Medicare ALJ Hearings to Experience Significant Delays
January 9, 2014 09:42 AM
The Office of Medicare Hearings and Appeals (OMHA) revealed this week that it is suspending the assignment of most new requests for an Administrative Law Judge (ALJ) hearing because it has “been unable to keep pace with the exponential growth in requests for hearing.“ While OMHA will continue to assign and process hearing requests filed directly by Medicare beneficiaries, it does not expect to resume assignments of other appeals by providers for at least 24 months with post-assignment hearing wait times continuing to exceed 6 months. That means that home health agencies and hospices that file for an ALJ hearing in January 2014 should anticipate that the hearing will be held no sooner than June 2016.
The OMHA explains that the scheduling problems stem from an “exponential growth in requests for hearing.” Currently there are nearly 357,000 claims that have already been assigned to the 65 ALJs that hear Medicare appeals. In less than two years, pending appeals rose from 92,000 to over 460,000 with weekly appeal receipts growing from 1,250 to over 15,000. These appeals come from all Medicare benefit sectors, including home health and hospice. The massive increase in appeals is concurrent with the expanded volume of claims reviews and expanded number of Medicare contractors reviewing claims. The MACs, ZPICs, and RACs have all contributed to the number of claim denials that result in appeals. For example, home health agencies have experienced a surge in retroactive claim denials related to the physician face-to-face encounter requirements.
While OMHA explains that it is doing everything possible within its shrunken budget to adjudicate appeals on a timely basis, it essentially admits that it will not be able to comply with the required timeframe for fully processing ALJ hearing appeals. Federal regulations require that ALJ hearing appeals be completed within 90 days following the date that the request is received by OMHA. However, if that timetable is not met, the only remedy available to an appellant is to accelerate an appeal to the Medicare Appeals Council which then has 180 days to decide the appeal or permit an escalation to the Federal District Court. Such remedies are not considered to be of any great value.
By and large, the action of OMHA is one salvo in the annual battle over funding and resource allocation with the Department of Health and Human Services. However, this time the consequences to health care providers is significant as the volume of contested claim denials continues to grow dramatically. If Medicare continues to ramp-up claims reviews, it should expect to do the same to the resources committed to appeals, especially at the ALJ level where providers find the fairest and most complete level of review. In addition, HHS should evaluate the quality and accuracy of the claim determinations as a way of potentially reducing appeal workload. ALJ reviews have consistently led to high rates of reversals of claim denials. If the initial claim review quality is enhanced, the demand on the appeals system for corrective actions should be significantly reduced.
In addition to the delays that are occurring with the ALJ appeals, Medicare providers are impacted by the recoupment of any alleged overpayments. Under Medicare law, there is no recovery of an overpayment through the first two stages of an appeal. Following an unsuccessful “reconsideration” appeal to the QIC, a provider will face a payment recovery even if an appeal is filed with an ALJ. With an expected 30-month period for current ALJ appeals, providers face an extended period of financial losses.
NAHC is evaluating what the next best action steps should be employed to address this growing problem. No quick solutions are expected. In the meantime, NAHC recommends that HHAs and hospices continue to pursue ALJ appeals whenever they deem appropriate, but they should factor in the financial implications in their own operations that account for the delay in the appeal resolution.