HHS’ 2nd Update on Appeals Backlog Shows Little Progress

In early June 2017 the Department of Health and Human Services (HHS) issued its second status report on the Medicare appeals backlog. The December 2016 case American Hospital Association v Burwell, in addition to dictating that HHS clear the backlog by 2020, required that HHS release a quarterly status report every 90 days to detail the progress being made toward eliminating the backlog.

The Burwell case was a significant victory for healthcare providers in their attempts to get the Medicare backlog reduced and have administrative law judge (ALJ) appeals processed within the statutory timeframes. In addition to status reports every 90 days and the complete elimination of the backlog by 2020, HHS is also required to observe several intermediary benchmarks: 30% reduction by the end of 2017, 60% by the end of 2018, 90% by the end of 2019, and then ultimately 100% elimination by the end of 2020.

However, despite these court mandated benchmarks, it has become clear to all parties involved that these goals are unlikely to be met without significant developments; HHS itself has maintained since the requirements were instituted that the elimination of the backlog would not be possible. This prediction is supported by the facts: HHS released its first status report in March, with the somber prediction that a backlog of 1,009,768 appeals would be pending by the end of 2021. June’s report saw a slightly improved projection of 950,520 claims remaining by that time, but this projection is still very far from meeting the court order.

HHS has noted funding as one of the obstructions in the way of eliminating the backlog, predicting that if its 2018 funding request is granted, the backlog will be reduced to 353,603 claims by the end of 2021. Not only is this still materially in violation of Burwell’s requirements, but it would also require funding to be doubled—from about $107 million in 2017, to $242 million in 2018.

The fact that even a significant funding increase would fail to remedy the backlog is troubling, though not unexpected. The main weakness of the Burwell decision, in the eyes of providers, was that it allowed HHS autonomy in reducing the backlog (though with court oversight and reporting requirements). Providers were skeptical that HHS would alter its practices enough to substantially reduce the backlog, and these two HHS status reports have only confirmed these concerns; while HHS has apparently slowed the backlog’s increase since March, HHS has not stopped it.

The court in Burwell, however, did build a contingency into the decision—the court stated: “if [HHS] fails to meet [these] deadlines, Plaintiffs may move for default judgment or to otherwise enforce the writ of mandamus.”  This grants the court continuing authority to enforce its decision, but it seemingly has not motivated HHS to try any innovative procedures to reduce the backlog. Providers have been requesting programs such as extensive settlement agreements, but so far no such actions have been attempted, and the backlog remains.

As is common at the ALJ level, providers will have to wait and see what the result of these unsuccessful status reports will be. If HHS does not meet the deadline for 2017, the court may take extreme action against HHS, or it may simply excuse their noncompliance. Providers should keep their attention on the still-increasing Medicare backlog to see what effect it has on the mechanics of the Medicare appeals process, and Medicare as a whole.

For over 30 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, including Medicare audit compliance and appeals. If you or your healthcare entity have any questions about the AHA v. Burwell decision and its potential effect on Medicare appeals, or any other health care regulatory compliance questions, 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.