Senate Finance Committee Chairman and Ranking Member Introduce Bill to Reduce Medicare Appeals Backlog
December 17, 2015 09:55 AM
On Wednesday, December 9, United States Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) introduced the Audit & Appeals Fairness, Integrity, and Reforms in Medicare (AFIRM) Act of 2015 (S. 2368), legislation designed to improve the Medicare audit and appeals process, and reduce the backlog of hearings and appeals.
The backlog of appeals is having an adverse effect on beneficiaries and providers. Under Medicare law a decision must be issued by a Medicare Administrative Law Judge (ALJ) within 90 days following the filing of an appeal by the Medicare beneficiary or provider. However, the appeal system is backlogged with nearly 900,000 appeals pending review before a handful of ALJs. With stepped up claims reviews in all provider sectors in Medicare, the number of appeals has increased exponentially. Despite efforts by the Office of Medicare Hearings and Appeals (OMHA) to expand the number of ALJs and achieve greater efficiencies in processing appeals, with 14,000 new appeals filed every week, a decision on any current ALJ appeal is over a year away.
“At a time where it takes up to a year and a half to process Medicare appeals, this bill addresses the massive backlog of Medicare appeals and offers more protection to beneficiaries and more certainty for healthcare providers,” Chairman Hatch said. “This a common-sense fix that will improve our healthcare system for both patients and providers, and I look forward to working with my colleagues on both sides of the aisle in getting this bill passed in the Senate.”
“I’m proud the Finance Committee has come together to make smart, common-sense changes to the audit and appeals system in Medicare so there is less red tape and the tremendous backlog of claims can be processed,” Ranking Member Wyden said.“The challenges facing the audits and appeals process today hurt providers, beneficiaries, and states, and it’s time to take action on these bipartisan reforms. I hope the Senate can swiftly take up and pass this bill.”
Following are provisions in the bill as described in the report language that were designed to improve the appeals process and reduce the backlog:
Increased resources for the Medicare appeals process.
Establishment of Medicare magistrate reviews - The bill would establish within OMHA decision-making officials known as Medicare magistrates to review and render decisions on certain appeals.
Creation of a settlement process for appellants - Beginning in calendar year 2017, the bill would require the Secretary to establish alternative dispute resolution processes, including mediation, in which providers, suppliers, beneficiaries, or State Medicaid Agencies could voluntarily resolve large volumes of pending appeals involving similar issues of law or fact.
Authority to use sampling and extrapolation methodologies and to consolidate appeals for administrative efficiency - Provides review entities with the authority to use sampling and extrapolation methodologies, and to consolidate appeals for administrative efficiency.
Remanding appeals to the redetermination level with the introduction of new evidence - Requires a Qualified Independent Contractor, a Medicare magistrate, an ALJ, or the Departmental Appeals Board to remand an appeal to the Medicare Administrative Contractors (MACs) for a redetermination when the appellant introduces new evidence into the administrative record at a subsequent level of appeal.
Expedited access to appeals - The bill requires the Secretary of Health and Human Services to establish and implement a process whereby ALJs and Medicare magistrates could issue decisions, based on the evidence of record, without holding a hearing when there are no material issues of fact in dispute and the ALJ or the Medicare magistrate determines that there is a binding authority that controls the decision in the matter under review.
In addition to strengthening the appeals process, the legislation also includes reforms to address the high number of audits, including reforms to how MACs are incentivized, and creating a Medicare Supplier and Provider Ombudsman for Reviews and Appeals.
Prior to introduction of the bill, the National Association for Home Care & Hospice (NAHC) met with the Senate Finance Committee and provided several recommendations that were included in the legislation to improve the Medicare appeals process and to reduce the backlog. Included in the legislation were NAHC’s recommendations to increase resources for the Medicare appeals process, improve the accuracy and quality of determinations, and establish a settlement process for appellants.The language is largely permissive, providing the potential for positive reforms rather than any direct assurance that the backlog will be significantly reduced. While NAHC continues to review the full legislation, the inclusion of its recommendations is a positive step.
It is estimated that over 30,000 appeals involving hospice or home health services are pending in the backlog. It is believed that the majority involve claim denials based on the now-eliminated narrative requirement in the home health face-to-face physician encounter rules. The settlement authority in the Senate legislation provides the means by which these claims can be resolved without waiting the years that it will take to clear out the appeals backlog. However, if the legislation is enacted, it leaves it to CMS’ discretion whether it would consider a settlement approach to these appeals. As such, NAHC continues to pursue alternative legislative and judicial solutions that more directly address the home health and hospice backlogs.
Stay tuned to NAHC Report regarding the status and additional information about this legislation.