OMHA trying to speed claims appeals process

The Medicare appeals backlog, which at its pinnacle had more than 650,000 claims waiting for adjudication before an administrative law judge (ALJ), is shrinking, according to Office of Medicare Hearings and Appeals (OMHA) chief ALJ Nancy Griswold. Griswold told attendees at the Health Care Compliance Association’s (HCCA) Compliance Institute that OMHA is pursuing a number of initiatives to reduce the backlog and speed claim resolution. Joined by Andrew B. Wachler of Wachler & Associates, Griswold discussed policy and regulatory changes to the appeals process, and Wachler shared best practices.

OMHA is doing a demonstration project using voluntary formal telephone discussions with durable medical equipment (DME) suppliers in Medicare Administrative Contractor (MAC) Jurisdictions C & D. These discussions give the supplier an opportunity to present facts and additional documentation to support resolution of the appeal. According to Griswold, over 5,000 appeals have favorably resolved through the demonstration project, while more than 16,000 have been remanded to reopen or resolve the claim favorably. The agency is also working on settlement conference facilitation (resolving more than 10,000 appeals since June 2014), adjudication through statistical sampling, and use of a senior attorney on the record.

Griswold also discussed OMHA’s plans for the Electronic Case Adjudication Processing Environment (ECAPE). Release 1, which consists of a public portal for case intake and appellants, is scheduled for Spring 2017, with additional releases planned through Summer 2018.

Wachler explained that preparation is key for attorneys representing clients in appeals before OMHA, and explained that best practices include prominently listing the Medicare Appeal Number, ensuring that all information submitted is accurate and consistent, documenting proof of service, submitting only one request per Medicare Appeal Number, and keeping track of all due dates. He also recommended that attorneys wait until an ALJ is assigned to the case before attaching evidentiary submissions or additional filings; rather than submitting that information to OMHA Central Operations, Wachler says it can be directly submitted to the ALJ.

‘Don’t wait, facilitate!’ HCCA webinar encourages Medicare settlement

Providers should rely on settlement and facilitation processes when resolving Medicare audit appeals, according to a Health Care Compliance Association (HCCA) webinar presented by health care attorney Andrew Wachler of Wachler & Associates, P.C. In addition to providing advice regarding appeal processes and strategy, Wachler encouraged providers to rely on the newly reopened hospital appeals settlement process and the Settlement Conference Facilitation (SCF) Pilot.

Settlement process

CMS reopened the hospital appeals settlement process, allowing eligible hospitals to settle inpatient status claim appeals in exchange for timely partial payments (66 percent of net allowable amount). The settlement process is available, as of December 1, 2016, and the deadline for hospitals to submit an expression of interest is January 31, 2017. Eligible claims include claims denied by CMS on the basis that services may have been reasonable and necessary while treatment on an inpatients basis was not. Additionally, the settlement applies to claims with dates of admission prior to October 1, 2013.

SCF

In his discussion of the SCF pilot process, Wachler admonished listeners: “don’t wait, facilitate.” The SCF pilot was designed to bring CMS and an appellant together to discuss the potential for settlement of claims appealed to an administrative law judge (ALJ). When a settlement cannot be reached under the process, claims return to the ALJ level. Under Phase I of the program, which began in June 2014, the pilot facilitated settlements of Medicare Part B claim appeals, for ALJ hearing requests filed in 2013. In Phase I, the pilot resolved over 2,600 unassigned Part B ALJ Appeals. Phase II expanded the pilot in October 2015 for additional Part B claims and the program was further expanded for Part A claims in February 2016. However, each phase imposed specific claim eligibility requirements, regarding the kinds of claims at issue and the amount in controversy. Wachler noted, unlike the hospital settlement process, which mandates a 66 percent settlement rate, the SCF pilot allows providers to reach an agreement regarding the amount of the settlement.

ALJ appeals

In circumstances where settlement or facilitation is not available, providers may be forced to resolve claims before an ALJ. Wachler offered the following best practices for ALJ appeals:

  • prominently list Medicare Appeal Number on the request;
  • ensure beneficiary information matches Medicare Appeal Number;
  • list beneficiary’s full identification number;
  • include first page of the qualified independent contractor (QIC) decision or prominently list full name of the QIC;
  • document proof of service to other parties;
  • do not submit a courtesy copy to the QIC
  • submit only one request per Medicare Appeal Number;
  • mail requests via tracked mail to the Office of Medicare Hearings and Appeals (OMHA) Central Operations;
  • do not submit evidence already submitted at a lower level;
  • do not attach evidentiary submissions or submit additional filings to OMHA Central Operations; and
  • submit directly to the ALJ when an ALJ is assigned.

Additionally, Wachler recommended the OMHA case-processing manual as an important resource regarding ALJ process for any parties appealing to the ALJ level.

AHA not buying into OMHA’s backlog reduction plan

The American Hospital Association (AHA) submitted comments on August 26, 2016, on the HHS Proposed rule (81 FR 44456, July 7, 2016) intended to reduce the Medicare appeals backlog in the Office of Medicare Hearings and Appeals (OMHA), arguing that the proposal barely scratches the surface of the issue and “that merely tweaking the appeals system will not adequately address the problem.” At best, the AHA stated, the proposals would take five years to eliminate the backlog. The association cautioned that attorneys should only be permitted to adjudicate cases after thorough training and expressed concern with the lack of detail in the OMHA’s suggestion that certain decisions be designated as precedential.  It also rejected the OMHA’s proposals to eliminate the requirement that administrative law judges (ALJs) issue a decision within 90 calendar days of receiving a request for hearing and limit adjudicators’ ability to issue decisions without hearings when CMS or its contractor becomes a party to an appeal.

Proposed rule

The Medicare appeals backlog is a source of great concern for providers.  As of April 30, 2016, over 750,000 appeals were pending, while the OMHA only had the capacity to adjudicate 77,000 per year (with an additional capacity of 15,000 by the end of fiscal (FY) year 2016). The AHA noted that the most recent data reflect an increase in average processing time of 140 days—to 935.4 days, or two and a half years—since the beginning of FY 2016. In an effort to address this backlog, CMS issued a Proposed rule that would allow attorneys, in lieu of ALJs, to adjudicate certain decisions that would not go to hearing, and permit the Chair of the Departmental Appeals Board (DAB) to designate certain final Medicare Administrative Council decisions as precedential. However, it would also limit adjudicators’ ability to issue decisions without hearings when CMS or one of  its contractors becomes a party to a case and would eliminate the mandatory 90-day time period that adjudicators have to issue decisions.

AHA comments

Although the AHA conceded that the use of attorney adjudicators could address matters that do not require ALJ attention, including those decisions that can be issued without a hearing, those cases in which an appellant withdraws a request for hearing, and those appeals which must be remanded for information that can only be provided by CMS or a contractor,  it cautioned that attorneys must be properly trained to ensure they have “significant knowledge of and experience in applying Medicare regulations.”

The association was not accepting, however, of CMS’s proposal to allow the DAB Chair to designate select decisions that address repetitive legal and policy questions as precedential, and to designate factual decisions as precedential where relevant facts are the same and the underlying factual circumstances have not changed since the decision was issued. The AHA expressed “strong concerns” regarding the lack of specifics included in the proposal, noting, “it is difficult to evaluate the merits of the proposal, but easy to speculate how it could harm appellants if the process favors decisions that are beneficial to CMS.” Instead, it suggested gathering stakeholder feedback and engaging in future notice-and-comment rulemaking.

The AHA specifically opposed the proposal to amend 42 C.F.R. sec. 405.1016, which states that, after a qualified independent contractor (QIO) has issued a reconsideration, “the ALJ must issue a decision, dismissal order, or remand . . . no later than the end of the 90 calendar day period beginning on the date the request for hearing is received,” (emphasis added) by removing the word “must.” According to the AHA, the OMHA indicated that the requirement is not absolute, since appellants are statutorily permitted to escalate claims when the timeframe is not met.  The AHA referred to the reasoning as “too clever by half,” noting that amending the regulation would do nothing to eliminate the statutory mandate.

The association also rejected proposed changes to 42 C.F.R. sec. 405.1038(a), which currently states that ALJs may issue a decision without notice or hearing where the evidence on record “supports a finding in favor of appellant(s) on every issue.” According to the AHA, the proposed changes, which would prevent an adjudicator from issuing such a decision where CMS or its contractor chooses to become a party to the appeal, could allow contractors to force a hearing to justify inappropriate denials.

Ongoing issues

The AHA argued that HHS has refused to acknowledge that the backlog results predominately from “excessive inappropriate denials of claims by Medicare contractors, and specifically the Recovery Audit Contractors (RACs),” which have financial incentives for denying claims. While recognizing that the OMHA cannot control the RAC process, the AHA encouraged the agency to provide information about the process to Congress.  It also continued to urge the OMHA to:

  • delay recoupment of payments until an appeal is decided and prevent interest from accruing prior to a decision;
  • eliminate the one-year filing limit to rebilled Part B claims and allow hospitals to submit Part B claims within 180 days of a final Part A claim denial determination;
  • create a defined time period during which RACs may audit providers on a particular issue, after which RACs must petition CMS to perform additional audits on the issue, but only after a defined time period has passed, during which providers have been educated; and
  • codify, in regulation, a statement made in the FY 2014 inpatient prospective payment system Final rule that Medicare contractors may only evaluate the medical necessity of an inpatient stay based on “the information available to the admitting practitioner at the time of the admission” (78 F.R. 50495, August 19, 2013).