HHS: Court order on Medicare appeals backlog would require improperly paying claims

HHS has asked U.S. District Judge James Boasberg to reconsider an order instructing HHS to clear its backlog of Medicare reimbursement appeals by the end of 2020.

On Dec. 5, Judge Boasberg granted a motion for summary judgment filed in October by the American Hospital Association in AHA v. Burwell — a suit that 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 of five possible levels of the appeals process are brought before administrative law judges, who issue decisions regarding coverage determination.

Due to a backlog in RAC appeals, OMHA temporarily suspended most new requests for administrative law judge 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 a lawsuit concerning the backlog. They brought the matter to compel HHS to meet the statutory deadlines for administrative law judge 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."

On Dec. 5, Judge Boasberg ordered HHS to incrementally reduce the backlog of 657,955 appeals pending before OMHA over the next four years. He ordered the agency to cut the backlog by 30 percent by the end of 2017; 60 percent by the end of 2018; 90 percent by the end of 2019; and to completely eliminate the backlog by Dec. 31, 2020.

HHS filed a motion Dec. 15 asking the judge to reconsider his decision. HHS said it would be impossible to reduce the appeals backlog on the schedule provided by the court without improperly paying claims, regardless of merit.

"Absent substantial new resources and authorities from Congress, the Department has no means to, and therefore cannot, meet the reduction targets required by the court's Dec. 5, 2016 order and simultaneously satisfy its fiduciary duty to the Medicare Trust Funds to pay only for claims that satisfy coverage requirements as set forth by statute," said Ellen Murray, assistant secretary for financial resources and CFO of HHS, in a declaration filed with the agency's motion.

HHS is seeking an order granting its motion for reconsideration and denying the AHA's motion for summary judgment.

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