HHS Moves To Clear Backlog Of Beneficiary Appeals

Medicare beneficiaries who have been waiting months and even years for a hearing on their appeals for coverage may soon get a break as their cases take top priority in an effort to remedy a massive backlog.

Nancy Griswold, the chief judge of the Office of Medicare Hearings and Appeals (OMHA), announced in a memo sent last month to more than 900 appellants and health care associations that her office has a backlog of nearly 357,000 claims. In response, she said, the agency has suspended acting on new requests for hearings filed by hospitals, doctors, nursing homes and other health care providers, which make up nearly 90 percent of the cases. She said that she expected the suspension would last about two years.

But beneficiaries’ appeals will continue to be processed, and officials are seeking to “ensure that the relatively small numbers of beneficiary-initiated appeals are being immediately addressed by prioritizing their cases,” the U.S. Department of Health and Human Services said in an announcement in the Federal Register.

“Because they are among our nation’s most vulnerable populations, OMHA is committed to being as responsive as possible to the Medicare beneficiary community, regardless of the challenges presented by the significant increase in the number of requests being filed,” Judge Griswold wrote in an email in response to a reporter’s questions. “Beneficiary appeals continue to be assigned as quickly as OMHA can process them, and processing times for beneficiary appeals are expected to decrease.”

From 2010 through 2013, the cases grew by 184%, “while the resources to adjudicate the appeals remained relatively constant,” Griswold wrote in her memo last month. The office received 1,250 appeals weekly in January, 2012, but that has ballooned to more than 15,000 a week last November, and the average wait time is now 16 months. Since 2010, the number of administration law judges has increased by two to 65.

“We have elderly or disabled Medicare clients waiting as long as two years for a hearing and nine months for a decision,” said Judith Stein, executive director of the Center for Medicare Advocacy. They are typically appealing the denial of coverage for home care, nursing home care, challenging observation classification, ambulance trips and other services. Among them is a Connecticut man who requested a hearing a year ago to appeal the denial of nursing home coverage. He has since died, but his family is still pursuing the case, which is scheduled for a hearing next October.

Hospitals also report that the wait time for decisions on their appeals exceed the legal limit of 90 days, said Melissa Jackson, senior associate director for policy at the American Hospital Association. Adding two years to the process “is a violation of the statute.” She blamed the stepped-up scrutiny of hospital charges by recovery audit contractors whose payments are based on the number of questionable claims they uncover. Hospitals are then forced to appeal these denials, she said, “in order to get paid for medically necessary services.” And most of the time they win these challenges, she added.

Last Tuesday, the hospital association asked Medicare chief Marilyn Tavenner to suspend the audits until all pending appeals have been processed. Stopping the audits “would be the most straightforward solution, particularly since the next round of [audit] contracts has not yet been finalized,” wrote executive vice president Rick Pollack.

While the appeals office copes with the thousands of waiting cases and holds off handling new provider appeals, Stein was not sure if beneficiaries’ cases will move more quickly. Griswold revealed the suspension affected most hearings requested after April 1, 2013, but Stein said she had seen no improvement for seniors over that time.

“Most of my clients should not have to wait for a hearing as it is because they should have been granted coverage at the early stages of appeal,” she said. “There are too many people who can’t get a fair shake at the lower levels of appeals and that’s a big reason why so many have to go on to a hearing.”

A hearing before an administrative law judge is the third level of appeal and the first opportunity for appellants to present arguments to a person, since the first two appeals are decided by Medicare contractors who review case files. At the hearing, testimony can be provided, witnesses can be cross-examined, and new evidence can be introduced.

It also offers the best chance of winning, a 2012 investigation by the HHS inspector general found. The judges reversed the lower level denials 56 percent of the time for all appellants, including 61% of the time for providers and 28 percent for beneficiaries. When investigators looked at the appeals by type of claim, they found that the judges reversed 72% of denials involving payment for hospital care, under Medicare’s Part A hospitalization benefit.

In addition to the increase in appeals filed in response to more stringent audits of hospital claims, the OMHA caseload has expanded along with the increased number of Medicare beneficiaries and because the agency now handles appeals of prescription drug coverage, a benefit that was added in 2006.

Next month, the OMHA is hosting a day-long forum to provide more details to appellants.

 Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.