Court Orders HHS to Clear Medicare Appeals Backlog By 2022

On November 1, 2018, a U.S. District Court ordered the United States Department of Health and Human Services (“HHS”) to eliminate the Medicare appeals backlog by the end of fiscal year 2022.  There are currently 426,594 backlogged appeals. The recent ruling imposes a timetable for reducing the backlog of appeals. Specifically, 19% of the appeals must be cleared by the end of fiscal year 2019; 49% of the appeals must be cleared by the end of fiscal year 2020; 75% by the end of fiscal year 2021; and the backlog must be eliminated entirely by 2022. To demonstrate its progress, HHS must file quarterly status reports beginning on December 31, 2018.

The Court’s order arises from a lawsuit that was filed by the AHA in 2014. AHA alleged that HHS was violating federal law by failing to process appeals within 90 days from the date of the Office of Medicare Hearings and Appeals’ receipt of the request for hearing.  In 2016, the District Court entered summary judgment in favor of the AHA and ordered HHS to comply with a timetable to eliminate the backlog of appeals by 2020.  In 2017, the D.C. Circuit reversed the District Court and ordered the District Court to evaluate HHS’ claim that compliance with the timetable would be impossible.

HHS has implemented some backlog-reduction efforts to try complying with the previous ruling to eliminate the backlog by fiscal year 2020. Settlement Conference Facilitations (“SCF”) are an example of one of these initiatives. Medicare Part A and Part B providers and suppliers who have appeals pending before an ALJ are encouraged to participate in SCF. SCF uses a facilitator to help the appellant and CMS find a mutually agreeable resolution. Initiatives like SCF are a step forward in reducing the backlog, as it takes people out of the long waiting period and resolves cases in a simpler matter.

Though these efforts at reducing the backlog have been helpful, HHS must still abide by the timetable. HHS failed to show that lawful compliance with the timetable order would be impossible. In March 2018, Congress appropriated $182.3 million for the purpose of addressing the backlog.  As a result of the additional funding, HHS projected that it could eliminate the backlog by 2022.  If Congress reduces HHS’ funding such that HHS is unable to comply with the timetable for reducing appeals, HHS can request a modification of the order.

According to the Office of Medicare Hearings and Appeals, the average processing time for a case pending at the Administrative Law Judge level of appeal in 2018 is over three years. Implementing the new timetable will significantly change the current Medicare audit timeline and the way that Medicare appeals are handled by providers and attorneys.

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 has 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.