On December 5, 2016, Judge James Roasberg of the United States District Court for the District of Columbia issued a decision ordering the U.S. Department of Health and Human Services (HHS) to eliminate its massive backlog of Medicare billing appeals within the next five years. The court’s decision in American Hospital Association et al. v. Burwell requires HHS to reduce the backlog of cases pending before administrative law judges by 30 percent by the end of next year, by 60 percent by the end of 2018, by 90 percent by the end of 2019, and completely by the end of 2020.

By way of background, the Medicare appeal process establishes five levels of appeal: redetermination by a Medicare Administrative Contractor (MAC), reconsideration by a Qualified Independent Contractor (QIC), hearing before an Administrative Law Judge (ALJ), review by the Medicare Appeals Council, and judicial review in federal district court. The applicable statute and regulations mandate that an ALJ conduct a hearing and render a decision within 90 days from the date the request for hearing is filed. However, due to a large backlog of appeals at the Office of Medicare Hearings and Appeals (OMHA), the current average wait time is more than five times the turnaround time mandated by statute. According to HHS, OMHA experienced a 442 percent increase in the number of appeals it received annually from fiscal year 2010 through fiscal year 2015, with more than 750,000 pending appeals as of April 30, 2016, and a capacity to decide only 77,000 appeals per year.

Although the court in AHA v. Burwell accepted the AHA’s proposed target-based timeline described above, it rejected the AHA’s proposal that if any appeals not raised during 2020 are still pending on January 1, 2021, then all of those claimants would win their cases by default judgment. Instead, the court held that if HHS fails to meet the deadlines set out by the court, the plaintiffs may move for default judgment or to otherwise enforce the court’s order.
In addition to the court’s order, the Centers for Medicare & Medicaid Services (CMS) has itself taken steps to alleviate the appeals backlog. For example, beginning on December 1, 2016, as part of the Hospital Appeals Settlement Process, CMS made available an administrative settlement process for inpatient status claims. That process is open to eligible hospitals willing to withdraw certain pending appeals in exchange for timely partial payment—66 percent of the net allowable amount. Facilities that are eligible to submit a settlement request include acute care hospitals and critical access hospitals. Eligible hospitals interested in taking part of the program must submit an Expression of Interest on or before January 31, 2017. The 2016 settlement program is a reincarnation of a similar program offered in 2014.

Notwithstanding the Hospital Appeals Settlement Process and the court’s order in AHA v. Burwell, the majority of healthcare providers will still be required to wait substantially longer than 90 days before they can avail themselves of a hearing as required by federal law. The attorneys at Chilivis Grubman represent healthcare providers of all types and sizes in connection with audits by both government and commercial payors, as well as throughout the entire appeals process. For any questions, or if we can be of any assistance with such a matter, please contact us at (404) 262-6505 or sgrubman@cglawfirm.com.