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Court Orders HHS to Eliminate the Huge Backlog of Appeals
November 20, 2018
Parsons Behle & Latimer Healthcare Update


For several years, the Medicare appeals process has been seriously broken. A backlog of 426,000 appeals has so clogged the system that it now takes three to four years for a healthcare provider, whom the government asserts it has overpaid, to have his or her appeal heard by an Administrative Law Judge (ALJ). During the delay, the government could take collection action to recoup overpayments from providers, which often results in severe financial hardship to them and sometimes even bankruptcy. 

During 2014, as the Medicare appeals crisis was becoming critical, the American Hospital Association (AHA) filed suit against the Health and Human Services department (HHS), that oversees CMS/Medicare, seeking a court order compelling HHS to decide Medicare appeals within the 60-day-time-period required by law. After years of proceedings, including two appeals, the Court has now issued what could be a final decision. On Nov. 1, 2018, the federal district court for the District of Columbia ordered Medicare to reduce the backlog of 426,000 ALJ appeals as follows:

  • A 19 percent reduction by the end of fiscal year 2019

  • A 49 percent reduction by the end of fiscal year 2020

  • A 75 percent reduction by the end of fiscal year 2021

  • Elimination of backlog by the end of fiscal year 2022

ALJ appeals are the third (and usually final) level of appeal for most healthcare providers who are appealing a Medicare overpayment. Because providers are usually unsuccessful at the first two levels of the Medicare appeals process, the ALJ level is very important as it is the only level in which the provider is given a hearing, can present witnesses and have the case decided by an attorney judge not affiliated with Medicare. Providers are usually wholly or partially successful about 70 to75 percent of the time at the ALJ level – another reason for its importance, and why the three-to-four-year delay has been so discouraging. Unfortunately, the court’s ruling does not prevent Medicare from continuing collection action against a healthcare provider while waiting for the ALJ hearing.

Though providers will still have to endure delays for the next few years, the new Court ruling is a light at the end of the tunnel.


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