Plaintiffs are the American Hospital Association and three other regional hospitals and healthcare systems.
Providers with Medicare appeals pending may have their claims resolved sooner than expected. On Nov. 1, 2018, U.S. District Court Judge Boasberg ruled that the U.S. Dept. of Health and Human Services (HHS) must eliminate the Medicare appeals backlog by the end of fiscal year 2022.
Currently, there is a backlog of 426,594 appeals. Judge Boasberg’s ruling imposes a timetable for reducing the backlog of appeals. Specifically, HHS must clear 19 percent of the appeals by the end of fiscal year 2019; 49 percent of the appeals by the end of fiscal year 2020; 75 percent by the end of fiscal year 2021; and eliminate the backlog entirely by the end of 2022. Beginning on Dec. 31, 2018, HHS must file quarterly status reports on its progress.
This long-awaited ruling comes years after the American Hospital Association (AHA) filed the lawsuit alleging that HHS was violating federal law by failing to process appeals according to statutorily-mandated timeframes. Federal regulations require appeals at the Administrative Law Judge (ALJ) hearing level to be completed within 90 days following the date the request for hearing is received by the Office of Medicare Hearings and Appeals (OMHA). The current average processing time, however, for a case pending at the ALJ level is more than three years.
The Complaint, which was filed by the AHA in 2014, was initially dismissed by the District Court for lack of jurisdiction. In February 2016, the D.C. Circuit Court reversed the District Court’s dismissal and ordered the District Court to issue a decision on the merits. In December 2016, the District Court entered summary judgment in favor of the AHA and ordered HHS to comply with a timetable to eliminate the backlog of appeals by 2020. In August 2017, the D.C. Circuit again reversed the District Court and ordered the District Court to evaluate HHS’ claim that compliance with the timetable would be impossible.
In his recent decision, Judge Boasberg found that he could “easily conclude that it would be possible” for HHS to reduce and then eliminate the backlog as a result of increased funding from Congress to HHS. In March 2018, Congress appropriated $182.3 million for the purpose of addressing the backlog and, by HHS’ own projections, the increased adjudication capacity as a result of the additional funding would allow HHS to “eliminate the backlog entirely in FY 2022.” According to Judge Boasberg’s decision, HHS can request a modification of the order if Congress reduces HHS’ funding such that it would be impossible to comply with the timetable for reducing appeals.
Aside from the issue of whether it was possible for HHS to comply with the court-ordered timetable, Judge Boasberg found that the equities weighed in favor of the AHA as the lengthy Medicare appeals process impacts “hospitals’ willingness and ability” to provide care to patients.
Judge Boasberg denied the AHA’s requests to reduce the interest charged on appeals, allow providers to rebill their claims for six months following issuance of the Court’s order, and require that HHS maintain its current settlement programs. Judge Boasberg concluded that “[w]here the agency is held to a set of deadlines, it is unnecessary – and unwise – to further specify the steps it must take.”
If Judge Boasberg’s decision stands, it will significantly change the current Medicare audit timeline and the way that Medicare appeals are handled by providers and attorneys.
Listen to healthcare attorney Andrew Wachler report this story live on Monitor Monday, Nov. 12, 10-10:30 a.m.
 42 C.F.R. 405.1016(a).
 Average Processing Time By Fiscal Year, https://www.hhs.gov/about/agencies/omha/about/current-workload/index.html
 AHA v. Azar, 2018 U.S. Dist. Lexis 186853, *8 (D.D.C. 2018) (emphasis in original).
 Id. at *7 (emphasis in original).
 Id. at *11.
 Id. at *13.