For healthcare practitioners – including those making good-faith compliance efforts – avoiding the attention of RACs, MACs, and other Medicare auditors can be difficult. An unfavorable audit can result in denied claims, delayed payments, and demands for repayment with interest, creating significant financial hardship for providers whose business model relies on serving Medicare patients.
If you disagree with MAC, RAC, or UPIC audit findings, understand your appeal rights and engage experienced legal counsel to protect your practice from excessive recoupment demands or payment suspensions.
Facing a Medicare audit or unfavorable determination? Contact the Medicare appeals attorneys at Hendershot Cowart P.C. today.
Understanding MAC, RAC, and UPIC Audits: Different Triggers, Same Medicare Appeals Process
The Centers for Medicare and Medicaid Services (CMS), which administers Medicare, has developed a host of resources over the years to combat fraud and safeguard the integrity of Medicare.
Three primary audit programs impact healthcare providers; the key differences lie in how they're triggered and their severity:
- Medicare Administrative Contractor (MAC) audits may be routine prepayment or post-payment reviews based on claims processing oversight, complaint referrals, or identified billing patterns in their jurisdiction
- Recovery Audit Contractor (RAC) audits often result from data mining and statistical analysis identifying billing patterns that may indicate errors, with auditors financially incentivized to find overpayments
- Unified Program Integrity Contractor (UPIC) audits are targeted investigations launched only when CMS suspects fraud, waste, or abuse, representing the most serious level of scrutiny
While MAC, RAC, and UPIC audits serve different purposes, all three follow the identical five-level appeals process outlined below.
What Are the 5 Levels of the Medicare Appeals Process?
The Medicare appeals process is complicated and adheres to strict deadlines. You have 120 days from the date you receive a CMS demand letter to file a written appeal and enter the five stages of the appeal process. Penalties for not adhering to these deadlines are severe.
Below are the five levels of the Medicare appeals process and what to expect at each stage.
Level 1: Redetermination by a Medicare Administrative Contractor
The first step in the Medicare appeals process is called a Medicare Administrative Contractor (MAC) Redetermination. A redetermination is a review of the claim by MAC personnel not involved in the initial claim determination.
Key Requirements:
- File within 120 days from the date on the initial determination letter (assumed to be received five calendar days after the date of the letter, unless there is evidence to the contrary)
- Submit your appeal in writing using the Medicare Redetermination Request Form (CMS-20027) or make a written request
- Include any documentation that supports overturning the determination
- Expect a notice within 60 days
If you disagree with the redetermination results, you can advance your appeal to the next level within 180 days.
Level 2: Reconsideration by a Qualified Independent Contractor (QIC)
The second level of appeal is called a Qualified Independent Contractor (QIC) Reconsideration. At this stage, you request a QIC to review your case, who will independently evaluate the administrative record, including the initial determination and redetermination.
Key Requirements:
- File within 180 days from the date you receive a Medicare Redetermination Notice (MRN), a Medicare Summary Notice (MSN), or a Remittance Advice (RA).
- Complete the Medicare Reconsideration Request Form (CMS-20033) or make a written request explaining why you disagree with the contractor’s determination
- Include any evidence or legal arguments related to the issue(s) in dispute
- No opportunity for oral arguments or hearing at this level
- Expect a response within 60 days
This appeal is conducted by a QIC who did not participate in the decision at the first level of the appeal process. If you disagree with the QIC's decision, you have the right to continue to the next appeal level but must do so within 60 days.
Level 3: Hearing Before an Administrative Law Judge (ALJ)
The third level of appeal escalates your case to the Office of Medicare Hearings and Appeals (OMHA). This is one of the most critical stages of the appeals process, where providers can argue their case and call witnesses (including the treating physician and experts) before an Administrative Law Judge.
Key Requirements:
- File within 60 days from the day you receive the reconsideration decision letter.
- Your claim must meet a specific dollar amount threshold (determined annually). For calendar year 2025, the amount in controversy threshold is $190.
- Request an ALJ hearing using Form OMHA-100 or make a written request
- Hearings are generally held by videoconference or telephone, though you may request an in-person hearing
- The ALJ may reach a judgment without testimony if sufficient information exists
Important Note on Timing: By law, the ALJ must provide a judgment within 90 days of receipt of the hearing request. Historically, Medicare appeals faced severe backlogs, with wait times reaching nearly four years in the mid-2010s. However, significant improvements have been made following a 2018 federal court order, which mandated the elimination of the backlog by the end of fiscal year 2022.
As of fiscal year 2024, the average wait time for provider and supplier appeals has been dramatically reduced to approximately 71 days for ALJ hearings, according to industry sources.
Level 4: Review by the Medicare Appeals Council
Level 4 of the Medicare appeals process is a review by the Medicare Appeals Council. The Council is part of a government appeals board and is the last step of the appeals process before litigation.
The Council can issue its own decision, dismiss the request, or remand the case back to an ALJ for further review. Unlike level 3, the Council doesn't hold hearings – they only review the written record. Since there's no hearing, your written arguments and evidence must be compelling, making legal representation more valuable.
Key Requirements:
- File within 60 days of receiving your OMHA decision or dismissal, or within 90 days of no decision
- Submit your request using Form DAB-101 or make a written request
- Your appeal must identify the parts of the ALJ’s decision with which you disagree, and explain why you disagree
- There is no minimum requirement regarding the amount of money in controversy
- The Council has 180 calendar days to issue a final decision, dismissal order, or remand order
If you're unhappy with the Medicare Appeals Council decision – or if the Council doesn't issue a timely decision within the required 180-day period – you can appeal to level 5 of the Medicare appeals process – federal district court.
Level 5: Judicial Review in Federal District Court
The fifth level of appeal is a U.S. District Court Judicial Review. Once all appeals processes have been exhausted, you and your attorney may file a complaint with the federal court before a judge in their jurisdiction. Federal court litigation requires sophisticated legal skills and an in-depth knowledge of federal rules of procedure – this isn't a place for self-representation
Key Requirements:
- File in federal court within 60 days from the date you receive the Council decision
- The amount remaining in controversy must meet the threshold requirement (determined annually). For calendar year 2025, the amount in controversy threshold is $1,900.
- May include witnesses and testimony
Level 5 is the last level of appeals – there's no appeal beyond federal district court for most Medicare disputes.
Keep in mind that legal fees can easily exceed the amount in controversy. Your attorney may ask you to consider settlement opportunities before reaching this level.
What Happens If You Miss a Deadline in the Medicare Appeals Process?
Medicare can make mistakes, and so can you. If you miss a deadline in the Medicare appeals process, you likely have a valid reason. You can defend your right to appeal with the help of a Medicare appeals lawyer, especially if Medicare's original allegations were unwarranted, or you can prove you did not receive important paperwork from Medicare on time.
Unfortunately, “I didn't read the mail” or “my administrative staff did not give me the notice” are not acceptable defenses.
However, there are valid defenses. Theexperienced CMS appeals attorneys at Hendershot Cowart P.C. can help you identify any that apply and use them to protect your practice.
Don't Get Lost in the Medicare Appeals Process – Retain Experienced Health Law Counsel
The stakes are too high to navigate the Medicare appeals process alone. Whether you're facing a routine MAC audit, a contingency-based RAC audit, or a serious UPIC fraud investigation, experienced legal representation can protect your practice, your livelihood, and your right to serve Medicare patients.
Time is critical. With deadlines as short as 60 days and the appeals process now moving faster than ever, you need to act immediately when you receive an unfavorable determination.
Ready to protect your practice? Call the Medicare appeals attorneys at Hendershot Cowart P.C. at (713) 783-3110 or contact us online 24/7. We offer the experienced representation you need to navigate all five levels of the Medicare appeals process and achieve the best possible outcome for your practice.