What happens when Medicare denies or underpays a claim

When Medicare denies your claim or pays less than you expected, you have the right to challenge that decision. The process is called an appeal, and it follows specific steps depending on the dollar amount and the type of service. You do not need a lawyer, though you can hire one if you choose. Most appeals are handled by mail, though some stages allow phone or in-person review.

Medicare keeps track of how many times you have appealed the same claim. If your first appeal is denied, you can file a second one. The rules change slightly at each level, so understanding which level you are at matters.

Key Takeaways

  • You have 120 calendar days from the date on your denial notice to file a first appeal, called a redetermination.
  • A redetermination request goes to the Medicare contractor that made the original decision, submitted on form CMS-20027 or by letter.
  • If your claim is for $200 or more and you disagree with the redetermination result, you can request a reconsideration from an independent review contractor.
  • For claims under $200, reconsideration is automatic if you request it; for claims $200 or more, you must ask for it within 180 days.
  • Gather your medical records, the original claim paperwork, and the denial notice before you start, because you will need these at every stage.

Understanding the five levels of Medicare appeal

Medicare appeals happen in order. You cannot skip a level or go backward. Each level has a different reviewer and different rules about timing and what evidence they will consider.

Level 1: Redetermination is your first appeal. The same Medicare contractor who denied your claim reviews it again, looking at the same medical records and the same rules. This level is free and takes roughly 30 days, though it can take longer if your case is complex.

Level 2: Reconsideration goes to an independent review contractor — a different organization that did not make the original decision. This reviewer looks at your case fresh. Reconsideration is also free and usually takes 60 days.

Level 3: Administrative Law Judge (ALJ) hearing happens only if your claim is for $200 or more. An ALJ is a government official who holds a hearing, usually by phone. You can present new evidence and witnesses at this stage. There is a filing fee unless you win or the ALJ waives it.

Level 4: Medicare Appeals Council review happens only if you disagree with the ALJ decision and your claim is for $200 or more. The Appeals Council reviews the ALJ's decision for legal errors. This stage is free.

Level 5: Federal court is available only if your claim is for $2,000 or more and you have exhausted all other levels. You would need to hire a lawyer for this stage.

How to file a redetermination (Level 1)

Start by gathering three things: your original denial notice from Medicare, the claim paperwork showing what was billed and why it was denied, and any medical records related to the service. The denial notice will have a specific reason — for example, "not medically necessary" or "exceeds frequency limits." Your appeal should address that reason directly.

You have 120 calendar days from the date printed on the denial notice to file. Do not count from the day you received it; count from the date on the letter itself. If you miss the 120-day window, you cannot file a redetermination, though you may be able to file a late appeal in limited situations.

File your redetermination using form CMS-20027, which you can read from Medicare.gov or request by phone. You can also write a letter instead of using the form — it does not have to be fancy. Include your name, Medicare number, the claim number, the date of service, and a clear explanation of why you think the denial was wrong. Attach copies (not originals) of supporting documents.

Mail your redetermination to the address on your denial notice. Different Medicare contractors have different addresses, so check the notice carefully. Keep a copy for your records and consider mailing it certified mail so you have proof of delivery. Processing takes roughly 30 days, though complex cases take longer.

Moving to reconsideration (Level 2) if redetermination is denied

If Medicare denies your redetermination, you will receive a new notice explaining the decision. This notice will tell you how to request a reconsideration from an independent review contractor.

The timing depends on your claim amount. If your claim is for less than $200, reconsideration is automatic — you straightforward request it, and the independent contractor must review your case. If your claim is for $200 or more, you must request reconsideration within 180 calendar days of the redetermination notice date.

File your reconsideration request using form CMS-20034 or by letter. Include the same information you included in your redetermination: your name, Medicare number, claim number, date of service, and your explanation. You can add new medical evidence at this stage if you have it — for example, a new letter from your doctor explaining why the service was necessary.

Mail your reconsideration request to the address listed in your redetermination notice. The independent review contractor will send you a decision within 60 days. This stage is free.

When to request an Administrative Law Judge hearing (Level 3)

You can request an ALJ hearing only if your claim is for $200 or more and you disagree with the reconsideration decision. The ALJ is a government official who will hold a hearing — usually by phone, though you can ask for in-person if you have a good reason.

You have 60 calendar days from the reconsideration notice to request an ALJ hearing. File using form CMS-20034 or by letter, sent to the address on your reconsideration notice. At this stage, you can present new evidence, call witnesses (such as your doctor), and explain your case directly to the ALJ.

There is a filing fee for an ALJ hearing, though the amount varies. If you win your case, the fee is waived. If you lose, you may still ask the ALJ to waive the fee based on financial hardship. You can also hire a lawyer to represent you at an ALJ hearing, though this is optional.

What to include in any appeal letter

Whether you use the official form or write a letter, every appeal should include the same core information. Start with your name, date of birth, and Medicare number at the top. Include the claim number, the date of service, and the provider's name.

Next, state clearly what you are appealing: "I am appealing the denial of my claim for [service] dated [date]." Then explain why you think the decision was wrong. Do not just say "I disagree." Instead, address the specific reason Medicare gave for the denial. For example, if Medicare said the service was not medically necessary, explain why it was necessary based on your medical condition.

Attach copies of supporting documents: your medical records, letters from your doctor, test results, or anything else that supports your case. Do not send originals. Keep copies for yourself. If you are mailing your appeal, use certified mail with return receipt so you have proof it arrived.

Frequently Asked Questions

Can I appeal while I am still paying the bill to my doctor?

Yes. Filing an appeal does not stop you from paying your bill, and it does not prevent your doctor from billing you. However, if you win your appeal, Medicare will pay the claim retroactively, and you may be owed a refund. Ask your provider if they will hold off on collection efforts while your appeal is pending.

What if I miss the 120-day important date for redetermination?

You cannot file a standard redetermination after 120 days. However, you may be able to file a late appeal if you have a good reason for the delay — for example, you were hospitalized or did not receive the denial notice. Contact your Medicare contractor to ask about filing late.

Do I need a lawyer to appeal a Medicare claim?

No. You can appeal on your own at all five levels. A lawyer is optional and most helpful at the ALJ hearing stage (Level 3) and beyond. If you hire a lawyer, they can charge a fee only if you win, and Medicare limits what they can charge.

How long does the whole appeal process take?

Redetermination takes roughly 30 days, reconsideration takes 60 days, and an ALJ hearing can take several months depending on the hearing office's workload. If you go through all levels, the entire process can take a year or more. You can move to the next level while waiting for a decision at the current level.

What if Medicare approves my appeal but only partially?

If Medicare approves part of your claim but denies part of it, you can appeal the denied portion. You would start a new appeal at Level 1 for the remaining amount. The timing and process are the same as any other appeal.