HHS Reduces Medicare Appeals Backlog by 43%

The latest Medicare appeals backlog status report, acquired by the American Hospital Association (AHA), shows a 43 percent reduction in the number of pending appeals at the Administrative Law Judge level, putting HHS ahead of schedule with clearing the backlog.

“By the end of the second quarter of 2020, a total of 242,995 appeals remain pending at OMHA [Office of Medicare Hearings and Appeals], which is a 43 percent reduction from the starting number of appeals identified in the Court’s order (426,594 appeals),” HHS told the court last week in a statement also acquired by the AHA.

Per a federal judge’s ruling in favor of the AHA in 2018, HHS must eliminate the Medicare appeals backlog as measured by the FY 2018 backlog of 426,594 appeals by the 2022 fiscal year (FY) according to court-ordered schedule.

The schedule states that HHS is to reduce the backlog of appending cases at the administrative law judge level by nearly half by the end of FY 2020.

The most recent status report puts HHS ahead of schedule for reducing the backlog by 49 percent by the end of the fiscal year. The recent reduction in pending appeals appears to be from increased OMHA adjudications, AHA reported.

OMHA dispositions, including cases involving Recovery Audit Contractors (RAC) and the Settlement Conference Facilitation, removed 33,616 appeals at the administrative law judge level during the second quarter of FY 2020, the status report showed. Of those, the vast majority (26,192) were non-RAC dispositions.

Beyond OMHA dispositions, there was a significant removal of 2,303 appeals due to combinations of cases for efficiency, 1,040 appeals from the QIC [Qualified Independent Contractor] demonstration, and 640 appeals from inpatient rehabilitation facility settlements.

HHS noted that starting in FY 2019, the Settlement Conference Facilitation and Inpatient Rehab Facility Settlement counts are “non-adds” to avoid double counting.

The Serial Claims Initiative, low-volume appeals, and hospital settlements represented a very small number of closed appeals in the second quarter of FY 2020, the report also showed.

OMHA dispositions have been key to reducing the Medicare appeals backlog since FY 2015, although the number of appeals removed due to these dispositions has dipped as of late, according to the status point.

OMHA dispositions removed a record of 395,128 appeals in FY 2016, with subsequent reductions of 209,780 appeals in FY 2017; 224,247 in FY 2018; and 168,568 in FY 2019. So far this fiscal year, OMHA dispositions have removed a total of 65,578 appeals.

Congress appropriated $182.3 million to HHS for the purpose of funding efforts to reduce the Medicare appeals backlog in March 2018. The funding has helped to boost the department’s efforts to resolve growing number of appeals, which have exceeded OMHA’s and the Medicare Appeal Council’s capacity to process claims.

With the 70 percent increase in funding, HHS was able to increase staffing at the administrative law judge level and more than double the appeal court’s disposition capacity, HHS told the court in 2018. The department also agreed at that hearing that it would indeed be able to clear the Medicare appeals backlog by the FY 2022 deadline.

In 2016, the Government Accountability Office (GAO) said that significant growth in the number of appeals had led to a backlog that showed “no signs of abating,” particularly at higher levels of the appeals process. The watchdog recommended that HHS take four actions, including improving the completeness and consistency of the data used by HHS to monitor appeals and implementing a more efficient method of handling appeals associated with repetitious claims.