HHS is ‘slowing’, not stopping, the Medicare appeals backlog

HHS will not be able to clear the backlog of Medicare appeals by its December 30, 2020, deadline, the agency said in a report to the U.S. District Court for the District of Columbia. HHS informed the court that due to a higher number of pending appeals than anticipated, without more money or resources, the agency will not be able to meet the deadline without violating its statutory requirement to decide appeals on the merits. Richard P. Kusserow, former HHS Inspector General (IG) and current CEO of Strategic Management, LLC, noted that the HHS position is not new. He said, “They have been making that argument from the beginning of the case.”

Mandamus

In February 2016, the D.C. Court of Appeals revived a 2014 case brought by the American Hospital Association (AHA) and three hospitals asking 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. On remand, the district court determined that because backlog numbers were unacceptably high, there were equitable grounds for mandamus. Accordingly, the court imposed a timetable, imposing increasing backlog reduction expectations, with elimination of the backlog of cases pending at the ALJ level by December 31, 2020 (see Court sets a timeline for Medicare claims backlog, December 6, 2016).

Status

The order granting a writ of mandamus instructed HHS to file status reports with the court every 90 days. The most recent report indicates that as of March 5, 2017, there are 667,326 pending appeals at the Office of Medicare Hearings and Appeals (OMHA). HHS projections put the number of expected pending appeals at 1,009,768 by the end of FY 2021, higher numbers than those found in previous HHS estimates. Because the backlog is not a static obstacle, despite some resolution through settlement or formal adjudication, the agency has struggled to keep appeals numbers from growing. Kusserow said, “The best that they have been able to accomplish to date has been slowing the backlog development.” According to HHS, the revised projections are the result of setbacks from lower than expected provider interest in the agency’s settlement initiatives and stalled settlement discussions.

New rule would allow attorney adjudicators, precedential Council decisions

In light of the incredible administrative backlog of Medicare appeals, CMS has proposed some changes to the appeals process. The agency now finds it appropriate to allow the chair of the Departmental Appeals Board (DAB) to deem Medicare administrative council (MAC) decisions precedential. The Proposed rule also suggests allowing attorney adjudicators to issue decisions that do not involve a hearing, dismissals for withdrawn hearing requests, and remands for information.

Never going to catch up

In fiscal year (FY) 2014, each administrative law judge (ALJ) in the Office of Medicare Hearings and Appeals (OMHA) issued an average of 1,048 decisions and ordered over 450 other claims to be dismissed. Despite this increased productivity, the number of requests for hearings and reviews of QIC and IRE dismissal continue to grow. OMHA currently has the capacity adjudicate about 77,000 claims annually, but over 750,000 appeals were pending on April 30, 2016. In order to address these issues, HHS intends to implement new rules in an attempt to (1) request new resources for all levels of appeal; (2) reduce the number of pending appeals; and (3) reform legislation to allow new funding and new review authority.

Precedential decisions

MAC decisions are considered the final administrative decision, and once they are issued a party may proceed to judicial review. In 2004, HHS determined that precedential authority was not yet appropriate for these decisions, at least until after changes required under the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA) (P.L. 106-554) and the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) (P.L. 108-173) were implemented. Now that they are, CMS proposes that the chair of the DAB have the authority to designate a MAC decision precedential in order to provide a “consistent body of final decisions of the secretary upon which [appellants] could determine whether to seek appeals.” CMS also believes that this would assist all adjudicators by providing clarity on some legal and policy issues.

When a decision is declared precedential, notice would be provided in the Federal Register, posted on an HHS website, and would bind all lower-level decision-makers. This includes all CMS components, HHS components that adjudicate under CMS jurisdiction, and on Social Security Administration (SSA) components that are also under CMS jurisdiction. The decision will no longer be binding if CMS revises the relevant authority or provision, such as manual instructions.

Additional Adjudicators

Certain appealable decisions by the SSA or Medicare contractors come with a right to a hearing before an ALJ. However, some hearing requests may be addressed without actually conducting a hearing. If the parties agree in writing that they do not wish to attend a hearing, or if the evidence supplied supports a finding for the appealing party on every issue, the ALJ may issue a decision on the record without a hearing. ALJs also receive a large number of requests to withdraw hearing requests. CMS proposes to allow attorney adjudicators to issue decisions in the following instances:

  • when decisions can be issued without a hearing;
  • dismissals when a hearing request is withdrawn; and
  • remands for information that can only be provided by CMS, CMS contractors, or at the direction of the MAC.

The rules would allow decisions and dismissals issued by attorney adjudicators to be reopened or appealed in the same manner as ALJ decisions. CMS states in its Proposed rule that allowing attorney adjudicators these powers would allow ALJs to focus on cases that include a hearing.