HHS Holds Forum on Medicare Appeals Backlog
October 30, 2014 10:13 AM
The Office of Medicare Hearings and Appeals (OMHA) at the US Department of Health and Human Services held its second forum to review the status of its efforts to reduce the huge backlog of pending appeals before Administrative Law Judges (ALJ) that has crippled the system. In late December 2013, OMHA revealed that it had suspended the assignment of cases to ALJs because of the mounting backlog. At that time over 600,000 appeals were pending assignments to ALJs and OMHA indicated that the suspension on case assignments would last at least two years. The status report at today’s forum painted an even worse picture despite incredible efforts by OMHA to add resources and reach new heights of efficiency.
Presently, the average processing time following assignment of an appeal to an ALJ is 514 days in contrast to the 90-day requirement under Medicare law. That does not show a full picture, as it does not include the wait time prior to case assignment - a tenure that is expected to exceed two years.
Additionally, the case backlog now exceeds 900,000. With each ALJ team expected to clear 1,000 cases annually, there is no way that the backlog can be significantly reduced without major new resources, alternative resolution processes, or a dramatic change in the volume of claim denials entering the system every week. OMHA recently added seven new ALJ teams in a new office in Kansas City. That office has a proposed budget of 18 teams in the FY 2015 budget of the President. At best, increasing the ALJs by another 11 puts nothing more than a tiny dent in the ever-increasing backlog.
OMHA is also pursuing a number of initiatives to improve efficiencies such as increasing electronic appeal processing. It is clear that OMHA is do what it can within its limited resources to address the surge in appeals caused by increased claim reviews by MACs, PSC/ZPICs and RACs. However, at nearly 14,000 new ALJ appeals each week, those efforts cannot meet the demand.
One promising development is the recently unveiled administrative settlement process instituted by the Centers for Medicare and Medicaid Services (CMS) that currently is limited to hospital appeals. CMS focused that process on hospitals because that sector’s appeals made up the majority of Part A cases in the system. The settlement design offers the opportunity for a hospital to take 68 cents on the dollar of the amount in controversy if it agrees to drop its appeals. An OMHA official indicated that an estimated 50% of hospital appeals before ALJs may be resolved through this process.
While the impact of hospitals settling their appeals will have a material impact on the ALJ backlog, it will fall far short of what is needed to get the system in line with the required 90 day standard. Earlier this year, NAHC proposed using a settlement system comparable to that now available to hospitals for any pending home health or hospice appeals. With this new information on the backlog, NAHC will heighten its efforts to secure such an option for providers. CMS did not formally reject the NAHC proposal, but instead implemented it just for the hospitals. At that time, HHAs and hospices had less than 30,000 pending ALJ appeals in contrast to the several hundred thousand hospital appeals.
NAHC is also considering filing a lawsuit to challenge the appeals delays. The CMS settlement option for hospitals first surfaced in response to a lawsuit brought by the American Hospital Association seeking enforcement of the 90 day standard.
More information about the OMHA forum ad the initiatives taken to reduce the backlog can be found at www.hhs.gov/OMHA.