HHS details status of appeals backlog

FALLS CHURCH, Va. - The Office of Medicare Hearings and Appeals receives more than a year's worth of appeals work every 24 weeks at the third level of appeals, according to a recent PDF posted to the agency's website.

As of the end of the fourth quarter of fiscal year 2016, the pending workload at the administrative law judge level exceeded 650,000 appeals, while annual adjudication capacity going forward was about 92,000 appeals, according to the “HHS Primer: The Medicare Appeals Process.”

At the first and second level of appeals, CMS is currently meeting its statutory timeframes to process appeals and is not experiencing a backlog, HHS says.

At the fourth level of appeals, the Medicare Appeals Council is currently receiving more than a year's worth of appeals work every 10 weeks. As of the end of the fourth quarter of fiscal year 2016, the pending workload at the council exceeded 22,000 appeals, while annual adjudication capacity was about 2,600 appeals, HHS says.

Several companies are generating a significant portion of the appeals backlog, HHS says. Four DME companies and one state Medicaid agency filed 51% of appeals at the ALJ level in the first quarter of fiscal year 2015, it says. Three DME companies filed 35% of the appeals at the second level of appeals, or the QIC level, in 2015 compared to just 12% in 2012.

HHS says the current appeals structure encourages appellants to appeal every claim because there is no filing fee and because the minimum amount in controversy required for an ALJ hearing, $160, is substantially lower than the amount required for judicial review, $1,560.

HHS says it has a three-pronged approach to addressing the backlog and improving the system: invest new resources at all levels of appeal to increase adjudication capacity and implement new strategies to alleviate the current backlog; take administrative actions to reduce the number of pending appeals and encourage resolution of cases earlier in the process; and propose legislative reforms that provide additional funding and new authorities to address the appeals volume.

Without administrative action, HHS estimates the appeals backlog at OMHA will exceed 1.5 million by the end of fiscal year 2021.