Meeting the Challenge of Medicare Appeal Delays

Thomas Herrmann | February 2014

Two years and counting … The Web site for the Office of Medicare Hearings and Appeals (OMHA) in the U.S. Department of Health and Human Services (HHS) recently announced: “Based on our current workload and volume of new requests, we anticipate that assignment of your request for hearing to an Administrative Law Judge may be delayed for up to 28 months.”The lack of timely due process is increasingly a complaint being made about the appeals process for challenging Medicare claims denials. As the number of appeals continues to escalate and adjudicative resources remain constant, it is important to understand how a claims appeal can be expedited and moved more quickly to a favorable decision. Having previously served for six years as an Administrative Appellate Judge on the HHS Medicare Appeals Council,I have been monitoring closely and with interest the issues associated with Medicare claims appeals. It is important to understand how this appeals process now finds itself in such dire straits. To do that one has only to review the history of the program. The big change came in 2000 when the appeals process for Medicare claims denials was changed dramatically by Congress. Five levels of review were established:

  • redetermination by a Medicare administrative contractor
  • (MAC);
  • reconsideration by a qualified independent contractor
  • (QIC);
  • hearing before an administrative law judge (ALJ);
  • review by the Medicare Appeals Council; and
  • review by Federal District Court.

In an effort to further streamline the appeals process and make it responsive to the interests of providers, suppliers, beneficiaries, and the Medicare Trust Funds, Congress subsequently transferred the responsibility for ALJ hearings from the Social Security Administration to HHS. And, in 2005, HHS established the OMHA, now comprised of approximately 60 ALJs, as well as support staff, to be responsible for handling all “Level 3” appeals of Medicare claims denials.

Burgeoning Caseload

It is important to understand the workload demands being placed on OMHA. In fiscal year (FY) 2013 (October 1, 2012 – September 30, 2013), it is estimated that approximately 329,000 requests for ALJ review involving almost 595,000 claims were received. During the same timeframe, the current 63 ALJs decided almost 103,000 appeals involving over 227,000 claims. These numbers need to be compared with cases received in the prior year to see how dramatically the appeal numbers have increased. In FY 2012, 130,000 requests for ALJ review were received encompassing over 312,000 claims.  Thus, there was over a 150 percent increase in the number of requests for ALJ review while the number of ALJs did not increase.  The Senate Appropriations Committee recently recommended increasing OMHA’s funding in FY 2014, recognizing “the growing backlog of cases at OMHA and the high rate of claims overturned by th[at] Office.” In light of the current Congressional gridlock, however, it is doubtful that OMHA will receive this increased funding.

About the Author

Thomas Herrmann advises health care clients on compliance and regulatory matters, with a focus on development and management of effective health care compliance programs. Mr. Herrmann is a recognized expert on issues related to the federal Anti-Kickback Statute, Stark Law and the False Claims Act.