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Court Orders AHA to Provide Strategies for Eliminating Medicare Appeals Backlog

On March 22, 2018, the latest development in American Hospital Association (AHA) v. Azar (formerly referred to as AHA v Burwell) emerged as Judge Boasberg issued an order to have the AHA develop strategies to assist the Department of Health and Human Services (HHS) in reducing the Medicare appeals backlog. The request comes in response to a lack of effective action by HHS to reduce the number of backlogged appeals.

Major events in the case include:

  • May 22, 2014: Initial complaint filed by the AHA, alleging that HHS was violating Federal law by failing to process appeals within the legally-mandated timeframes. The problem was and continues to be highlighted at the administrative law judge (ALJ) level of appeals, where wait times for the processing of claims regularly takes years;
  • December 18, 2014: Case is dismissed in favor of HHS, with court stating that it could not provide a remedy;
  • February 9, 2016: Circuit Court reverses the 2014 decision and orders district court to render opinion;
  • September 19, 2016: District court issues decision denying HHS’ request for stay;
  • December 5, 2016: Summary judgement issued in favor of the AHA, ordering HHS to eliminate appeals backlog by 2021, with incremental progress reports being required to show that mandatory progress had been made;
  • March and June 2017: HHS issues progress reports, with June report estimating that 950,520 claims would be pending at the ALJ level by 2021
  • August 11, 2017: Circuit Court orders district court to reconsider mandate, finding that an order to eliminate backlog could potentially force HHS to violate its duty to protect Medicare trust funds. HHS’ argument is that eliminating the backlog by 2021 would be impossible without arbitrarily deciding appeals.

March 22 saw the most recent development, as the District Court turned to HHS’ adversary in an attempt to develop a strategy to shrink the Medicare appeals backlog. Since the decision in favor of the AHA, HHS has maintained that it does not have the financial resources to process the amount of claims required by the court order; a June 2017 estimate found that 607,402 were awaiting adjudication at the ALJ level. HHS’ inability to reduce the backlog has left the AHA frustrated and Judge Boasberg in a position to look for collaboration between the parties.

Judge Boasberg’s order gives the AHA until June 22, 2018 to “submit specific proposals (and reasons therefor) that they wish the Court to impose via mandamus and explain why current procedures are insufficient.” HHS has until July 6 to respond, with the AHA having to reply by July 13.

The AHA has issued plans for reducing the backlog in the past, including proposing settlement programs and a system that would penalize recovery audit contractors (RACs) whose determinations had high overturn rates at the ALJ level.  It is unclear whether the AHA will reissue these same plans or unveil new ones, but it will be important to see whether the court accepts the proposals, and if the court will take steps to enforce the orders on HHS.

Wachler & Associates will continue to monitor the AHA v Azar case and other developments in connection with the Medicare appeal backlog.  If you or your entity have any questions pertaining to Medicare audit compliance and appeals, please contact an experienced healthcare attorney at (248) 544-0888, or via email at wapc@wachler.com. You may also subscribe to our health law blog by adding your email at the top right of this page.