By Adrienne Dresevic, Esq. and Jessica L. Gustafson, Esq. of The Health Law Partners, P.C.
Section 1869 of the Social Security Act establishes the five-stage uniform Medicare appeals process applied to Medicare Part A and Part B reimbursement appeals. The Department of Health and Human Services (HHS) Office of Medicare Hearings and Appeals (OMHA) oversees the third stage of this process, the Administrative Law Judge (ALJ) hearing stage. The Social Security Act requires that an ALJ “conduct and conclude a hearing… and render a decision on such hearing by no later than the end of the 90-day period beginning on the date a request for hearing has been filed.”
However, over the past few years, OMHA has failed to meet this statutory requirement. During this time, OMHA experienced an exponential increase in the number of appeals received; between FY 2009 and FY 2014, that increase was 1,222%. The average processing time for appealed claims as of October 14, 2016 was 935.4 days (over 10 times the statutory requirement).
In 2014, the American Hospital Association (AHA), together with three plaintiff hospitals, filed a complaint against the Secretary of HHS, which sought mandamus relief to compel HHS to decide pending Medicare reimbursement appeals within the statutory timeframes. After a years-long battle, on December 5, 2016, the US District Court for the District of Columbia issued a Memorandum Opinion granting mandamus relief to the appellants.
In issuing its Memorandum Opinion, the district court ordered the following:
- 30% reduction from the current backlog of cases pending at the ALJ level by December 31, 2017;
- 60% reduction from the current backlog of cases pending at the ALJ level by December 31, 2018;
- 90% reduction from the current backlog of cases pending at the ALJ level by December 31, 2019; and
- Elimination of the backlog of cases pending at the ALJ level by December 31, 2020.
The district court declined to adopt a proposal by the appellants that should HHS fail to eliminate the backlog, default judgment in favor of all appeals pending at the ALJ level without a hearing for more than one calendar year should issue on January 1, 2021. Rather, the district court noted that should HHS fail to meet the above deadlines, the plaintiffs could move for default judgment or to otherwise enforce the writ of mandamus. The Memorandum Opinion does not prescribe the particulars of HHS’ backlog-reduction initiatives, but rather leaves such details to the discretion of HHS.
Although the district court decision provided mandamus relief to the appellants, Medicare appellants should not assume they will receive complete relief in the near future. First, as noted above, the relief ordered will be phased in over the next 4 years. Further (and perhaps more importantly), HHS has appealed the district court decision, arguing that (1) it has already taken all steps within its power to reduce the backlog, and (2) it is not possible to obtain the ordered backlog reductions without paying pending claims without regard to their merit, which would violate HHS’s obligation to protect the Medicare Trust Funds.
Radiology providers and suppliers who are appellants awaiting resolution of appeals at the ALJ level should keep watch for new developments not only related to this case, but also to initiatives OMHA and/or CMS may choose to adopt.
 See HHS, FY 2017 OMHA Justification of Estimates for Appropriations Committee, available at https://www.hhs.gov/sites/default/files/fy2017-budget-justification-office-of-medicare-hearings-and-appeals_0.pdf.
 See Plaintiffs’ Motion for Summary Judgment and Memorandum of Points and Authorities in Support, Document 39, filed October 14, 2016, available at http://www.aha.org/content/16/161017-aha-motion-sum-judg-alj.pdf at p. 8.
 See Complaint filed May 22, 2014, Civil Action No. 14-cv-851, available at http://www.aha.org/content/14/%20140522complaint-appeals.pdf.
 Memorandum Opinion, available at https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2014cv0851-48.
 See Government Opening Brief, available at http://www.aha.org/content/17/170221govtopeningbrief.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 firstname.lastname@example.org.
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.