Senators Highlight Urgency of Reducing Medicare Appeals Backlog
April 29, 2015 09:00 AM
The US Senate Finance Committee today held a hearing on how to make the Medicare audits and appeals system more efficient. The Medicare appeals system is currently backlogged with at least 500,000 cases pending review. During the hearing titled, “Creating a More Efficient and Level Playing Field: Audit and Appeals Issues in Medicare,” Senators heard testimony from three witnesses, each representing a different level of appeal.
In his opening statement, Senate Finance Committee Chairman Orrin Hatch (R-UT) noted that preventing improper Medicare payments is a “serious issue.” However, he said that the “insurmountable increase in appeals” has resulted in long delays for beneficiaries to find out whether their services are covered. “When any Medicare contractor – either an auditor or a contractor that processes claims – decides that a claim should not be paid, it has a real effect on beneficiaries and providers, which is why it is so important that the appeals process allow these appeals to be heard in a timely and consistent fashion.”
Hatch also raised concern about the fact that the majority of payment appeals are found in favor of the defendant. He cited statistics from the Department of Health and Human Services, Office of Inspector General, stating that over 60 percent of appeals were found in favor of the defendant. “Such a high rate of reversals raises questions about how the initial decisions are being made and whether providers and beneficiaries are facing undue burdens on the front end,” he said, noting that Administrative Law Judges have “more flexibility in their decision-making than Medicare contractors do.”
Senate Finance Committee Ranking Member Ron Wyden (D-OR) stated similar concerns about the backlog. “Today, the backlog of cases is so enormous that the door to new appeals is closed; new cases are no longer being heard,” he said in his opening statement. “The number of cases sent to the Office of Medicare Hearings and Appeals has soared from 60,000 in fiscal year 2011 to 654,000 claims in fiscal year 2013. That’s an astonishing 10-fold jump in only two years.”
Wyden said that while the number of cases has increased, the number of hearing officers has remained the same. “It’s no wonder that the appeals system is buckling under its own weight and that the average time to process a claim is now 560 days,” he said.
The backlog is having a real impact on the lives of beneficiaries, Wyden said. “We have a duty to ensure that seniors receive the care they are rightfully entitled to receive under Medicare. We also have an equal duty as custodians of taxpayer dollars to ensure those dollars are spent in the best possible manner. To balance both these goals we need some fresh thinking.”
The witnesses included Sandy Coston, CEO and President of Diversified Service Options, Inc., a contractor with the Centers for Medicare & Medicaid Services (CMS) that handles the first level of appeal; Thomas Naughton Senior Vice President, MAXIMUS Federal Services, Inc., a CMS contractor that handles the second level of appeal; and Nancy Griswold, Chief Administrative Law Judge, Office of Medicare Hearings and Appeals (OMHA) under United States Department of Health and Human Services, which handles the third level of appeal.
You can access more information about the witnesses and the hearing testimony here.
In its 2015 Regulatory Blueprint for Action, the National Association for Home Care & Hospice (NAHC) provides recommendations to eliminate delays in Medicare Appeals to ALJs. NAHC recommends that: 1) CMS take all necessary steps to improve the quality and accuracy of initial claim determinations to limit need for an administrative appeal; 2) CMS monitor its contractors that handle early-stage administrative appeals to ensure a high degree of accuracy and to reduce the number of appeals that end up before an ALJ; 3) CMS provide a settlement option to all appellants with claims pending before an ALJ in order to reduce the backlog. That settlement should be based on historical data on ALJ reversal rates and the cost savings achieved by Medicare coming through the avoidance of an ALJ appeal; 4) OMHA increase its resources to handle the level of demand and establish alternative dispute resolution processes to resolves some appeals.
Please stay tuned to NAHC Report for additional information on this issue. In a subsequent article, NAHC Report will analyze some of the recommendations put forward by the witnesses and senators during today’s hearing.