resources and Services Administration (“HRSA”) is being combined with several other divisions into the new Administration for a Healthy America (“AHA”). HRSA has administered – often poorly – the Provider Relief Fund (“PRF”) and the many provider disputes related thereto. It is not clear whether this change will reinvigorate HRSA’s handling of PRF disputes, but given the policy statements of the new AHA, PRF disputes do not appear to be a priority. Further, two divisions closely related to Medicare appeals, the Office of Medicare Hearings and Appeals (“OMHA”) and the Departmental Review Board (“DAB”), will both be reassigned under a new assistant secretary of enforcement. OMHA and DAB already work together closely, so providers in the various Medicare appeals processes are unlikely to experience significant disruption from this change.