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HHS Proposes Changes to Medicare Appeals Process

Agency faces backlog of more than 700,000 cases

The Department of Health and Human Services (HHS) has proposed key changes in the Medicare appeals process to help reduce the backlog of more than 700,000 cases, according to a report from Kaiser Health News. The HHS has faced increased criticism from health care providers and beneficiary advocates for its inability to speed up appeals and reduce the backlog. The latest critique came earlier this month in an investigation from the Government Accountability Office (GAO).

The proposed measures “will help us get a leg up on this problem,” said Nancy Griswold, chief law judge of the Office of Medicare Hearings and Appeals. If there was not a single additional appeal filed and no changes in the system, it would take 11 years to eliminate the current backlog, Griswold said in an interview.

This latest effort, however, still falls short of what is needed, according to Tom Nickels, executive vice president at the American Hospital Association. “We are deeply disappointed that HHS has not made more progress in addressing the delays despite the more than two years since the delays began,” he said.

The new proposals, as well as increased funding requests, are expected to eliminate the backlog by 2021 by streamlining the decision-making process and reducing the number of cases that go to the third level of appeals, where many cases linger waiting for a hearing and then a decision from an administrative law judge. From the day of the hearing, it currently takes an average of slightly more than two years for a decision in appeals from hospitals, nursing homes, medical device suppliers, and other health care providers.

Among the proposed changes:

  • Designate some decisions from the Medicare Appeals Council, the last of four stages of appeals, as precedents that decision-makers at lower levels would have to follow. That could eliminate redundant appeals and resolve inconsistencies in the interpretation of Medicare policies.
  • Allow senior attorneys to handle some of the procedural matters that come before the administrative law judges, such as dismissing a request for a hearing after the appellant has withdrawn the request, Griswold said.
  • Revise how the minimum amount necessary to lodge an appeal is determined. Under current rules, an appeal must involve payment of at least $150, based on the amount the provider charged. The HHS is proposing to use Medicare’s allowed amount instead, which tends to be lower, and that could reduce the number of claims that could be appealed.
  • Eliminate some steps in the appeals process to simplify the system.

Alice Bers, an attorney at the Center for Medicare Advocacy, was skeptical about some of the proposals. The effort to set up a system of precedents, she said, “could restrict coverage for needed items and benefits for seniors that they are entitled to by law.”

And the change in calculating the minimal amounts “could make it harder for beneficiaries to reach that threshold,” said Bers. It might not sound like a lot of money, Bers said, “but for an elderly woman living on Social Security that’s several meals or co-pays for medicine.”

The proposals do not address what hospital representatives say is a key cause of increasing appeals–– independent audit contractors who can reject payments to hospitals. The American Hospital Association contends that those contractors unnecessarily cut off many payments and that hospitals often win the appeals.

According to the GAO study, audit-related appeals decided at the administrative law judge stage—the third level of appeals—increased 37-fold from 2010 through 2014, compared with only 1.5 times for appeals of other kinds of claims. But Griswold said that currently only about one-third of the pending cases at this stage involved recovery audit contractors, after settlements were reached with appellants who agreed to accept partial payment. As a result of these agreements, 4,245 cases from just 16 appellants were withdrawn from the system as of May 12, according to government statistics.

Griswold also said Medicare will continue to process beneficiary appeals before those from hospitals, doctors, and other health care providers. That practice began in 2014.

The proposed changes will be posted on the Federal Register website and open to comments through August 29.

Source: Kaiser Health News; June 29, 2016.

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