HHS wins delay in Medicare backlog case

HHS will have another few weeks to review the American Hospital Association's ideas for reducing the backlog of denied Medicare claims, a federal judge has ruled. The trade group opposed the extension in court documents.

U.S. District Judge James Boasberg gave HHS until Aug. 3 to respond to the ideas AHA filed in June. The original deadline was July 12. However, it falls short of the Aug. 15 deadline HHS had requested.

HHS said it was delayed because it is waiting for updated numbers of where the backlog stands now since policy changes over the past year may cause the backlog to drop. For instance, in March Congress increased funding by $75 million to hire new staff to review appeals.

Joel McElvain, a lead attorney for HHS on the case, also resigned from the Department of Justice in June after the Trump administration announced it would not defend the Affordable Care Act in court.

"McElvain has played an active role in the development of litigation strategy in this matter, and it will require some time for a replacement supervisor to prepare for participation in this case," HHS said in court documents.

An HHS spokesperson said it would not comment on ongoing litigation.

Boasberg did not say why he granted only part of the extension. But previously, he reportedly has expressed frustration with the agency's inability to process appeals. As of June 2017, 607,402 pending appeals would not be reviewed for another three years, the agency predicts. At this rate, the backlog will reach 950,520 appeals by the end of fiscal 2021.

The judge asked the AHA to submit ideas to help HHS. The AHA suggested having Medicare recovery audit contractors return a portion of their fees to HHS if too many of their denials are overturned.

Another idea was to have claims reviewed by quality improvement organizations instead of recovery audit contractors. QIOs include health quality experts, clinicians and consumers. Physicians are often the first to review claims in these organizations and because they're practitioners, are more likely to understand clinical decisions that may have led to the denied claim.

The AHA attempted to fight the extension, refuting each of HHS' reasons for delay, and saying because McElvain left in early June, there had been enough time to replace him.

"HHS cannot dawdle when plaintiffs are burdened by the backlog and press for speed when it is the one under the gun," AHA argued in court documents.

The trade association said it was disappointed the extension was granted.

"The heavily backlogged and broken system continues to place a strain on hospitals that have billions of dollars in Medicare reimbursement tied up in appeals," said Melinda Hatton, AHA general counsel.

"Many recommendations that we have long suggested, including directly to HHS, could be taken by the agency to make progress toward the reduction and further growth of the Medicare billing appeals backlog and to prevent another large influx of appeals as a result of faulty assessments," she added.