The Medicare appeals process includes a redetermination with the contractor that issued the initial determination, a reconsideration with a Qualified Independent Contractor, a hearing with an Administrative Law Judge, and review by the Medicare Appeals Council. While the first two levels of the appeals process can take several months, in recent years the time frame for resolution of ALJ appeals has increased tremendously. According to the Department of Health and Human Services (HHS), from 2009 to 2019 the average processing time for ALJ appeals increased from 94.9 days to 1,302.9 days. For parties who have submitted a request for an ALJ hearing, the Office of Medicare Hearings and Appeals advises that “due to exceptionally high volume a substantial delay should be expected before assignment of your appeal.” The long delays come despite the fact that an ALJ decision is generally required under 42 C.F.R. § 405.1016 to be issued within 90 days of the date the request for a hearing is received by the Office of Medicare Hearings and Appeals.
In response to the delays in the Medicare appeals process, the American Hospital Association filed suit against the Secretary of HHS in 2014. Recently, in American Hospital Association v. Azar, No. 14-851, 2018 U.S. Dist. LEXIS 186853, 2018 WL 5723141 (D.D.C. Nov. 1, 2018), the U.S. District Court for the District of Columbia issued a mandamus order requiring the Secretary of HHS to eliminate the backlog of Medicare appeals by the end of the 2022 fiscal year. HHS must reach a 19 percent reduction of the current backlog of appeals by the end of the 2019 fiscal year, a 49 percent reduction by the end of the 2020 fiscal year, a 75 percent reduction by the end of the 2021 fiscal year, and elimination of the backlog by the end of the 2022 fiscal year. The federal government’s fiscal year runs from October 1 to September 30.
HHS has blamed a substantial increase in the number of appeals and a lack of funding for the long delays. According to HHS, from the 2010 fiscal year to the 2014 fiscal year, there was a 1,222 percent increase in appeals but only a 16 percent increase in funding. After repeated requests from HHS for additional funds, Congress appropriated $182.3 million for HHS to clear the appeals backlog as part of the March 2018 omnibus spending bill. For the 2019 fiscal year, HHS has been implementing the following plan to clear the appeals backlog:
•More than doubling ALJ adjudicatory capacity from 92 to up to 198 ALJ teams
•Adding a Medicare Magistrate program, which provides an independent adjudication for the resolution of appeals having a lower amount in controversy, without a hearing, and at lower cost per claim than the current ALJ adjudication process
•Providing for a modest increase in senior attorneys to support the OMHA Attorney Adjudicator program and other administrative actions.
The U.S. District Court for the District of Columbia ordered HHS to file quarterly status reports beginning December 31, 2018, showing its progress on clearing the appeals backlog. On December 21, 2018, HHS filed its first status report showing that the Office of Medicare Hearings and Appeals has cleared 224,247 appeals for the 2018 fiscal year, leaving 417,198 appeals still pending. While that is still a tremendous number, the number of pending appeals has substantially decreased since the end of the 2015 fiscal year, when 886,418 appeals were pending. In the last quarter of the 2018 fiscal year, HHS received 17,132 appeals and was able to clear 83,335 appeals. Thus, HHS has been making significant progress.
Parties are able to receive an ALJ decision more quickly by waiving a hearing. In addition, federal regulations allow parties to escalate an appeal to the next level if a decision is not issued in the required time frame. This would allow parties to go through the appeals process and obtain judicial review more quickly. However, by waiving a hearing, parties are giving up an opportunity to be heard and thus could be less likely to receive a favorable decision. By escalating an appeal to the next level, parties are giving up the possibility of receiving a favorable decision at the ALJ or Appeals Council levels. Further, parties would incur significantly more costs if they follow the escalation process to proceed to federal court. As such, the elimination of the appeals backlog would provide tremendous relief.
If you have any questions about the appeals process, please do not hesitate to let us know. We will be happy to help.