HHS Ordered to Clear Medicare Claims Appeal Backlog by 2021

U.S. District Judge James Boasberg ordered The Department of Health & Human Services (HHS) to clear its backlog of Medicare reimbursement appeals by the end of 2020. The order comes by way of a motion for summary judgment, filed by the American Hospital Association (AHA) and other medical centers, who filed suit to compel HHS to meet the statutory deadlines for review of Medicare claim denials within 90 days.

Plaintiffs claim the backlog stems from the Recovery Audit Contractor (RAC) Program, an auditing program implemented to identify and collect improper Medicare payments. Healthcare providers may appeal denied claims before the HHS Office of Medicare Hearings and Appeals (OMHA) in a five-level appeal process. Third-level appeals are brought before administrative law judges (ALJ). The increase in RAC appeals resulted in OMHA suspending new requests for ALJ hearings in December 2013, in violation of statutory deadlines for ALJ review. As of April 2016, OMHA had more than 750,000 pending appeals, but could get through only 77,000 per year.

On December 5, 2016 Judge Boasberg ordered HHS to reduce its backlog incrementally over the next four years. Specifically, HHS is to reduce the backlog by 30% in 2017; 60% by 2018; 90% by 2019 and completely by December 31, 2020. If the Secretary fails to meet the deadlines, the plaintiffs may move for default judgment or to otherwise enforce a writ of mandamus. In addition, the court is requiring HHS to provide 90-day status reports on its progress. HHS asserts that without substantial new resources and authorities from Congress, it has no means to meet the reduction targets without improperly paying claims and violating its fiduciary duty to the Medicare Trust Fund. HHS is currently seeking a motion for reconsideration.