AHA’s motion calls for end of appeals backlog litigation

The American Hospital Association filed on October 14, 2016, a motion for summary judgment formally requesting mandamus relief instructing the Secretary of HHS to comply with mandatory statutory deadlines and clear the backlog of pending Medicare claims appeals. In the motion, the AHA agrees that the backlog cannot be cured overnight, but that “the Secretary has treated difficulty as an excuse for inaction.”

Motion for summary judgment

The AHA requests that that court order the Secretary to implement three sets of solutions for the backlog: (1) offer reasonable settlements to broad groups of Medicare providers and suppliers; (2) delay repayment of at least some subset of disputed Medicare claims and toll the accrual of interest on those claims for waiting times beyond the statutory maximums; and (3) impose financial penalties on recovery audit contractors (RACs) for poor outcomes at the administrative law judge (ALJ) level. The AHA claims that the Secretary has the authority to implement each reform to target the existing backlog of appeals and reduce the number of future appeals. The motion also gives the option for the Secretary to offer and implement proposals of her own that would have at least a significant effect on reducing the backlog and minimizing its impact in the interim.

Procedural history

The AHA, Baxter Regional Medical Center, Covenant Health, and Rutland Regional Medical Center (Medicare providers) asked the court to issue a writ of mandamus to compel HHS to process their long-pending Medicare claim-reimbursement appeals in accordance with statutory timelines. In December 2014, the D.C. district court declined to intervene to resolve the backlog of Medicare reimbursement appeals, stating that “the waiting game must go on.” Although the court agreed that HHS had violated its statutory obligations and reasoned that Recovery Audit Contractors (RAC) audits may have been worsening the problem, the court determined that it was not in a position to address the massive and growing administrative backlog because the problem required cooperation between Congress and HHS.

In February 2016, however, the D.C Court of Appeals revived the case and sent it back to the district court because the backlog of delays had gotten worse. At that time, the Court of Appeals instructed the district court that “in all likelihood,” it should order HHS to comply with the appeals deadlines if HHS or Congress failed to make meaningful progress toward solving the problem within a reasonable period of time. The court pointed to the close of the next appropriations cycle (September 30, 2016) as the deadline for resolution. In response, the Secretary asked the district court to stay the proceedings until September 30, 2017, to allow HHS to move forward on various efforts designed to tackle the backlog of reimbursement appeals. The D.C. district court denied HHS’ request to delay further proceedings in the case, holding that the Secretary’s proposals to reduce the claims review backlog and comply with statutory review deadlines would not result in meaningful progress.