March 10, 2017

HHS says it cannot clear Medicare claims appeals backlog by 2021

Daily Briefing

    HHS officials in a report filed this week in federal court said the department lacks the money and resources needed to meet a court-ordered deadline for clearing a backlog of Medicare claims appeals.

    Background: Federal judge orders HHS to eliminate Medicare appeals backlog by 2021

    A federal judge in December 2016 ordered HHS to clear the backlog by 2021. The ruling was the result of a lawsuit the American Hospital Association and a group of hospitals filed in May 2014 against HHS that focused on Medicare claims appeals filed through the Recovery Audit Contractor (RAC) program. The RAC program identifies situations in which providers allegedly inappropriately billed Medicare and recouped overbilled funds.

    Judge: HHS must eliminate its Medicare appeals backlog—by 2021

    The lawsuit claimed the length of time it takes a provider to challenge a RAC decision violates the Medicare Act, which sets a 90-day-limit for such appeals to be settled. HHS agreed that the review process was taking too long but said the process has slowed because administrative judges' workloads between 2012 and 2013 increased by a factor of five. The department contended that it lacks sufficient funding to remedy the issue.

    U.S. District Court Judge James Boasberg ordered HHS to eliminate the backlog in accordance with a timeline proposed by AHA. Boasberg also ordered HHS to file progress reports every 90 days on its efforts to reduce the backlog.

    HHS says it cannot meet 2021 deadline

    HHS in the progress report wrote that it is "not possible" for the department to comply with Boasberg's order to reduce the backlog "given [its] current funding and legislative authorities."

    The department wrote that its current staff can process about 92,000 claims annually, adding that it takes time and resources to comply with its "statutory responsibilities" to settle claims "with regard to the merits of those claims."

    HHS wrote that it has not been able to reduce the backlog, noting that it currently has 667,326 pending appeals claims. The department projected that the number of pending claims will increase by 3 percent, to 687,382 by the end of this year and will reach more than one million by the end of 2021 under its current resources (Castellucci, Modern Healthcare, 3/8; Baxter, Home Health Care News, 3/8).

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