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David McGill Blogger

OMHA's Plan to Reduce the Medicare Appeals Backlog

Posted by David McGill | June 29, 2016

On the heels of the GAO's report on the Medicare appeals backlog, the Office of Medicare Hearings and Appeals published its own document setting forth its plan to address the issue. Here's what you need to know.

  1. OMHA states that it has no claims backlog at appeal levels 1 and 2. The backlog starts at level 3 (ALJ). 
  2. OMHA is trying to address the backlog by (a) investing new resources at all appeal levels, (b) taking administrative actions to reduce the number of pending appeals and encourage early claim resolution and (c) proposing legislative reforms.
  3. Administrative actions include settlement conferences overseen by OMHA mediators, prior authorization of claims, and OMHA senior attorneys drafting recommended decisions that ALJ's publish if they agree with the recommendation.
  4. OMHA points out that the FY 2017 budget proposal includes multiple elements designed to reduce the backlog, including (a) requiring a refundable filing fee at each appeal level, and (b) remanding appeals to the first appeal level if new evidence is introduced at the second or third levels.

What does this mean for you?

The Medicare appeals backlog starts at level 3 of appeal (ALJ). As a result, many of OMHA's proposals attempt to address that problem by restricting access to ALJs. 

For example, settlement conferences overseen by OMHA mediators represent a new "pre-ALJ" step in the overall appeals process. (This is currently an option for providers/suppliers that wish to try it; not a requirement). Similarly, allowing OMHA senior attorneys to draft recommended decisions for ALJs again adds a barrier to providers'/suppliers' direct access to ALJs. Finally, remanding appeals to the first level of appeal if new evidence is introduced later on again pushes the appeal away from the ALJ to another decision maker. 

While these proposals will likely help reduce the appeals backlog, they also have another effect: they deprive providers and suppliers of their regulatory right to an objective hearing by an ALJ - a right, incidentally, that when exercised, results in the reversal of more than 50% of denied DMEPOS claims. 

As discussed in our previous post on this topic, from 2010-14, providers and suppliers had a better-than-even chance of obtaining a favorable decision when presenting their case to an ALJ. Stated another way, ALJs ruled that Medicare contractors incorrectly denied more than 50% of the DMEPOS claims that came before them. In light of that fact, any measure that deprives or delays the right to get to an ALJ may well decrease your overall chances of success.

For example, the proposal to return claims to level 1 upon the introduction of new evidence at later appeal levels (a) kicks the appellant back to the fact finders who rejected nearly 75% of appeals in 2014, and (b) arguably punishes suppliers who provide new evidence supporting their clinical intervention, even when that evidence wasn't available when the appeal process began. (OMHA states that this proposal will encourage suppliers to provide all evidence initially without failing to consider situations where new evidence - particularly clinical outcomes - can't be provided at the beginning of the appeal process because it didn't exist). 

In conclusion, while we applaud the OMHA's efforts to try to reduce the backlog of Medicare appeals, we have concerns about many of the mechanisms being explored to achieve that goal. Össur R&R believes that any solution to the backlog problem must balance the need for efficient resolution against the need for a truly objective hearing on the facts. The GAO data establishes that ALJs frequently disagree with contractors' denials. Any solution must therefore also address why so many claims ultimately determined to be valid are nevertheless denied at appeal levels 1 and 2.

We will provide further information about the Medicare appeals backlog and OMHA's efforts to address it as it becomes available.

Össur R&R

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