Skip navigation

David McGill Blogger

Federal Court Issues Decision on Delays in Medicare Appeal Process

Posted by David McGill | September 21, 2016

​As first reported by the National Association for the Advancement of Orthotics & Prosthetics, the District of Columbia's federal court issued a decision Monday applying pressure on Medicare to resolve the longstanding and worsening problem of delayed ALJ hearings for Medicare appeals. What were the issues the court addressed? What does it mean for you? Here's the quick(ish) summary:

1. What was the court deciding?

The ​​Secretary of Health and Human Services - the agency that oversees the Medicare program - requested that the court delay a lawsuit filed by the American Hospital Association and several hospitals until September 30, 2017. The plaintiffs were seeking a court order requiring Medicare to process their claim appeals in accordance with statutory guidelines.

The District Court denied HSS's request.

2. What were the Court's key findings?

  • The Court noted that while a Medicare claim should proceed through all 4 steps of the appeal process within 1 year, it now takes the Office of Medicare Hearings and Appeals an average of 935 days."]
  • "[T]he delays have resulted in a 'real impact on 'human health and welfare.''"​
  • "Rehabilitation hospitals ... win 80% of their reimbursement claims on appeal. [ ] That figure is even higher - 87% - when the win rate is calculated using the value, rather than the number, of the claims, [ ] suggesting the vast majority of [the funds not paid by Medicare] rightfully belongs with the hospitals."
  • "Because of the consequent financial burden, some providers are 'forced ... to reduce costs, eliminate jobs, forgo services, and substantially scale back,' all of which affects the quality and quantity of patient care." 
  • "HHS asserts that [ ] administrative measures now underway ... will result in 50% fewer backlogged OMHA appeals in FY2020 than would exist absent the interventions. [ ] Sounds like 'significant progress towards a solution,' doesn't it? Alas, no. As is often the case, the devil is in the details."
  • Even assuming each one of the Secretary's administrative fixes ... is implemented according to plan, the OMHA backlog will still grow​ every year between FY2016 and FY2020 - from 757,090 to 1,003,444 appeals. ... '[S]ignificant progress toward a solution' cannot simply mean that things get worse more slowly than they would otherwise."

Based on the above, the Court concluded that "[t]he balance of interests drives the conclusion that there are equitable grounds for [granting plaintiffs' request], and the Court will not issue a stay and further delay the proceedings."

3. What does this mean for you?

This decision creates pressure on HHS to find a better solution to the appeals backlog than the administrative efforts it has advanced so far. However, as the Court itself noted, it "does not possess a magic want that, when waved, will eliminate the backlog." 

As a result, we would characterize this development as an important initial win for providers. But how exactly or when this effects actual change on the Medicare appeals process remains to be seen. 

We will update you on this topic when additional information becomes available in the future.​

Össur R&R

The Source for O&P Reimbursement & Regulatory News & Analysis

If you have any questions for Össur’s Reimbursement Team or about Össur’s Reimbursement Services, please contact us at [email protected]