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Medicare claims are processed by MACs: private contractors hired by the government.
Because there are more claim appeals than people to process them, this can lead to a delay in having your appeal processed.
A Medicare Advantage plan has the early stages of a claim processed by the provider, rather than a MAC, but there’s no guarantee this will speed up the process.
The Medicare appeals process is frustrating. There’s no sugarcoating it. You’ve got a big medical bill looming, but it feels like whoever is responsible for actually processing it is taking their sweet time. In a worst-case scenario, this can even lead to delay of vital medical procedures as you figure out how to pay for them. Why is healthcare so frustrating sometimes?
One of the most common claims that detractors of Medicare Advantage plans make is that you’re giving a private company the power to deny or accept your claims, which leads to fears that your claims will be unfairly denied. This is a major misconception for two reasons: first, the rules of whether or not a claim will be accepted by Medicare are exactly the same regardless of your plan: if Original Medicare covers it, Medicare Advantage must cover it. It’s the law.
The other major misconception, however, is that you’ll be handing over control of the Medicare appeal process to a private company. While that’s technically true, it assumes appeals aren’t already managed by private insurers.
That’s right. Even if you have Original Medicare, your appeals are already processed by a private insurer: a Medicare Administrative Contractor, or MAC.
MACs serve as intermediaries between healthcare providers and the Centers for Medicare and Medicaid Services (CMS). Whenever a claim is filed, it’s sent to the regional MAC for processing. For health care providers, the MAC is their primary point of contact. Using contractors for government work isn’t anything new: nearly every government agency, from the IRS to the DOD, relies upon contractors to some degree. Unlike Medicare Advantage providers, who also offer insurance to the general population, these MACs focus primarily on Medicare, though some also manage other health plans for government employees or corporate entities.
Currently, there are 12 MACs that process Medicare Part A/B claims, and 4 MACs that focus on Durable Medical Equipment claims. Each MAC serves a specific area, known as a Medicare jurisdiction, which often covers multiple states. In many states, processing for medical equipment is handled by different entities than those for general claims. For instance, Texas, Florida, and Louisiana all have different A/B MACs but share a single DME MAC.
MACs are the first step in the Medicare appeal process, which means every Original Medicare claim must go through one of them. In theory, a MAC has 60 days to make a redetermination once a claim is appealed, provided the appeal is filed within the 120-day window. In practice, this might not happen. You see, more people than ever are becoming eligible for Medicare, which means more people than ever are appealing rejected claims. With only 12 MACs to process claims for the entire country, this can lead to a bit of a backlog. How bad of a backlog depends on how far your appeal is escalated, but it can last for years in a worst-case scenario.
The reason it takes so long? Budget issues, the perpetual bane of all government programs. While enrollment and the number of filed claims are skyrocketing, the budget for processing these claims has remained relatively flat. A lower budget means fewer employees, which means fewer processed claims.
Medicare Advantage is, in part, something of a relief valve for this problem. When you enroll in Medicare Advantage, you’re placing management of your plan into the hands of a different private insurer that is able to use its existing network and infrastructure to handle things the government would normally fund. This means the early stages of the appeals process are handled by your provider, not the government. This can, in theory, lead to faster turnaround times, but it’s not guaranteed by any means.
Also, once you escalate to a certain point, you’re on the same track as an Original Medicare beneficiary. You also can’t move an already filed claim between plans, so if you’re already appealing a claim, you’re stuck with the current process. You can request a fast appeal in case of an early discharge from a hospital or similar facility, but that’s about it.
Unfortunately, slow appeal turnaround is a systemic problem that can’t be easily solved on the consumer end. While you might have better luck with a Medicare Advantage plan, there’s no guarantee that a given insurer will be faster to reverse a denied claim, nor is there any guarantee that a denial will be reversed to begin with.
Medicare Advantage plans cover additional healthcare needs and may be more lenient when it comes to things like hospital stays and certain procedures, but whether or not an individual plan covers something not covered by Original Medicare is left solely to the provider’s discretion.
If you are interested in a Medicare Advantage plan, our licensed insurance agents can help you make the most of it. Call us at (800) 950-0608 or enter your zip code into our free comparison tool to begin your search.
