Hospitals to HHS: ‘Impossible’ is not an excuse for backlog

The American Hospital Association (AHA) is not buying HHS’ reasons for the large backlog of Medicare claims appeals. According to the AHA’s reply brief in its appeal to the U.S. Court of Appeals for the District of Columbia for mandamus, Burwell “throws up her hands and claims that ‘it is currently impossible…to adjudicate claims’ in accordance with statutory deadlines.” The AHA stated that Secretary Burwell has ways to resolve the backlog.

Backlog

According to the Office of Medicare Hearings and Appeals (OMHA), the average processing time for claims appeals for fiscal year (FY) 2015 so far is 615 days. This is the longest amount of time by far in recent years, and the average has risen about 200 days each year between FY 2013 and FY 2015. HHS is statutorily required to provide administrative law judge (ALJ) decisions in 90 days.

Litigation

The AHA, in conjunction with several hospitals, filed suit against HHS over the hefty backlog, but the district court decided not to intervene. The court’s decision noted that recovery audit contractors (RACs) might be worsening the problem and agreed that HHS had violated its statutory duties, but determined that the solution should come from cooperation between Congress and HHS. RACs audit favorable Medicare administrative contractor (MAC) decisions and receive a commission for recovering improper payments. The hospitals argued that RACs were motivated to over-audit, leading to unnecessary appeals and further burdening the process. The court declined to force HHS to reduce the use of RACs and tell HHS to ask Congress for additional funding (see Court refuses to break the ‘logjam’ of Medicare appeals, Health Law Daily, December 22, 2014).

Mandamus relief

The AHA’s reply brief states that there is no “impossibility” exception to mandamus relief, despite Burwell’s claims. To receive a writ of mandamus, which in this case would require HHS to meet the timetables established by regulations, a plaintiff must demonstrate the following three requirements: (1) clear right to relief, (2) HHS’ clear duty to act, and (3) the absence of adequate alternative remedies. Established case law states that mandamus should issue if there is a delay “so egregious as to warrant intervention” once those requirements are satisfied. The AHA points out that the district court agreed that those requirements were satisfied but stated that the delays were not egregious enough. The brief disagrees and points out that hospitals are forced to find ways to provide quality patient care with less money as millions of reimbursement funds stagnate in the appeals process.