New resolution opportunities in the Medicare appeals process

Andrew B. Wachler (awachler@wachler.com) is the Managing Partner and Erin Diesel Roumayah (eroumayah@wachler.com) is an Associate Attorney with Wachler & Associates, PC in Royal Oak, MI.

Congress designed Medicare’s administrative appeals process as an expedited resolution process for denied Medicare reimbursement claims. In fact, the Social Security Act prescribes specific timeframes within which Medicare appeals must be decided at each level of the administrative appeals process.[1] At the third level of the appeals process, which involves a hearing before an Administrative Law Judge (ALJ), Medicare appeals must be heard and decided within 90 days of a receipt of a request for hearing. According to statistics released by the Office of Medicare Hearings and Appeals (OMHA), the division of the U.S. Department of Health and Human Services (HHS) that administers ALJ hearings, beginning in 2008, OMHA began to receive more ALJ appeals than it could process, creating a backlog in the appeals process. In 2009, OMHA’s average appeal processing time was 94.9 days, largely complying with federal mandate. That figure has steadily risen each consecutive year, and in 2017, OMHA’s average appeal processing time exceeded 1,057 days.[2]

The excessive adjudication delay has taken a significant financial toll on the Medicare provider and supplier community. The American Hospital Association (AHA) estimated that the value of Recovery Audit Contractor (RAC) appealed claims exceeded $1.8 billion. This figure does not include the value of non-RAC appealed claims, which are also caught in the appeals backlog.[3]

Medicare providers and suppliers have called upon HHS, Congress, and the Courts to fashion remedies to the backlogged appeals process. The Audit & Appeals Fairness, Integrity, and Reforms in Medicare Act of 2015 (AFIRM) (S.2368) was introduced in the Senate and placed on the Senate legislative calendar on December 8, 2015. AFIRM proposed several reforms to the Medicare audit process, and although Congress has taken no action on AFIRM in well over two years, HHS has implemented on its own accord various reforms to the Medicare appeals process that are discussed in greater detail below. Judicial relief has been similarly slow. In 2014 the AHA and other healthcare providers filed suit in federal court against HHS, seeking a court order that HHS clear the backlog and comply with the 90-day statutory timeframe for ALJ hearings. The case is currently pending on remand before the United States District Court for the District of Columbia to evaluate HHS’s claim that it is legally impossible to comply with a four-year resolution timetable as proposed by the AHA to reduce the backlog. According to this timetable, HHS would be required to reduce the backlog by 30% by 2018, 60% by 2019, 90% by 2020, and 100% by 2021.[4]

Congressional and judicial relief has been slow, but over the past years, HHS has released various initiatives to both reduce the backlog of pending appeals and curtail the filing of new appeals in the Medicare appeals process. These initiatives are welcome opportunities for Medicare providers and suppliers to achieve expedited resolution to pending appeals.

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