Court orders HHS to eliminate Medicare appeals backlog

A federal judge has ordered HHS to clear its backlog of Medicare reimbursement appeals by the end of 2020.

On Monday, U.S. District Judge James 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 level (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 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 a lawsuit 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."

On Monday, Judge Boasberg ordered HHS to incrementally reduce the backlog 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.

The judge ordered HHS to file status reports with the court ever 90 days.

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