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Latest Developments: Medicare Appeal Backlog Litigation

by admin on July 3, 2018 No comments

medicare appealBy: Matt Fischer

In 2012, the American Hospital Association (AHA) along with three member hospitals filed a lawsuit against the U.S. Department of Health and Human Services (HHS) for the agency’s failure to meet the 90 day decision requirement at the Administrative Law Judge (ALJ) level known as the Office of Medicare Hearings and Appeals (OMHA).  Through the years, the case has moved back and forth between a federal district court and federal appeals court in the District of Columbia.  Most recently in March, a federal district court judge ordered the AHA to expand on its suggestions it has made over the course of its litigation for how HHS can clear the ever-growing backlog and additionally, explain why the current procedures are insufficient.

For newcomers to this issue, the Medicare appeals process consists of five levels.  At the third level is review by an ALJ at OMHA.  Under federal regulation, an ALJ is required to issue a decision within 90 days.  This requirement, however, is rarely met unless it is an individual beneficiary appeal which is given priority status.  OMHA currently has an approximate wait time of two to three years.

In its court filing from last February, HHS argued that it is impossible for the agency to eliminate the backlog.  In support, HHS relied upon the following arguments: 1) the agency continues to receive thousands more appeals each year than it can adjudicate; 2) it is impossible for the agency to lawfully settle its way out of the backlog; and 3) further changes to the RAC program would not substantially assist with eliminating the backlog.  AHA has now been asked to expand on their suggestions to solve the issue, and HHS will be given an opportunity to respond.

In the wake of this litigation, HHS has implemented two new settlement options, the Low Volume Appeals Initiative and Settlement Conference Facilitation process.  In addition, HHS also published a new final rule revamping the process with significant changes such as making select decisions by the Medicare Appeals Council precedential and permitting senior OMHA attorneys to act as adjudicators.

With the uncertainty of this litigation and the initiation of new settlement programs, providers and suppliers should stay tuned for additional updates and reforms from HHS.

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