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Medicare Appeals Backlog Update: Key Things to Know

medicare appealBy: Matthew Fischer

Aside from the half million already pending before the Office of Medicare Hearings and Appeals (OMHA), OMHA indicates that it receives more appeals each year than its total annual adjudication capacity and has hit its maximum limits given their current resources.  With these numbers, the current estimated wait time is 3 years for an Administrative Law Judge (ALJ) to process an appeal.  Though recent developments in the litigation involving the U.S. Department of Health and Human Services (HHS) and American Hospital Association (AHA) offered little hope for a resolution, OMHA’s implementation of new settlement initiatives may present a better strategic option for appellants.

AHA Litigation

In 2016, the AHA filed suit against HHS requesting an order mandating the clearance of a backlog of appeals pending with OMHA.  The suit was filed because OMHA is required under the Code of Federal Regulations to issue a decision within 90days.  However, this benchmark is seldom achieved.  In its initial ruling, the Federal District Court for the District of Columbia sided with AHA and ordered HHS to clear the backlog by 2020.  HHS appealed the decision and upon appeal, the U.S. Court of Appeals overturned the order and returned the case to the District Court to decide whether it would be impossible for HHS to comply.  As of last month, AHA has asked the District Court to again reinstate the original order.

New Settlement Initiatives

To help alleviate the backlog, OMHA in conjunction with the Centers For Medicare & Medicaid Services (CMS) are offering appellants two new settlement initiatives to help combat the ever-growing backlog pending before OMHA and the Medicare Appeals Council (Council).  In an effort to eliminate this backlog, these agencies have offered the Low Volume Appeals Initiative (LVA) and the expanded Settlement Conference Facilitation Program (SCF).  Both options will give providers and suppliers an opportunity to resolve their appeals without having to bear the current waiting period.

Each program has its own eligibility criteria.  First, to be eligible for the LVA, the appellant must be a Medicare Part A and B provider, physician, or supplier with fewer than 500 appeals pending at OMHA and the Council, combined.  In addition, the appeals must be pending as of November 3, 2017, the total amount billed must be $9,000 or less, and the appeals must not be part of an extrapolation.  CMS has made this option ineligible for several appellants.  For example, state Medicaid agencies and individual beneficiaries or family members are not eligible.  The deadline to apply for this program was recently extended to June 2018, and payment will be partial at 62 percent of the net approved amount.  In contrast, separate and distinct from the LVA, the SCF is eligible for Part A and B provider, physician, or supplier with a total of 500 or more appeals pending at OMHA and the Council or with any number of appeals pending that each have more than $9,000 billed.  In addition, the SCF will also have certain appellants that are ineligible.  Examples include appeals that involve unlisted healthcare codes, appeals involving payment disputes (except down coding claims), and appeals in OMHA’s statistical sampling initiative.  The SCF is set to begin in April 2018.

These new Medicare appeal programs give appellants hope and options as opposed to enduring the 3 year wait period.  However, if a new order is entered in the AHA litigation, this may stifle engagement as appellants will be encouraged to hold out for better terms.  Thus, appellants should carefully weigh their options considering the financial implications of waiting and the nature of the Medicare claims.