Final Rule to Revamp Medicare Appeals with ALJs Published

On Jan. 17, the Department of Health and Human Services (HHS) published a final rule which revises HHS procedures at the administrative law judge (ALJ) level for appeals of payment and coverage determinations for items and services furnished to Medicare beneficiaries, enrollees in Medicare Advantage and other Medicare competitive health plans. The goal of the final rule is to solve the systemic delay in the Medicare appeals process by streamlining administrative appeal processes, increasing consistency in decision-making across appeal levels, and improving efficiency for both appellants and adjudicators. The final rule also benefits Medicare beneficiaries by clarifying processes and adding provisions for increased assistance to appellants who are unrepresented.

HHS published its proposed rule to revamp the Medicare appeals process at the ALJ level back on July 5, 2016. HHS has been and continues to be criticized for the Medicare appeals backlog. Between fiscal years 2010 and 2014, the number of ALJ appeals grew 936 percent (from 41,733 to 432,534), by the end of fiscal year 2014, there were 767,422 appeals pending at the ALJ level, and ALJ decisions are being issued far after the 90-day statutory deadline (it took the Office of Medicare Hearings and Appeals (OMHA) 415 days to process an appeal in fiscal year 2014, 662 days in fiscal year 2015 and 877 days in fiscal year 2016). On Dec. 5, 2016, the U.S. Court of Appeals for the D.C. Circuit, in American Hospital v. Burwell, ordered the secretary of HHS to pursue various administrative and legislative forums to tackle the significant Medicare appeals backlog. The HHS secretary was ordered to reduce the Medicare appeals backlog according to the following timeline: 30 percent reduction from the current backlog of cases pending at the ALJ level by Dec. 31, 2017; 60 percent reduction by Dec. 31, 2018; 90 percent reduction by Dec. 31, 2019; and 100 percent reduction by Dec. 31, 2020. The final rule, which took effect on March 20, 2017, implements HHS’s three-pronged strategy to address Medicare appeals backlog: