District Court Orders End of Medicare Claims Appeal Backlog by 2020.

The United States District Court for the District of Columbia recently ordered the Department of Health and Human Services (HHS) to eliminate pending Medicare claims appeals.  This is the latest action in a two-and-a-half year pending litigation initiated by the American Hospital Association and several hospitals.  The case arose when the plaintiffs challenged HHS’s failure to meet the statutory time frames related to the adjudication of Medicare claims appeals.

Under the governing law, an Administrative Law Judge (ALJ) is required to hold a hearing and render a decision within 90 days of a party’s filing of an appeal.  However, due to volume and inadequate resources, HHS has been unable to comply with this statutory deadline, resulting in a backlog of almost one million pending appeals.  On July 15, 2013, HHS placed a moratorium on accepting new appeal requests in order to catch up on pending appeals.

HHS must meet the following deadlines and mandatory percentage reductions of the current backlog of cases pending at the ALJ level:

• Thirty percent reduction of the backlog by December 31, 2017;
• Sixty percent reduction of the backlog by December 31, 2018;
• Ninety percent reduction of the backlog by December 31, 2019; and
• One hundred percent reduction of the backlog by December 31, 2020.

If HHS fails to meet the deadlines, claimants with Medicare appeals that have been pending at the ALJ level for over a calendar year may move for default judgment.  HHS must submit a report every 90 days on its progress in reducing the backlog and include updated figures for the current and projected backlog.  Further, HHS must describe any significant administrative and legislative actions that may affect the backlog.

HHS pointed out to the Court that the timetable would require making payment on Medicare claims regardless of the merit of those claims, which would conflict with Medicare regulations.  The Court, however, responded that HHS has already violated a Medicare statute through noncompliance with statutory deadlines, and that the timetable will provide a reasonable period for proper claim substantiation.  The Court opinion further observed that satisfying the statutory demands for both accuracy and timeliness will prove challenging, but offers a reasonable timeframe.  The Court will retain jurisdiction over the matter if HHS fails to meet the court-ordered deadlines.

The District Court opinion is available at:

https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2014cv0851-48.