Delays In Medicare Appeals Adjudication Part 1: Scope of the Problem

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adrienneJessica Gustafson HeadshotBy Adrienne Dresevic, Esq. and Jessica L. Gustafson, Esq. of The Health Law Partners, P.C.

As providers and suppliers that have experienced Medicare claim denials over the preceding years are very much aware, there exists a significant backlog of pending appeals in the existing five-stage Medicare appeals process. In particular, regarding level 3 of the appeals process (ie, the Administrative Law Judge (ALJ) hearing stage), despite statutory, regulatory, and policy mandates to the contrary, the Office of Medicare Hearings and Appeals (OMHA) anticipates that a delay of approximately 2.5 years exists from the time a request for hearing is made until an ALJ hearing is held (and even longer for a decision to be issued).[1]

Overview of the Medicare Part A and Part B Appeals Process and Appeals Timeframes 

Section 1869 of the Social Security Act (42 U.S.C. § 1395ff), created the five-stage uniform Medicare appeals process applied to Medicare Part A and Part B appeals.[2] Generally, the five-stage Medicare Part A and Part B appeals process is as follows:

  • Level 1: Following receipt of an initial determination, a dissatisfied party may file a request for “redetermination.” A request for redetermination must be submitted in writing to the Medicare Administrative Contractor (MAC) that issued the initial determination within 120-days of receipt of notice of initial determination (a party will be presumed to have received the notice of initial determination five days after the date of the notice, unless there is evidence to the contrary). The MAC is required to conclude its redetermination review no later than the 60-day period beginning on the date the MAC receives the request for redetermination.[3]
  • Level 2: If a party is dissatisfied with a redetermination decision, it may file a request for “reconsideration.” A request for reconsideration must be submitted in writing to the qualified independent contractor (QIC) identified on the redetermination decision within 180 days from the date the party receives notice of a partially favorable or unfavorable redetermination decision (a party will be presumed to have received the redetermination decision five days after the date of the notice, unless there is evidence to the contrary). The QIC is required to conclude its reconsideration review no later than 60 days following the date it receives the reconsideration request. If the QIC fails to abide by this timeframe, a party may “escalate” its appeal to the ALJ stage of appeal, in essence bypassing the QIC reconsideration review.[4]
  • Level 3: If a party is dissatisfied with a reconsideration decision, it may file a request for ALJ hearing within 60 days of the date of a party’s receipt of reconsideration decision (a party will be presumed to have received the reconsideration decision five days after the date of the notice, unless there is evidence to the contrary). An amount in controversy (AIC) requirement applies.[5] With limited exceptions, the Social Security Act expressly requires that an ALJ “conduct and conclude a hearing on a decision of a qualified independent contractor… and render a decision on such hearing by not later than the end of the 90-day period beginning on the date a request for hearing has been timely filed.”[6] If the ALJ fails to abide by this timeframe, a party may “escalate” its appeal to the Departmental Appeals Board for Medicare Appeals Council review.[7]
  • Level 4: If a party is dissatisfied with an ALJ’s decision, it may file a request for Council review within 60 days of the date of a party’s receipt of the ALJ decision (a party will be presumed to have received the ALJ decision five days after the date of the notice, unless there is evidence to the contrary).  The Council is required to conduct and conclude a review of the decision on an ALJ hearing and make a decision (or remand the case to the ALJ) in 90 days. If the Council fails to issue its decision within this timeframe, a party may “escalate” its appeal to federal district court.[8]
  • Level 5: If a party is dissatisfied with the Council decision, it may file a request for federal district court review. An AIC requirement applies.[9]

Scope of ALJ backlog of appeals 

In January 2012, OMHA received an average of 1,250 appeals per week; in November 2013, OMHA received over 15,000 appeals per week (over a 10-fold increase). Accordingly, in less than two years, OMHA’s pending appeals grew from under 92,000 to 460,000. Currently, the OMHA website projects a 20-24 week delay (ie, a 140-168 day delay) even in docketing new requests for ALJ hearing.[10] Therefore, OMHA’s adjudication timeframe in most cases will have elapsed prior to an appeal even being docketed. The average processing time for appeals decided in fiscal year 2015 was 547.1 days.[11] This backlog can cause significant financial repercussions for practices awaiting hearing, as CMS is permitted to begin withholding Medicare funds against an alleged overpayment beginning subsequent to the second level (ie, reconsideration stage) of appeal.[12]

Conclusion

The delay in ALJ appeals adjudication is untenable. This issue has captured the attention of CMS, OMHA, and Congress, and thus, resolution may be close at hand. Next month, in Part 2 of this article, we will provide an overview of initiatives proposed by CMS, OMHA, and Congress in an effort to address this significant backlog.


Footnotes:

[1] See Memorandum to OMHA Medicare Appellants issued December 24, 2013, available at http://www.hhs.gov/omha/letter_to_medicare_appellants_from_the_calj.pdf 

[2] Regulations implementing this portion of the Social Security Act are codified at 42 C.F.R. Part 405 Subpart I, and the CMS sub-regulatory guidance related to Medicare Part A and Part B appeals is set forth in the Medicare Claims Processing Manual (CMS Internet-Only Manual 100-04), Chapter 29.

[3] Section 1869 (a) (3) (C) (ii) of the Social Security Act (42 U.S.C. § 1395ff (a) (3) (C) (ii).  See also 42 C.F.R. § 405.940 et seq. and MCPM (CMS Pub. 100-04), Ch. 29, § 310.

[4] Section 1869 (c) (3) (C) (ii) of the Social Security Act (42 U.S.C. § 1395ff (c) (3) (C) (ii)). See also 42 C.F.R. § 405.960 et seq. and MCPM (CMS Pub. 100-04), Ch. 29, § 320.

[5] Section 1869 (b) (1) (E) of the Social Security Act (42 U.S.C. § 1395ff (b) (1) (E)). See also 42 C.F.R. § 405.1000 et seq. and MCPM (CMS Pub. 100-04), Ch. 29, § 330.  For calendar year  2016, the amount in controversy must be at least $150.  https://www.cms.gov/medicare/appeals-and-grievances/orgmedffsappeals/hearingsalj.html.

[6] See Section 1869 (d) (1) (A) of the Social Security Act (42 U.S.C. § 1395ff (d) (1) (A)) (emphasis added).  See also 42 C.F.R. § 405.1016 and MCPM (CMS Pub. 100-04), Ch. 29, § 330.1.  

[7] See Section 1869 (d) (3) (A) of the Social Security Act (42 U.S.C. § 1395ff (d) (3) (A)). See also 42 C.F.R. § 405.1100 et seq. and MCPM (CMS Pub. 100-04), Ch. 29, § 340.

[8] See Section 1869 (d) (3) (B) of the Social Security Act (42 U.S.C. § 1395ff (d) (3) (B)) and 42 C.F.R. § 405.1100 et seq.

[9] See Section 1869 (b) (1) of the Social Security Act (42 U.S.C. § 1395ff (b) (1) (E)).  See also 42 C.F.R. §§ 405.1006 (c) and  405.1100 et seq., as well as MCPM (CMS Pub. 100-04), Ch. 29, § 340.  For calendar year 2016, the amount in controversy threshold is $1,500.

For calendar year 2014, the amount in controversy threshold is $1,430.  See 78 Fed. Reg. 59702 (September 27, 2013) and http://www.cms.gov/Medicare/Appeals-and-Grievances/OrgMedFFSAppeals/Review-Federal-District-Court.html.

[10] See http://www.hhs.gov/omha/important_notice_regarding_adjudication_timeframes.html.

[11] Id.

[12] https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM6183.pdf.


Adrienne Dresevic, Esq. is a Founding Shareholder of The Health Law Partners, P.C., a nationally recognized healthcare law firm with offices in Michigan and New York.Practicing in all areas of healthcare law, she devotes a substantial portion of her practiceto providing clients with counsel and analysis regarding compliance, Stark Law, Anti-Kickback Statute, and compliance related issues. Ms. Dresevic serves on the American Bar Association Health Law Section’s Council, which serves as the voice of the national health law bar within the ABA. Ms. Dresevic also serves as the ABA Health Law Section’s Co-Chair of the Physicians Legal Issues Conference Committee, Vice Chair of the Programs Committee (Executive Leadership), and Vice Chair of the Sponsorship Committee. She is licensed to practice law in Michigan and New York, and can be contacted at adresevic@thehlp.com.

Jessica L. Gustafson, Esq. graduated from Wayne State University Law School. Practicing healthcare law, she concentrates on representing providers in the Medicare, Medicaid and third party payor audit appeals processes, compliance with federal and state healthcare regulations, and reimbursement matters.

The authors are members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at www.thehlp.com.


For more regulatory news, visit www.ahraonline.org/news.

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