HHS, Hospitals Continue to Clash Over Medicare Appeals Backlog: 5 Things to Know

Last December, the HHS Office of Medicare Hearings and Appeals announced a temporary suspension of  most new requests for administrative law judge hearings for at least two years. The suspension has led healthcare providers to express concern and even take legal action. Here are five key things to know about ALJ appeals and the backlog.

1. OMHA administers appeal hearings concerning denied Medicare claims. ALJs hold hearings and issue decisions regarding Medicare coverage determinations that reach the third level (of five possible levels) of the appeals process.

2. HHS enacted the suspension in response to a backlog in appealed claims. Earlier this week, Nancy Griswold, chief ALJ from the OMHA, testified before the subcommittee on Energy Policy, Health Care & Entitlements of the House Oversight & Government Reform Committee that the timeframes for hearing and deciding Medicare appeals by ALJs has been steadily increasing since fiscal year 2010. Ms. Griswold attributed the growth partly to OMHA's expanded responsibilities and new Medicare audit workloads, such as the implementation of the Recovery Audit Contractor program in 2010. OMHA and HHS are working to find solutions and ways to handle the bigger workload, according to Ms. Griswold's testimony.

3 This past January, the American Hospital Association urged CMS to work with OMHA to fix the backlog and end the suspension as soon as possible to mitigate detrimental effects for hospitals. In a letter to CMS Administrator Marilyn Tavenner, AHA Executive Vice President Rick Pollack wrote delays of at least two years in granting a hearing for an appealed claim violate a Medicare statute that requires ALJs to issue a decision within 90 days of receiving the request for a hearing. "Hospitals have been put in an untenable position in which the nearly unfettered ability of RACs to churn out erroneous denials forces them to pursue appeals in order to receive payment for medically necessary care, while the inability of OMHA to manage the appeals process within the timeframes required by the Social Security Act holds that payment hostage," Mr. Pollack wrote.

4. The AHA and members of Congress have also stated the backlog and suspension illustrate a need to reform the RAC program. In February, 111 House members sent a letter to then-HHS Secretary Kathleen Sebelius asking her to take immediate action to reform the RAC program, saying the temporary suspension illustrates a need for change. Additionally, at a February OMHA hearing on the backlog, AHA Senior Associate Director of Policy Melissa Jackson also urged the agency to address the accuracy of RAC payment denials. Hospitals are successful at overturning Medicare Part A denials 72 percent of the time, indicating a high level of inappropriate denials, Ms. Jackson said.   

5. In May, the AHA, Baxter Regional Medical Center in Mountain Home, Ark., Knoxville, Tenn.-based Covenant Health and Rutland (Vt.) Regional Medical Center filed a lawsuit to compel HHS to meet the statutory deadlines for ALJ review of Medicare claims denials. As of Feb. 12, the lawsuit stated 480,000 appeals were awaiting assignment to an ALJ. Last week, the AHA and the three hospitals filed a motion for summary judgment, asking a federal court to grant an immediate favorable ruling in their lawsuit.

More Articles on Medicare Appeals:
3 Myths About Medicare Audits
Hospitals Sue HHS Over Medicare Appeals
OMHA Holds Forum on RAC Audit Appeals Backlog 


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