AHA asks judge to require HHS to resolve Medicare appeals backlog

The American Hospital Association filed a motion for summary judgment Friday in AHA v. Burwell asking a federal judge to order HHS to put three "practicable solutions" in place to reduce the Medicare appeals backlog at the administrative law judge level.

The AHA seeks a court order requiring HHS to implement the following solutions to the backlog: offer reasonable settlement to hospitals and other Medicare providers; delay repayment of some disputed Medicare claims and toll the accrual of interest on those claims; and impose penalties on recovery audit contractors for poor performance.

The suit centers on the Recovery Audit Contractor program. The RAC program's mission is to correct improper Medicare payments by identifying and collecting over- and underpayments. Healthcare providers have the option of appealing recovery auditors' findings, and HHS' Office of Medicare Hearings and Appeals administers hearings concerning denied Medicare claims. Claim denials that reach the third level (of five possible levels) of the appeals process are brought before administrative law judges, who issue decisions regarding coverage determinations.

Due to a backlog in RAC appeals, OMHA announced a temporary suspension of most new requests for ALJ hearings concerning payment denials in December 2013. In May 2014, the AHA, Baxter Regional Medical Center in Mountain Home, Ark.; Covenant Health in Knoxville, Tenn.; and Rutland (Vt.) Regional Medical Center filed suit concerning the backlog. They brought the matter to compel HHS to meet the statutory deadlines for ALJ review of Medicare claim denials.

The plaintiffs' legal claims were dismissed in 2014, but the U.S. Court of Appeals for the District of Columbia reversed the dismissal in February. The appeals court remanded the case to the lower court, and instructed the court to "consider the problem as it now stands — worse, not better."

According to the AHA, the judge indicated Oct. 3 he was prepared to compel HHS to meet the statutory deadline for processing Medicare claims appeals. However, the judge ordered additional briefing on what remedial steps HHS should take to reduce the claims backlog.

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