A federal judge in Washington, D.C., has denied HHS' request to delay proceedings in a lawsuit filed by hospitals across the country over the Medicare appeals backlog.
The suit centers on the Recovery Audit Contractor program. The RAC program's mission is to correct improper Medicare payments by identifying and collecting over- and underpayments. Healthcare providers have the option of appealing recovery auditors' findings, and HHS' Office of Medicare Hearings and Appeals administers hearings concerning denied Medicare claims. Claim denials that reach the third level (of five possible levels) of the appeals process are brought before administrative law judges, who issue decisions regarding coverage determinations.
Due to a backlog in RAC appeals, OMHA announced a temporary suspension of most new requests for ALJ hearings concerning payment denials in December 2013. In May 2014, the American Hospital Association, Baxter Regional Medical Center in Mountain Home, Ark., Covenant Health in Knoxville, Tenn., and Rutland (Vt.) Regional Medical Center filed suit concerning the backlog. They brought the matter to compel HHS to meet the statutory deadlines for ALJ review of Medicare claim denials.
The plaintiffs' legal claims were dismissed in 2014, but the U.S. Court of Appeals for the District of Columbia reversed the dismissal in February. The appeals court remanded the case to the lower court, and instructed the court to "consider the problem as it now stands — worse, not better."
On May 25, HHS requested to pause litigation until October 2017 to see if administrative and legislative fixes will reduce the backlog. On Monday, U.S. District Judge James E. Boasberg denied HHS' motion.
"The court cannot conclude that the secretary's current proposals will result in meaningful progress to reduce the backlog and comply with the statutory deadlines," Judge Boasberg stated.
Although the case will not be delayed, there still is not a solution to the problem. "The court, however, does not possess a magic wand that, when waved, will eliminate the backlog," wrote Judge Boasberg. "Plaintiffs' suggestion that the court simply order HHS to resolve each of the pending appeals by the statutorily prescribed deadlines is extremely wishful thinking."
The judge ordered the parties meet for a status conference to decide how to proceed in the case.
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