Two fed. agencies -- the Dept. of Health & Human Services (HHS) & the Social Security Admin. (SSA) -- play a role in resolving Medicare appeals, but neither agency manages the entire process. In Dec. 2000, an Act mandated appeals reform, including stricter time frames for processing Medicare appeals. Another Act in 2003 mandated that SSA transfer its Medicare appeals workload to HHS in 2005 to consolidate Medicare appeals within a single federal agency. This report: (1) assesses the agencies' progress in preparing to implement the transfer; & (2) determines how HHS spent funds appropriated for transferring the appeals workload from SSA to HHS & related activities in FY 2004 & the first half of FY 2005. Charts & tables.