Recently the United States Department of Health and Human Services (HHS) and the American Hospital Association (AHA) filed a joint status report in litigation surrounding the huge backlog of Medicare appeals. The joint status report follows an October 2022 Order that mandated HHS to “reduce the backlog of Medicare reimbursement appeals pending before administrative law judges (ALJs) in the Office of Medicare Hearings and Appeals (OMHA) by 98% by the end of the second quarter of fiscal year (FY) 2023.”
HHS Report
HHS reported that not only did they meet the goal of reducing the backlog by 98%, but they exceeded it. On November 1, 2018, the backlog of cases pending before ALJs in OMHA was about 426,594. As of March 31, 2023 (the end of Q2 of FY 2023), there were only 663 appeals pending that had not been adjudicated within 90 days. According to the filing, this number represents a 99.84% reduction of the backlog.
HHS goes on to note that not only did the agency exceed the 98% reduction target, but 623 of the 663 pending backlog cases are subject to tolling events or waivers of the adjudication time frame.
Of the 663 pending backlogged appeals, only 7% are acute inpatient hospital appeals and none are acute inpatient rehabilitation facility appeals. Roughly 58 of the 663 pending backlogged appeals are “big box” appeals, meaning they include prior administrative determinations on at least 30 (but sometimes hundreds or thousands of) individual claims. Additionally, there are only 15 backlogged recovery audit contractor (RAC) appeals, a 99.96% reduction from the 437,524 that were pending on September 30, 2015.
As far as timing of the 663 backlogged appeals, 508 are from FY 2023; 147 are from FY 2022; 4 are from FY 2021; 3 are from FY 2020; and 1 is from FY 2019.
HHS also noted in the report that the speed of disposing of appeals continues to exceed receipts of new appeals. For the first two quarters of FY 2023, OMHA received about 20,885 new appeals and resolved 33,364 appeals.
AHA Response
While AHA was, of course, pleased with the dramatic reduction, it still shared some concern about HHS and the ongoing cases that remain pending. One such concern is that HHS was unable to provide information about the pending big-box appeals, and that considering each big box appeal can contain “hundreds or thousands of claims,” the backlog could be “significantly larger than HHS reports.” AHA was also frustrated by the handful of appeals that remain pending from 2019, 2020, and 2021, when “they should have been decided in 90 days.”
However, AHA notes that given the “assurances” that there are no significant backlog of inpatient acute hospital appeals, including within the single big-box inpatient acute hospital appeal, they are satisfied for the time being. However, they “will remain vigilant and hold HHS to account if a backlog again begins to develop.”