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Court Denies HHS Wish to Nix Medicare Appeals Backlog Timeline

A federal court rejected an HHS request to rescind the Medicare appeals backlog reduction timeline because the department did not present new evidence.

By Jacqueline Belliveau

- A federal court recently denied a Department of Health and Human Services (HHS) request to reconsider the four-year timeline developed to eliminate the Medicare appeals backlog at the administrative law judge level.

Federal court denies HHS request to rescind Medicare appeals backlog reduction timeline

HHS projected the backlog to increase by more than 70,000 pending appeals by the end of 2016. But HHS Secretary Sylvia Mathews Burwell argued before the court that forcing HHS to resolve pending Medicare appeals in the backlog by a specific time would require the federal department to “pay pending claims without regard to their merit, which the Medicare statute does not permit.”

According to the court’s decision, Burwell also raised concerns that HHS could not comply with the Medicare appeals backlog reduction targets.

In December 2016, the same District Judge ordered HHS to eliminate the Medicare appeals backlog by Dec. 31, 2020. The judge also required the federal department to comply with the following schedule:

• 30 percent decrease in the current backlog of cases pending at the administrative law judge level by Dec. 31, 2017

• 60 percent decrease in the current backlog of cases pending at the administrative law judge level by Dec. 31, 2018

• 90 percent decrease in the current backlog of cases pending at the administrative law judge level by Dec. 31, 2019

• No backlog of pending cases at the administrative law judge level by Dec. 31, 2020

If HHS fails to meet reduction deadlines, then the federal department must grant default judgement in favor of the providers and stakeholders behind the pending appeals by Jan. 1, 2021.

Additionally, HHS must submit status updates to the court every 90 days to document its progress with reducing the backlog.

Burwell also contended in December 2016 that the Medicare appeals backlog elimination timeline would require HHS to make payments on claims regardless of claim merit, violating Medicare regulations.

Since the HHS Secretary’s most recent arguments did not raise any new concerns in the Medicare appeals backlog case and she had already brought forth the same concerns in previous hearings, the district court rejected her request for reconsideration.

“Such a motion ‘is discretionary and need not be granted unless the district court finds that there is an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice,’” wrote James E. Boasberg, the District Judge overseeing the Medicare appeals backlog case. “Moreover, ‘is not a vehicle to present a new legal theory that was available prior to judgment,’ or to reargue previously raised theories.”

“As the Secretary argues nothing she did not raise in previous filings and has not met the exacting Rule 59(e) standard, the Court orders that Defendant’s Motion is denied,” he added.

In response to the recent decision, the American Hospital Association (AHA), one of the plaintiffs in the Medicare appeals backlog case, approved of the judge’s denial and urged HHS to consider more actionable steps for reducing the backlog.

“This latest decision from the court sends another clear and unmistakable message to HHS that they should focus on implementing real reforms critical to resolving the backlog, including fundamental changes to the Recovery Audit Contractor program,” stated Melinda Hatton, AHA General Counsel.

The healthcare industry group sent HHS and the federal court three Medicare appeals backlog resolutions as well as the reduction timeline back in October 2016. The potential solutions included offering reasonable settlements to providers, delaying repayment and interest tolling of disputed Medicare claims, and imposing financial penalties on Recovery Audit Contractors with high overturn rates.

Alternatively, the AHA advised HHS to follow a reduction timeline if the federal court did not wish to order a federal department to perform specific actions to eliminate the Medicare appeals backlog.

While HHS reopened a settlement option through CMS in November 2016, federal department questioned the AHA’s Medicare appeals backlog solutions in court, citing them as inappropriate.

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