The paper in brief
The question behind the estimate
Medicare's Unified Program Integrity Contractors (UPICs) identify claims for review and make determinations that can lead to payment denials or recoupment. Appeals may later reverse those determinations, but the time, expense, and financial pressure of getting to a decision fall on providers and the government. How much of that downstream cost is visible when contractor performance is evaluated?
This updated white paper brings together public spending records, reconsideration outcomes, appeals data, and documented review procedures. It estimates the annual hidden systemic cost of UPIC-related determinations that are reversed, plausibly reversible, or never independently adjudicated because providers stop appealing. The range is $49 million to $250 million under the paper's stated scenarios. It is an order-of-magnitude estimate, not a measured program total; the absence of contractor-level appeal outcome data limits its precision.
Why appeal labels are not enough
A large share of favorable Level 2 reconsiderations is classified as new documentation or evidence being persuasive. That label may reflect an incomplete initial submission. The paper also describes another pathway: the operative reason for denial can change as a claim moves through appeal, leading a provider to submit material responsive to a rationale it had not previously been given. The same classification can therefore contain different causes.
Without an issue-by-issue record of the original denial theory, the reconsideration theory, and the reason for reversal, CMS cannot reliably separate provider omission from changes in the review process. The paper calls this gap a measurement problem rather than treating every reversal as proof of contractor error.
What the scenarios show
Even a scenario that attributes no cost to shifting rationales produces an estimated $29 million to $65 million in direct adjudication and administrative costs associated with ultimately reversed determinations. The paper's broader scenarios include provider defense costs, recoupment pressure, and cases that may not reach an independent hearing. Those assumptions produce the $49 million to $250 million range.
The estimates are presented alongside the paper's sources and sensitivity choices in the downloadable PDF. They are intended to bound a policy question that current public reporting cannot answer precisely, not to assign a dollar loss to any particular contractor or claim.
A more useful accountability record
The paper proposes annual public reporting of UPIC-attributable appeal outcomes by contractor and jurisdiction, issue-disposition tables in QIC decisions, and integration of appeal outcomes into CMS's case-management data. It also recommends periodic independent evaluation, accuracy measures in contractor award criteria, a longer recoupment pause through independent review, and a carefully evaluated pilot for AI-assisted claim selection.
The common thread is measurement. A program integrity system should be able to show not only how many investigations it opens or dollars it identifies, but how often its determinations survive independent review and what the correction process costs. Read the full paper for the methods, assumptions, limitations, and proposed implementation paths.