Could the end be in sight for providers and suppliers experiencing delays in Medicare reimbursement due to the backlog in Medicare appeals?

On Dec. 5, the United States District Court for the District of Columbia granted plaintiffs’ motion for summary judgment in the case of American Hospital Association et al. v. Burwell. The Court’s decision mandates that the U.S. Department of Health and Human Services (HHS) clear the Medicare appeals backlog in full by Dec. 31, 2020.

The Medicare appeals process includes statutory deadlines for all five levels of appeal. With regard to the administrative law judge (ALJ) level of review, federal law requires that an ALJ conduct and conclude a hearing and render a decision within 90 days of a request for a hearing. As of July 25, 2016, HHS statistics indicated that the average timeframe for the Office of Medicare Hearings and Appeals (OMHA) to process an ALJ appeal was 935 days. Further, the Court noted that even assuming the Secretary’s administrative initiatives meet current projections, the backlog will still grow through the 2020 fiscal year.

In this case, plaintiffs filed suit in 2014 to compel the Secretary of HHS to adjudicate Medicare appeals within the statutorily imposed deadlines. After the Court dismissed the case for lack of jurisdiction and in deference to the political process, the United States Court of Appeals for the District of Columbia Circuit held that Court had jurisdiction to grant mandamus relief and remanded the case for a determination on the merits.

On remand, the Secretary moved to stay the proceedings until Sept. 30, 2017 in order to permit HHS to pursue ongoing administrative and legislative efforts to reduce the backlog. On Sept. 19, 2016, the Court denied the Secretary’s motion, finding that the Secretary’s’ proposals would not result in a meaningful reduction in the backlog and that equitable grounds existed for mandamus to compel the Secretary to meet the statutory deadlines.

In recognition that the Court could not practicably order HHS to resolve all claims by the deadline, the Court instead requested the parties to submit briefs addressing some form of relief. The Court’s decision adopts one of two approaches proposed by plaintiffs. The Court will require the Secretary to meet calendar-year deadlines for mandatory-percentage reductions in the backlog of cases pending at the ALJ level.

The Court’s order requires a 30-percent reduction in pending ALJ cases by Dec. 31, 2017; a 60-percent reduction by Dec. 31, 2018; a 90-percent reduction by Dec. 31, 2019; and a 100-percent reduction by Dec. 31, 2020. The Court’s decision leaves the means by which the Secretary reduces the backlog to the Secretary’s discretion; however, if the Secretary fails to meet the deadlines, plaintiffs are entitled to move for default judgement or to otherwise enforce the writ of mandamus pursuant to the Court’s continuing jurisdiction.

As a result of this case, HHS must expeditiously pursue administrative and legislative efforts to reduce the backlog in Medicare appeals. Medicare providers and suppliers should expect increased efforts by OMHA to expand existing initiatives and develop new strategies to settle or otherwise resolve large volumes of claims.

Providers and suppliers must evaluate these opportunities in light of their individual circumstances and the Court’s mandate to resolve all appeals by 2021.

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