Medicare and Medicaid Billing Errors: How to Appeal

Medicare and Medicaid cover more than 145 million Americans. Both programs have billing errors — at a rate that may surprise you.

In 2023, the federal government found $31 billion in improper Medicare payments and $50 billion in improper Medicaid payments. Some of those errors land directly on patients.

If something on your bill looks wrong, you have the right to dispute it. But the process is not simple. Each program has its own rules, its own documents, its own deadlines, and its own appeal structure. Missing a single deadline can cost you the right to appeal entirely.

This guide explains how errors happen and what the appeal process looks like for each program.

1. Medicare

Medicare is not one plan. There are three main types — and each one has a different appeal process, different documents, and different timelines. The type you have changes everything about how a dispute is handled.

Original Medicare (Parts A and B)

Billing errors in Original Medicare are common. CMS’s own data shows a 7.4% improper payment rate — roughly $31 billion in 2023. The errors that affect patients most directly include:

Catching these errors requires reading your MSN carefully, obtaining the full itemized bill from the provider, and knowing which codes to look for. Most patients don’t have the time or training to do this.

Original Medicare has five formal appeal levels. The process can stretch over months. Most disputes are resolved at levels one or two — but only if the appeal is filed correctly and on time.

Original Medicare (Parts A & B) — appeal process

Step	What happens	File by	Decision in
1	Redetermination by a Medicare Contractor	60 days from MSN	60 days
2	Reconsideration by a Qualified Independent Contractor	180 days from level 1	60 days
3	Hearing with Administrative Law Judge (Amount in controversy ≥ $200 in 2026*)	60 days from level 2	90 days
4	Review by the Medicare Appeals Council	60 days from level 3	90 days
5	Judicial Review in Federal Court (Amount in controversy ≥ $1,960 in 2026*)	60 days from level 4	Varies

The 60-day window at level one is the most critical deadline. Miss it and you need to show good cause to file late — which is not guaranteed.
* Minimum amount in controversy is updated annually by CMS to account for inflation.

Medicare Advantage (Part C)

Medicare Advantage is run by private insurers. They follow CMS rules but can add requirements Original Medicare doesn’t have — most importantly, prior authorization. A service that would be covered automatically under Original Medicare may require advance approval under your MA plan. When that approval is missing or denied, patients get unexpected bills.

This is one of the most complex areas of Medicare billing. The appeal goes to the private plan first, then to an independent reviewer. Timelines at the first two levels are different from Original Medicare — and there are expedited options for urgent situations.

Navigating a Medicare Advantage dispute means reading your plan’s EOB, understanding the plan’s own prior authorization requirements, and knowing when the Independent Review Entity (IRE) — not the plan — is the right escalation path.

Medicare Advantage (Part C) — appeal process

Step	What happens	File by	Decision in
1	Reconsideration by the Medicare Health Plan	60 days from denial	Standard: 30 days Expedited: 72 hours
2	Reconsideration by the Independent Review Entity (IRE)	60 days from plan denial	Standard: 30 days Expedited: 72 hours
3	Hearing by an Administrative Law Judge (Amount in controversy ≥ $200 in 2026*)	60 days from IRE	90 days
4	Review by the Medicare Appeals Council	60 days from ALJ	90 days
5	Judicial Review in Federal Court (Amount in controversy ≥ $1,960 in 2026*)	60 days from Council	Varies

For urgent disputes, an expedited appeal at levels 1 and 2 requires a response within 72 hours. Knowing when and how to request expedited review is critical — and something most patients miss.
* Minimum amount in controversy is updated annually by CMS to account for inflation.

Medicare and Medicaid billing disputes are complex. Here are the people who handle them.

Reconcile focuses on commercial insurance billing. But we know this space well enough to point you to the right experts — at no cost to you.

SHIP counselors

Free Medicare specialists in every state, funded by the federal government

shiphelp.org →

State legal aid

Free Medicaid appeal support — find your state office

lawhelp.org →

On a commercial employer or marketplace plan? That's where Reconcile comes in. Learn more →

Medicare Prescription Drug Plan (Part D)

Part D prescription drug plans have their own billing system, their own appeal structure, and some of the shortest deadlines in Medicare. At levels 2 and 3, plans must respond within 7 days — or 72 hours for expedited reviews. If you don’t know those timelines exist, you may wait too long and lose your window.

Common Part D billing issues:

Off-formulary — the plan doesn’t cover that specific medication
Tier exception — the drug is covered but placed in a higher cost tier
Prior authorization — pre-approval documentation not obtained for the drug
Quantity limits that don’t reflect your specific dosing or administration

Part D also has a process for formulary exceptions — requesting that a non-covered drug be covered because your doctor says you need it. This can help you get the drug you need at a more affordable rate. This runs alongside the appeal process and has its own documentation requirements.

Medicare Part D (Prescription Drug Plans) — appeal process

Step	What happens	File by	Decision in
1	Redetermination by the Medicare Drug Plan Sponsor	Any time	Standard: 72 hours Expedited: 24 hours
2	Reconsideration by the Independent Review Entity (IRE)	60 days from denial	Standard: 7 days Expedited: 72 hours
3	Hearing by an Administrative Law Judge (Amount in controversy ≥ $200 in 2026*)	60 days from IRE	90 days
4	Review by the Medicare Appeals Council	60 days from ALJ	90 days
5	Judicial Review in Federal Court (Amount in controversy ≥ $1,960 in 2026*)	60 days from Council	Varies

Part D timelines at levels 2 and 3 are far shorter than other Medicare types. A standard redetermination must be decided in 7 days. An expedited review in 72 hours.
* Minimum amount in controversy is updated annually by CMS to account for inflation.

2. Medicaid and CHIP

Medicaid is complex to navigate because it is funded and regulated by each state, which means the rules, the billing codes, the appeal deadlines, and the processes are different in every state. What applies in Texas may not apply in New York.

CHIP — the Children’s Health Insurance Program — follows the same appeal process as Medicaid in most states and carries the same complexity.

Common Medicaid and CHIP billing errors

Medicaid billing errors tend to cluster around a few categories:

Eligibility — billed for a service received after coverage ended or before it started. These are common at transitions between coverage periods.
Prior authorization errors — Medicaid requires advance approval for a wide range of services. A claim without it is often denied — even if the service was clearly necessary.
Wrong procedure codes — especially common in mental health, dental, and specialty care, where Medicaid uses state-specific code sets
Duplicate claims — the same service billed by two providers or submitted twice
Out-of-state billing errors — coverage for care received outside your home state varies significantly and is a frequent source of incorrect denials

Appealing Medicaid decisions

Most Medicaid members are enrolled in managed care plans — private insurers the state hires to administer the program. If you disagree with a decision that the managed care plan makes, you start with an internal appeal to the plan. They’ll bring in a reviewer who hasn’t looked at your case previously to redetermine the decision. If they still come to the same decision, you can take it to the state by filing for a state Medicaid fair hearing — a formal proceeding where your case is heard by an impartial reviewer.

The window to request that hearing varies by state. If you are appealing an eligibility problem are at risk of losing your coverage, you need to file for a fair hearing within 10 days of the determination notice so that you can keep your coverage while waiting for the appeal decision.

If you miss a deadline at any step, you may lose your right to continue. For state-specific information about how to ask for a fair hearing, check out this list of Medicaid contacts for each state or territory.

Medicaid and CHIP — appeal process

Step	What happens	File by	Decision in
1	Internal appeal to managed care plan or state’s Medicaid agency	30–90 days from denial — varies by state	10–90 days depending on state
2	Fair Hearing — federal legal right for all Medicaid members. Find your state contact.	30–120 days from plan decision — varies by state	90 days in most states

The state fair hearing is one of the most underused rights in the healthcare system. Federal law guarantees it — but only if you know to ask for it, and only if you ask in time.

Medicare and Medicaid billing disputes are complex. Here are the people who handle them.

Reconcile focuses on commercial insurance billing. But we know this space well enough to point you to the right experts — at no cost to you.

SHIP counselors

Free Medicare specialists in every state, funded by the federal government

shiphelp.org →

State legal aid

Free Medicaid appeal support — find your state office

lawhelp.org →

On a commercial employer or marketplace plan? That's where Reconcile comes in. Learn more →

How Reconcile Can Help

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Medicare and Medicaid Billing Errors: How to Appeal

March 24, 2026

The federal government found $31 billion in improper Medicare payments in 2023. If your bill looks wrong, you have the right to dispute it — here's how the process works.

medicare-and-medicaid-billing-errors-how-to-appeal