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HHS says it can't clear Medicare appeals backlog by 2021 deadline

HHS officials say they don't have the money or resources to wipe out their pending Medicare billing appeals by a court-imposed 2021 deadline.

In a report to a U.S. District Court in the District of Columbia this week, HHS said it hasn't been able to effectively reduce its Medicare billing appeals backlog, and it has even more pending appeals than previously anticipated.

The court last year ordered the federal agency to fully clear all pending Medicare appeals from hospitals by Jan. 1, 2021, resolving a long-standing dispute with the American Hospital Association. The group sued HHS in 2012, alleging it took far longer than the 90-day limit for a hospital to dispute a denied claim by Medicare recovery audit contractors. HHS must also follow a gradual elimination process and file reports to the court every 90 days on its progress.

HHS said there are currently 667,326 pending appeals, and it projects the number of pending appeals will rise 3% by the end of 2017 to 687,382. That number will eventually rise 46% by the end of 2021 to just over 1 million claims.

According to the ruling by U.S. District Judge James Boasberg, HHS must reduce the logjam of pending claims by 30% at the end of 2017. That figure increases to 60% by the end of 2018 and 90% by the end of 2019.

In his December 2016 ruling, the judge viewed the plan, proposed by hospitals that sued HHS, as a happy medium between wide-scale settlements and the stagnant status quo.

HHS told the court on Monday that complying with the plan is “not possible given current funding and legislative authorities.” The agency claimed the Office of Medicare Hearings and Appeals is only staffed to address about 92,000 appeals claims per year.

Although the agency said it has made efforts to reduce the backlog of pending Medicare claims and has slowed backlog growth “significantly," those efforts have not been enough.

For example, HHS reopened an initiative to settle some appeals by hospitals. But HHS told the federal court that providers' interest has been significantly lower than anticipated, likely because they expect larger payments through an appeals process than they would receive in a settlement.

HHS also wants to ensure it doesn't violate its "statutory responsibilities" to only settle appropriate claims, which requires time and resources.

The agency also issued a final rule at the tail end of the Obama administration that would eliminate repetitive procedures such as allowing attorney adjudicators to decide when appeals decisions can be issued without an administrative law judge hearing.

The rule is set to go into effect March 20, but it could be stalled by the Trump administration.

HHS has consistently pushed back against the 2021 deadline, telling the court shortly after its ruling that the mandate wouldn't be feasible with current funding.


Maria Castellucci covers safety and quality topics for Modern Healthcare’s website and print edition. Castellucci is a graduate of Columbia College Chicago and started working at Modern Healthcare in September 2015.

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