Plan to Clear Medicare Appeals Backlog Hits Judicial Snag

The Department of Health and Human Services (HHS) was told late last year to clear a Medicare appeals backlog by 2021. But a higher-court judge last week said such a task may be impossible under current law, and ordered a halt to the timeline.

The U.S. Court of Appeals for the D.C. Circuit found merit in HHS secretary Tom Price’s assertion that his department couldn’t possibly meet such a speedy deadline unless it simply settled outstanding Medicare appeals en masse without a formal review—an action that would violate existing law.

“If only lawful reforms were implemented, the Secretary claimed, compliance with the timetable would be impossible,” Judge Robert Wilkins wrote in the majority opinion on Friday, August 11. “And just as a court may not require an agency to break the law, a court may not require an agency to render performance that is impossible.”

William Dombi, interim president of the National Association for Home Care and Hospice (NAHC), admitted Monday that the appeals court faces a “complex and thorny” issue with this case, but ultimately called on Congress and CMS to attack the heart of the problem.

“Congress has not addressed the problem sufficiently,” Dombi said in an e-mail to Home Health Care News. “The appeal resources are the equivalent of having a cup to drain an ocean. However, it is not a valid excuse for the court to say that Medicare can violate the law because it is too hard to comply with it.”

The original order came last December in response to a ballooning backlog of Medicare claims. Health care providers that file fee-for-service claims can appeal all denials in a process that’s supposed to take about a year, with four distinct levels of review lasting 60 to 90 days each.

However, as Wilkins noted in his court’s ruling, the number of appeals spiked from 59,600 in fiscal 2011 to 384,000 in fiscal 2013. At that rate, the logjam at the third level is on pace to reach 950,520 by 2021, which could cause some claims to spend 10 years in the system before reaching a resolution.

“This is, of course, far outside the ninety-day timeframe set by statute,” Wilkins wrote.

For comparison, back in 2015, there were a total of 1.2 billion Medicare fee-for-service claims, 123 million of which—or 10%—were denied. Of those, 3.7 million were appealed. Those numbers do not include the backlog, which HHS claimed would approach 700,000 by the end of this fiscal year—and top 1 million by 2021.

The American Hospital Association and several providers joined forces to seek relief, filing a lawsuit that prompted the original order from the U.S. District Court for the District of Columbia.

But Price and HHS fought back, claiming there were simply too many cases to clear out without simply approving or denying them in a single block, denying the government and providers their legal right to explore each case.

While Wilkins largely concurred with this argument, the ruling doesn’t necessarily mean a victory for Price and a return to indefinite backlogs. The circuit court merely kicked the case back to the lower U.S. District Court, which is now tasked with more carefully deciding whether or not Price and HHS can pull the project off.

“Difficult as it was, however, courts must ensure that it is indeed possible to perform the act being commanded,” Wilkins concluded. “Ought, after all, implies can.”

Dombi also slammed the complex and demanding nature of the current Medicare system as a reason for such a high appeals rate, noting that this case wasn’t addressing the cause of the backlog.

“The appeals backlog is really symptomatic of a bigger problem,” Dombi continued. “Medicare has gotten so demanding on perfect paperwork and so confusing as to what it takes to establish benefit eligibility that an unmanageable volume of appeals can be expected for years to come. Medicare should address the root cause of the appeal volume as an immediate priority.”

Written by Alex Spanko

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Alex Spanko
Assistant Editor at Aging Media Network
Alex covers the skilled nursing and reverse mortgage industries for Aging Media. Outside of work, he reads nonfiction, yells at Mets games from his couch, and enjoys pretty much any type of whiskey or scotch — often all at once.

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