Kusserow’s Corner: ALJ Hearings for Medicare Claims Appeals is Broken; New Appeals Suspended for Two Years

An open memorandum from Nancy Griswold, Chief Administrative Law Judge, suggests that the entire appeals process is broken and at a standstill. The OMHA is responsible for hearing Medicare appeals at the administrative law judge level, which is the third level of Medicare claims appeals. OMHA ensures that Medicare beneficiaries who are dissatisfied with the initial decisions about their benefits or eligibility can appeal and exercise their right to a hearing in front of an administrative law judge (ALJ). In an open memorandum to Office of Medicare Hearings and Appeals (OMHA) Medicare Appellants, Griswold stated that “due to the rapid and overwhelming increase in claims appeals, effective July 15, 2013, OMHA temporarily suspended the assignment of most new requests for an Administrative Law Judge hearing.” This suspension of assigning cases will stay in effect for at least two years, in order to allow OMHA to catch up on almost 375,000 claims already backlogged to its 65 ALJs. She went on to state that from 2010 to 2013 their workload grew by 184% without increase in resources. They simply have not been able to keep pace with the rising caseload and have been falling further and further behind. The backlog of pending appeals has grown from 92,000 two years ago to over 460,000. In 2012 the weekly intake of new cases averaged around 1,250 and has risen now to around 15,000 per week.

The suspension will have a huge effect on providers who had a Medicare Contractor disallow claims paid. This means that the money is taken back until the appeal process decides whether it should be returned to the provider or not. It is important to note that historically, over half of the cases sent to OMHA are overturned; of the remaining cases, 37 percent are overturned through the departmental appeal process. As such, providers who have meritorious cases may have to wait years to see if the money taken from them can be returned.

On the appropriations front, the Senate Appropriations Committee has expressed concerns about both the growing backlog of cases at OMHA and the high rate of claims overturned by the Office. The Department is urged to work with providers at the early stages of the audit process so that only a small number of cases are ultimately appealed and to limit the loss of provider time, energy, and resources due to incorrect audit results. The Committee also is recommending additional funding for OMHA to hire more ALJ teams and increase its capacity to process its rising caseload. Their report on the budget for OMHA has the appropriation for 2013 at $71,867,000 and provides increases to $82,381,000 for 2014. But appropriations for HHS is being settled in January with the outcome uncertain.

The recent events have raised a huge outcry from the industry. In response to this, Griswold announced they are hosting an OMHA Medicare Appellant Forum on February 12, 2013 to provide further information and explain initiative underway to redress the problem and to provide information on measure being taken to increase efficiency of the operation.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2014 Strategic Management Services, LLC. Published with permission.