In a recent court filing, the Department of Health and Human Services (HHS) reported that it has cleared approximately 79% of the Medicare appeals backlog. HHS is currently under court order to clear a backlog of hundreds of thousands of Medicare claims appeals pending before the Office of Medicare Hearings and Appeals (OMHA).
Generally, a Medicare claim denial or overpayment demand may be appealed through five successive levels of appeals. First, Redetermination by a Medicare Administrative Contractor (MAC), often the same MAC that denied the claims initially. Second, Reconsideration by a Qualified Independent Contractor (QIC). Third, appeal to an Administrative Law Judge (ALJ) employed by the Office of Medicare Hearings and Appeals (OMHA), a subdivision of HHS, where the provider may be entitled to a hearing. Fourth, review by the Medicare Appeals Counsel, also within HHS. Fifth and finally, appeal to a federal district court.
The entire appeals process can take years and create difficulties for healthcare providers or suppliers. The least efficient part of the process has long been the wait, sometimes for three to five years, for an available ALJ to hear the appeal, at which point in the appeals process the only review of a contractor’s decisions has been by other contractors. This left providers in the difficult position of having significant overpayment demands based on incorrect decisions by contractors but having to wait years for independent review of their cases. This long wait also violated the regulations that govern the appeals process, which generally entitle a provider to an ALJ hearing within 90 days of the provider’s request for a hearing. At the height of the backlog, over 400,000 cases were pending at OMHA.
As a result of a lawsuit filed by the American Hospital Association and others, a federal court in 2018 ordered HHS to reduce this backlog over four years and periodically report its progress toward hitting goals set by the court. Over the past few years, HHS has hired dozens of new ALJs, opened several new offices to handle appeals, and created the Settlement Conference Facilitation program to resolve appeals without the need for a hearing. In its most recent progress report, HHS reported that, as of the end of the third quarter of 2021, it has reduced the backlog by 79% to approximately 86,000 cases. As a practical matter, the wait times for ALJ hearings have slowly decreased but remain highly unpredictable. Providers with cases that may be appealed to the ALJ may have several strategic decisions to make regarding the strength of their case, the timing of the appeal, and the possibility of settlement.
For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding and appealing audits and claim denials. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.