Kusserow’s Corner: New Pilot Programs to Address ALJ Appeals Backlog

The HHS Office of Medicare Hearings and Appeals (OMHA) announced earlier this year a temporary suspension of assignment of new Medicare appeals to administrative law judges (ALJs) for at least 28 months as a result of the significant backlog. To address the significant backlog of Medicare administrative appeals at the ALJ level, OMHA has posted information about two pilot programs that providers with Medicare appeals pending before an ALJ may use to resolve claims. They are:

  1. A Settlement Conference Facilitation (SCF) Pilot, which is an alternative dispute resolution process applicable only to Medicare Part B claims. At least 20 claims or $10,000 must be at issue.
  1. A Statistical Sampling Pilot, under which a provider would agree to allow OMHA to adjudicate a group of appeals using statistical sampling.

SCF Pilot

The SCF is a pilot alternate dispute resolution process designed to bring the appellant and CMS together to discuss the potential of a mutually agreeable resolution to the claims appealed to an ALJ hearing. If a resolution is reached, a settlement document is drafted by the facilitator to reflect the agreement. The document is signed by the appellant and CMS at the settlement conference session. As part of the agreement, the requests for an ALJ hearing for the claims covered by the settlement will be dismissed. The facilitator, an OMHA employee, uses mediation principles to assist the appellant and CMS in working toward a mutually agreeable resolution. The facilitator does not make official determinations on the merits of the claims at issue and does not serve as a fact finder, but may help the appellant and CMS see the relative strengths and weaknesses of their positions. To be eligible for the SCF process:

  • The request for hearing must appeal a Qualified Independent Contractor’s (QIC) reconsideration of a claim for Medicare Part B items or services;
  • Appellant must be a Medicare provider or supplier;
  • Beneficiary must not have been found liable after the initial determination or participated in the QIC reconsideration;
  • All jurisdictional requirements for an ALJ hearing must be met for the request for hearing and all appealed claims;
  • Request for hearing must have been filed in 2013 and not currently assigned to an ALJ;
  • Amount of each individual claim must be less than $100,000. For the purposes of an extrapolated statistical sample, the extrapolated amount must be less than $100,000.
  • At least 20 claims must be at issue, or at least $10,000 must be in controversy if fewer than 20 claims are involved;
  • There cannot be an outstanding request for OMHA statistical sampling for the same claims; and
  • Request must include all of the appellant’s pending appeals for the same item or service at issue that meet the SCF criteria.

Statistical Sampling Pilot

The Statistical Sampling Pilot is limited to appellants that are single Medicare providers or suppliers; multiple providers or suppliers may qualify if the owning entity agrees to accept or make any Medicare payment due as a single payment. To participate, a provider must identify a group of at least 250 claims, all of which fall into one of the following categories: pre-payment claim denials; post-payment non-RAC claim denials; or post-payment RAC claim denials. Claims also must meet all jurisdictional requirements for hearing before an ALJ. Currently, OMHA will only allow statistical sampling for appeals currently assigned to an ALJ but not scheduled for hearing, or appeals filed between April 1 and June 30, 2013. Once a provider has requested statistical sampling, OMHA will secure an independent statistical expert to assist the ALJ with conducting the sampling according to existing CMS guidance. The provider will receive a pre-hearing conference with an ALJ to establish that the provider has consented to the process, as well as to establish the claims from which a sample will be drawn. The ALJ will then issue a pre-hearing conference order, after which participation in statistical sampling becomes binding. The universe of claims will then be consolidated into one appeal, and the ALJ will hold a hearing and issue a decision on the sample units drawn from the larger group. A Medicare contractor will then extrapolate the ALJ’s decision on the sample claims to the larger universe of claims. The appropriate Medicare Administrative Contractor (MAC) will be directed to effectuate the decision based on the extrapolated amount.

Appellants who are eligible and interested in the pilot must complete a written request for sampling along with a detailed spreadsheet of claims for consideration. OMHA has included template request documents. Hospitals may be interested in evaluating whether or not initiating the pilot will be beneficial. While this may expedite the adjudication of long-awaiting appeals, the downsides of this project should also be considered.

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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