HHS Moves to Reduce 700,000 Cases and Eleven Year Backlog

HHS has proposed key changes in the Medicare appeals process to help reduce the backlog of more than 700,000 cases. The Office of Medicare Hearings and Appeals (OMHA) and the Department Appeals Board (DAB) have been facing growing criticism from health care providers, beneficiary advocates, and Congress for their inability to speed up appeals and reduce the backlog. Just last month, the GAO issued another report criticizing the management of the process. The GAO found that the third level of appeals, decided at the administrative law judge stage, increased 37-fold from 2010 through 2014; appeals of other kinds of claims, by comparison, only increased 1.5 times. Appeals have skyrocketed over the last several years, growing at a rate of 40% per year. The backlog now stands at over 700,000 cases and has led to a decision to place a moratorium on assignment of new cases until the backlog is addressed. It would now take 11 years to clear the backlog, even if there were no new appeals.

On June 28^th, OMHA and the DAB reported issuing a Notice of Proposed Rulemaking (NPRM) on changes to the Medicare claims appeal process as part of their efforts to eliminate the backlog of currently pending appeals. The latest proposed regulatory changes are in a series of administrative actions designed to reduce the number of pending appeals and encourage resolution of cases earlier in the Medicare appeals process. HHS is proposing additional administrative action to:

• Expand the pool of available OMHA adjudicators;
• Increase decision making consistency among the levels of appeal;
• Streamline the appeals process so less time is spent by adjudicators and parties on repetitive issues and procedural matters by using MAC precedents;
• Have senior attorneys handle some procedural matters that come before the ALJ;
• Revise how the minimum amount necessary to lodge an appeal is determined; and
• Eliminate some steps in the appeals process to simplify the system.

These proposals are designed to reduce the number of pending appeals and streamline the Medicare appeals process as it relates to:

1. Medicare eligibility and entitlement;
2. Part B and D income-related premiums;
3. Part A and B pre- and post-payment claims (MACs, RACs, PSC/ZPICs);
4. Continuation of care (QIOs);
5. Part C managed care coverage (Medicare Advantage programs); and
6. Part D prescription drug coverage (Prescription Drug Plans).

Notably, the FY 2017 President’s Budget seeks additional funding to increase the capacity for processing and resolving appeals. It also includes a comprehensive legislative package aimed at both helping to process a greater number of appeals and encouraging resolution of appeals earlier in the process before they reach OMHA and the DAB.

In the posting, OMHA and the DAB stated that if the administrative authorities set forth in this NPRM become final and the proposed increases in funding increases come about, the backlog could potentially be eliminated in FY 2021.