The HHS Appeals Backlog Saga Continues

Back in 2016, the U.S. District Court for the District of Columbia (District Court) ordered the Department of Health and Human Services (HHS) to clear its backlog of pending Medicare claims appeals, consisting of hundreds of thousands of appeals. The District Court adopted the plaintiff’s proposed schedule in December 2016. For the cases filed at the Administrative Law Judge (ALJ) level, HHS was to reach a 30 percent reduction in the current backlog of cases by December 31, 2017, a 60 percent reduction by December 31, 2018, a 90 percent reduction by December 31, 2019, and an elimination of the backlog of pending cases by December 31, 2020. HHS filed a motion to reconsider the District Court decision which was denied. HHS then filed an appeal in January 2017. The D.C. Circuit Court remanded the District Court decision on August 11, 2017, stating that the lower court should determine whether it is practically possible for HHS to comply with the timetable to reduce the backlog.

Recommendations to Reduce Appeals Backlog

The District Court has been frustrated with HHS’s inability to process appeals, which numbered in the hundreds of thousands when the American Hospital Association (AHA) and affiliated entities first filed the lawsuit against HHS in May of 2014. Throughout the litigation process, HHS has made repeated court appearances where it pleaded for additional time to eliminate the backlog, citing the impossibility to comply with the District Court’s orders. HHS has made these pleas despite Congress increasing HHS funding by $75 million last March, which enabled the agency to hire additional staff to review appeals. In March of this year, the District Court requested that the AHA recommend specific strategies to practically reduce the appeals backlog. The AHA responded in June, suggesting that HHS do the following:

• Impose a financial penalty on Recovery Audit Contractors with high overturn rates at the ALJ level;
• Shift hospital-related claims to quality improvement organizations;
• Bring inpatient rehabilitation facility claims to a prompt, fair settlement;
• Make good-faith settlement offers to participants in its Settlement Conference Facilitation program;
• Reduce the interest charged on non-recouped funds from providers while their appeals are part of the backlog;
• Allow providers and suppliers to “rebill” claims for up to six months;
• Toll time to file Section 340B appeals;
• Maintain current efforts to fight the backlog; and
• Continue to submit status reports every 90 days.

HHS was originally given until July 12 to respond to AHA’s suggestions. However, the agency requested a delay to wait for updated numbers on the current backlog status, as recent policy changes may have affected the 2017 backlog numbers. District Court Judge James Boasberg has given HHS until August 3 to file its response.

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