Court Orders End of Medicare Claims Appeal Backlog by 2020

Backlog saga may be coming to an end

On December 8, 2016, a district court ordered HHS to eliminate pending Medicare claims appeals. This is the latest action in a 2.5 year pending litigation initiated by the American Hospital Association (AHA) and several hospitals. The case arose when the plaintiffs challenged the failure of HHS to meet the statutory time frames related to the adjudication of Medicare claims appeals. Tom Herrmann, JD, served over twenty years as a former Administrative Appeals Judge and executive in the Office of Counsel to the Inspector General. Herrmann observed that health care providers and suppliers with pending appeals will welcome the court action requiring HHS to take steps to comply with the statutory deadlines for resolution of appeals.

Herrmann explained that under the governing law and regulations, an ALJ is required to hold a hearing and render a decision within 90 days of a party’s filing of an appeal with the HHS Office of Medicare Hearings and Appeals (OMHA). However, due to volume and inadequate resources, OMHA has been unable to comply with this statutory deadline, resulting in a backlog of almost one million pending appeals. Herrmann referenced the GAO report issued last June that was highly critical of the HHS appeals process and the failure to meet statutory deadlines for the resolution of appeals. On July 15, 2013, OMHA had placed a moratorium on accepting new appeals requests in order to catch up on pending appeals. That did not work. He also noted that historically, cases sent to OMHA on appeal by providers were most often reversed in favor of the providers. With this court decision, CMS is required to meet the following deadlines and mandatory percentage reductions:

• 30% reduction of current backlog of cases pending at the ALJ level by December 31, 2017
• 60% reduction of current backlog of cases pending at the ALJ level by December 31, 2018
• 90% reduction of current backlog of cases pending at the ALJ level by December 31, 2019
• 100% reduction of current backlog of cases pending at the ALJ level by December 31, 2020

Herrmann further explained that if HHS fails to meet the deadlines set forth in the court order, claimants may move for default judgment in their favor. This would apply to Medicare appeals that have been pending at the ALJ level without a hearing for more than a calendar year. HHS is obligated to submit a report every 90 days on its “progress in reducing the backlog and includ[ing] updated figures for the current and projected backlog, as well as a description of any significant administrative and legislative actions that will affect the backlog.” HHS tried to make a point with the Court that the timetable would require HHS to “make payment on Medicare claims regardless of the merit of those claims,” which would conflict with Medicare regulations. The Court, however, stated that HHS has already violated a Medicare statute by not complying with statutory deadlines for Medicare appeals. A timetable provides a reasonable period for “proper claim substantiation.” As the Court decision noted, “satisfying the statutory demands for both accuracy and timeliness will no doubt prove challenging, but such is the task at hand.” The Court decision “simply demands that the Secretary figure out how to undertake ‘proper claim substantiation’ within a reasonable timeframe.” The Court will retain jurisdiction over the matter “if the Secretary fails to meet the [court ordered] deadlines.”