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Court Orders HHS to Eliminate Medicare Appeals Backlog by 2022

In light of new funding from Congress, HHS must reduce the Medicare appeals backlog according to annual deadlines and percentage amounts, a judge ordered.

Medicare Appeals Backlog

Source: Thinkstock

By Jacqueline LaPointe

- HHS must eliminate the Medicare appeals backlog at the Administrative Law Judge (ALJ) level by the end of the 2022 fiscal year, according to a recent court order.

Judge James E. Boasberg of the US District Court for the District of Columbia recently reinstated a deadline-based order that requires HHS to reduce the backlog of appealed Medicare claims annually by a specific percentage amount.

With the projected FY 2018 backlog of 426,594 appeals as a baseline, HHS must reduce the backlog by 19 percent by the end of FY 2019, 49 percent by the end of FY 2020, and 75 percent by the end of FY 2021.

By the end of FY 2022, the court expects HHS to fully eliminate the growing Medicare appeals backlog.

The most recent deadline-based order is the second HHS has faced. Judge Boasberg previously ordered HHS to clear the backlog at the AJL level by the end of the 2020 fiscal year, with deadlines each year leading up to full elimination.

Under the deadline-based order, HHS would have had to grant default judgment in favor of providers and other stakeholders issuing the claim denial appeal if the federal department failed to meet the FY 2020 deadline.

HHS, however, argued that the order violated Medicare regulations by forcing the federal department to “make payment on Medicare claims regardless of the merit of those claims.”

After an appeals court reversed the deadline-based order and several arguments from HHS and plaintiffs American Hospital Association (AHA) et al., Judge Boasberg revived the elimination timeline. The judge expects the deadline-based order to stick this time around because of new HHS funding.

On March 23, 2018, Congress appropriated $182.3 million to HHS for the purpose of funding efforts to reduce the Medicare appeals backlog, which former HHS Secretary Tom Price projected to increase to 950,520 cases by the end of FY 2021.

The 70 percent boost in funding from Congress will allow the federal department to increase ALJ staffing levels and more than double the appeal court’s disposition capacity.

With the additional funding, HHS itself projected to clear the Medicare appeals backlog by 2022.

“As this time around the Government agrees that recent funding has made compliance possible within four years, the Court will impose such a deadline,” Judge Boasberg wrote in his most recent opinion.

The AHA commended Judge Boasberg for reinstating a deadline-based order. The association has been part of the ongoing lawsuit against HHS for the federal department’s noncompliance with the statutory requirement that decisions on appeals at the ALJ level be made within 90 days.

“The AHA is extremely pleased that Judge Boasberg recognized the need to reimpose a time-based mandamus remedy for reducing the Medicare appeals backlog, which is what the AHA and plaintiff hospitals had originally requested,” AHA General Counsel Melinda Hatton stated on the association’s website. “The court’s mandamus order will serve to keep HHS accountable in reducing the backlog.”

The court will hold HHS accountable for eliminating the Medicare appeals backlog by requiring quarterly status reports from the federal department starting on Dec. 31, 2018.

HHS agreed to follow the elimination timeline, but with one caveat. If Congress does not continue to appropriate the same level of funding in the near future, then HHS may find it impossible to follow the deadline-based order.

The court agreed that HHS can request a modification to the order should a change in funding occur.

Additionally, Judge Boasberg made a decision on the AHA’s request to reduce the interest charges on appealed claims. The plaintiffs asked for a reduction of the interest charged on funds that HHS had yet to recoup from providers while appeals are pending.

The court, however, decided that the interest charge reduction would “ameliorate the adverse effects providers suffer when their appeals languish in the backlog, but they would not necessarily improve delays.” Therefore, the request was beyond the scope of the lawsuit.

The court is also likely to deny other AHA requests. “Where the agency is held to a set of deadlines, it is unnecessary — and unwise — to further specify the steps it must take,” Judge Boasberg argued.

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