News: Medicare appeals backlog persists, HHS says

Despite the nearly $1.5 billion settlement CMS paid to hundreds of U.S. hospitals as part of a longstanding Medicare billing dispute, the Department of Health and Human Services is still experiencing significant delays in Medicare appeals.

In fact, federal records show that despite settling 260,000 claims in the 2015 fiscal year, the backlog of Medicare billing dispute appeals at the Administrative Law Judge (ALJ) and Medicare Appeals Council levels shows no sign of easing, according to an article released by the Office of Medicare Hearings and Appeals (OMHA), a subset of the HHS that administers Medicare billing dispute appeals independently of CMS.

Last week, CMS released a list of 2,022 U.S. hospitals that received billing dispute settlement payments last year. CMS offered to pay hospitals 68% of the value of inpatient claims that had been held up in Medicare’s hearings and appeals process, some of which were awaiting a decision by an administrative law judge for more than eight years. Kaiser Health News reported 35 hospitals got more than $5 million in the deal, with a median payment of $307,642.

Though the settlements did decrease the ALJ and Council backlogs slightly, it could still take 11 years for OMHA and six years for the Council to process their respective backlogs. For the federal fiscal year ending September 2015, more than 884,000 Medicare claims were awaiting adjudication before ALJs. Another 14,800 disputed claims were awaiting hearings before the Medicare Appeals Council.

In its report, OMHA does recognize the problem, and recently launched a three-pronged plan to reduce the appeals backlog, including legislative reforms, “administrative actions,” and encouraging resolution of cases earlier in the appeals process. Based on the projections of the plan, OMHA predicts the backlog is expected to be approximately 1 million appeals by the end of FY 2020. However, this is nearly 50% less than what would have been pending if these administrative actions were not taken, OMHA says.