HHS developing new system to speed PRRB, other appeal processes

HHS and its subagencies continue to struggle with eliminating the backlog of appeals that has led to delays in payments to providers and litigation trying to get HHS to meet statutory requirements for hearing appeals. The two main appeals backlogs relate to Provider Reimbursement Review Board (PRRB) decisions (appeals by providers of final determinations by Medicare contractors) and individual appeals for Medicare coverage, payment, and premiums brought before the Office of Medicare Hearings and Appeals (OMHA).

PRRB

CMS is developing a system to electronically track and file PRRB and Medicare Geographic Classification Review Board (MGCRB) decisions, according to CMS officials speaking at a conference sponsored by the American Health Lawyers Association at the end of March. The current appeals process relies heavily on a manual, snail mail process that has added to the time it takes for parties to file all papers in preparation for a hearing. The “Office of Hearings Case and Document Management System (OH CDMS)” should be ready for use by the end of 2017. The OH CDMS will be accessible through the CMS Enterprise portal.

Using the new system, parties may:

  • file appeal requests
  • upload position papers, jurisdictional documents, and other supporting documentation
  • view documents issued by Board or filed by opposing party
  • manage issues raised in individual appeals and providers participating in groups
  • request other actions such as change in representative, expedited judicial review, mediation, etc., and
  • monitor case status

This new system also will be used by CMS Hearing Officers who hear appeals not covered by other CMS or HHS appeal avenues, such as:

  • Risk Adjustment Data Validation (RADV)
  • Medicare Advantage/Prescription Drug Plan (MA/PD)
  • Medicaid State Plan Amendments
  • Retire Drug Subsidy Determinations (RDS)
  • Organ Procurement Organizations (OPO)

The need for a more efficient way of handling all the filings related to an appeal was underscored by a presentation by Sue Anderson, PRRB chairperson. She noted that the PRRB currently has more than 10,000 cases on its docket. In fiscal year 2016, the PRRB issued 27 decisions that closed 66 cases; 147 expedited judicial determinations; and 497 jurisdictional determinations, so it has a long way to go to work through its backlog.

OMHA appeals

Issues with PRRB appeals aren’t even the most serious ones facing HHS. The Office of Medicare Hearings and Appeals (OMHA) has a backlog of hundreds of thousands of administrative appeals, and the American Hospital Association is engaged in long-standing litigation with HHS trying to force HHS to hold Administrative Law Judge appeals within 90 days. Currently, these appeals take 10 times longer, and the backlog grows every year. A recent filing by HHS in the litigation shows the seriousness of the issue: as of March 5, 2017, there were 667,326 pending appeals; HHS projects the number of pending appeals to grow to 1,009,768 by the end of FY 2021 (September 30, 2021).

OMHA is looking at a number of ways to deal with the backlog; (see OMHA trying to speed claims appeals process, April 18, 2017). One solution is legislation. Speaking at the Health Care Compliance Association (HCCA) Compliance Institute at the end of March, Kimberly Brandt, Chief Oversight Counsel for the U.S. Senate Committee on Finance, noted that the Senate is considering re-introducing the “Audit & Appeal Fairness, Integrity, and Reforms in Medicare Act.” The bill “seeks to increase coordination and oversight of government audit contractors while implementing new strategies to address growing number of audit determination appeals that delay taxpayer dollars from reaching the correct source,” according to Brandt. The bill also would encourage the use of voluntary alternate dispute resolution process to allow for multiple pending claims with similar issues of law or fact to be settled as a unit, rather than as individual appeals.

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.

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).

Hospital appeals settlement recipients identified by CMS

More than 2,000 hospitals that received almost $1.5 billion in total settlement money from CMS for fee-for-service denials based on patient status reviews for admissions prior to October 1, 2013, were identified by name, provider number, total claims settled, and amount of money received. The settlement, which was paid in 2015 at 68 percent of the net allowable amount, gave providers a guaranteed timely payment in exchange for withdrawing pending appeals that were tied up waiting through a large administrative hearing backlog. Settled claims numbers ranged from one to almost 3,000, with amounts paid between $0 and almost $16 million.

The settlement was a one-time offer by CMS to alleviate the burdens on the Medicare appeals system. The agency only settled claims for patients admitted prior to October 1, 2013, because it believed that the two-midnight rule, which began on that date, would reduce future appeals volume (see CMS offers partial payments for certain Part A hospital claims under appeal, Health Law Daily, September 3, 2014; CMS pays $1.3B to settle hospital inpatient claims, Health Law Daily, June 15, 2015).

The administrative hearing backlog remains a problem for CMS, which last month proposed regulations to improve the efficiency of the Medicare appeals process and address the increasing number of backlogged appeals waiting for administrative adjudication (Proposed rule, 81 FR 43789, July 5, 2016). The settlement offer was made nine months after Nancy Griswold, Chief Administrative Law Judge for HHS’ Office of Medicare Hearings and Appeals (OMHA), said that there were 375,000 claims waiting for adjudication and suspended new requests for hearings before an administrative law judge. As of April 2016, however, OMHA had over 750,000 pending appeals. The two-midnight rule, which did not have the desired effect of reducing appeals, has also ended after hospital backlash (see 1.5 percent payment cut overshadows end of Two-Midnight, Health Law Daily, August 3, 2016).