Medicare to Eliminate Appeals Backlog Within 4 Years, HHS Tells Judge

That timeline may not be good enough, since the judge previously ordered HHS to clear the backlog by December 31, 2020.

For years the Health and Human Services Office of Medicare Hearings and Appeals (OMHA) has been unable to keep up with the number of cases it receives, leading to a mountainous backlog of pending appeals.

That backlog shrank, however, by more than 30% in the past year, dropping from more than 650,000 pending appeals last year to less than 445,000 late last month, according to documents HHS filed Friday in federal court. The decline is projected to continue, with the backlog to be eliminated entirely within about four years.

Thanks to a boost in appropriations from Congress, OMHA plans to hire about 80 more administrative law judges (ALJ), enabling the office to catch up ultimately during fiscal year 2022, HHS told U.S. District Court Judge James E. Boasberg in the D.C. District Court. But that timeline may not be good enough, especially since Boasberg previously ordered HHS to eliminate the backlog by December 31, 2020.

The American Hospital Association, which filed suit in 2014 to compel HHS to solve the problem, seems unsatisfied already. A spokesperson for the hospital lobbying group tells HealthLeaders that AHA plans to file a formal response this Friday.

The government, meanwhile, has asked the judge to hold off on granting AHA's pending motions, arguing that HHS should, at most, be required to provide periodic status reports to the court.

Boost in Appropriations
 

After years of HHS explaining that it needed more money to end the OMHA backlog, Congress boosted the office's appropriation by 70% last March, to more than $182 million, according to a declaration by OMHA Chief Administrative Law Judge Nancy J. Griswold included with last week's HHS filing.

With the added financial resources, OMHA plans to hire about 80 more ALJs and 600 new staffers over the next 14 months or so, bringing the office's total workforce to about 170 ALJ teams.

That expansion will double OMHA's annual case-processing capacity from 85,000 appeals to nearly 188,000 appeals, HHS told the judge.

But there's more at stake in this case than OMHA's years-long waiting room.

Beyond the Backlog
 

After an invitation from the judge, AHA made several recommendations in June for how the government might reduce its backlog. One of those recommendations called for HHS to penalize recovery audit contractors (RAC) that have a high number of their denials overturned.

In its filing Friday, the government argued that following AHA's recommendation on RACs would violate federal law and that the proposed solution would not solve the problem.

The number of RAC-related appeals has declined steadily in recent years, representing just 1.4% of the appeals OMHA has received in 2018, according to the HHS filing. Although RAC-related cases represented 58% of pending appeals in fiscal year 2015, they now represent only 12.6% of OMHA's pending appeals, the government said.

"The data show that AHA's fundamental premise underlying this litigation—that the RACs are the drivers of the backlog and that further changes to the RAC program are needed to solve the problem—is no longer valid," the HHS filing states.

"AHA’s latest RAC-related proposals thus would not help to reduce the backlog but likely threaten the economic viability of an already significantly curtailed program that Congress requires to exist," the filing adds.

The government explained, further, that it has imposed stricture controls on RACs,

"These changes include a number of procedural adjustments to the RAC program, including restricting the number of topics RACs can review, limiting their authority to request additional documents, and limiting the lookback period for inpatient-status appeals (a type of claim that was one of the short-term drivers of the backlog)," the HHS filing states.

Interest Groups Clash
 

Kristin Walter, spokesperson for The Council for Medicare Integrity, wrote an op-ed last month for The Hill criticizing AHA's proposals to solve the backlog, arguing that AHA "is more interested in sidelining the Recovery Audit Contractor (RAC) program than fixing the Medicare appeals backlog."

Walter cited statements by Griswold, the HHS Office of Inspector General, and the Government Accountability Office as evidence that providers are to blame for the Medicare appeals backlog.

The AHA shot back with an op-ed of its own, pointing out that Walter speaks for a group run by RAC executives. The article insisted that RACs have been the major driver of the problem.

"Before these contractors began to deny huge numbers of Medicare claims, there simply was no backlog in appeals. Only after the contractors began their work did the backlog develop," AHA General Counsel Melinda Hatton wrote. "That is because hospitals appealed tens of thousands of claims that they concluded the Recovery Audit Contractors—who are paid on a contingency basis—had incorrectly denied."

"Because the Recovery Audit Contractors caused the problem in the first place, the AHA continues to focus on them as a means to fix the problem," Hatton added.

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