Federal Appeals Court Orders Second Look at Medicare Appeals Backlog and Addresses HHS Priorities.

Date posted: March 1, 2016

The U.S. Court of Appeals for the D.C. Circuit recently overturned a 2014 district court decision regarding Medicare appeals backlogs.  The American Hospital Association and three hospitals initially filed the claim against the Secretary of the Department of Health and Human Services (HHS).  Previously, the district court had granted the Secretary’s motion to dismiss for lack of jurisdiction; concluding that the agency’s delay in resolving appeals was not unreasonable.

According to federal regulations, administrative law judges must review appeals of Medicare claim denials within 90 days of a timely filed petition for review.  Further, the Departmental Appeals Board must review appeals within 90 days of receiving a request.  However, appeals from Medicare overpayment determinations have grown far beyond the statutory timeframes of review.  The Court noted that the Office of Medicare Hearings and Appeals (OMHA) can only process approximately 72,000 appeals per year.  However, OMHA received 400,000 appeals in fiscal year 2013, and its backlog consisted of over 800,000 appeals in July 2014.

The three hospital plaintiffs claimed that significant amounts of Medicare funds had become tied up in the appeals process, including funds from appeals that have surpassed statutory timeframes.  The plaintiffs noted that the “inability to access these funds makes a number of essential activities, such as replacing ICU beds, difficult or impossible.”  HHS contended that the established appeals and judicial review process is an adequate remedy for hospitals.  The Court, however, did not agree that the process allowed OMHA to resolve appeals in a timely manner and called the backlogs a “systemic failure to comply with deadlines.”  Therefore, the Court reversed the district court’s decision and remanded the case for further review.

The U.S. Court of Appeals opinion is available at:

https://www.cadc.uscourts.gov/internet/opinions.nsf/CDFE9734F0D36C2185257F540052A39D/$file/15-5015-1597907.pdf.

Am. Hosp. Ass’n v. Burwell, No. 15-5015, (D.C. Cir. Feb. 9, 2016).

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