Navigating the complex maze of coverage and reimbursement rules governing the Medicare benefits program can be taxing on its own. But regularly assessing what the Fifth Circuit aptly described as the "harrowing labyrinth," "byzantine four-stage administrative appeals process," and "logjam," that is the Medicare claim appeals process is another matter altogether. Certainly, the claim appeals process did not get those depictions for nothing; there is indeed a "redundant, time-consuming, and costly" hurdle involved in appealing claim denials. This hurdle is the "colossal" backlog at the Office of Medicare Hearings and Appeals (OMHA). See Family Rehab, Inc. 866 F.3d 496, 505 (5th Cir. 2018); Maxmed Healthcare, Inc. v. Price, 860 F.3d 335, 344-45 (5th Cir. 2017).
What is the OMHA Backlog Today?Currently, the third-level administrative review by OMHA of Medicare claims, where a provider or supplier is afforded an opportunity to have its appeal heard by an Administrative Law Judge (ALJ), has a 1,473 day average processing time delay for appeals adjudicated during the second quarter of FY 2020 (January 2020 – March 2020). This means it took four years from the time those claims were appealed to the ALJ level of review to be adjudicated and reach disposition. By statute, this process is supposed to take 90 days.
This backlog in the adjudication process can be a significant burden for providers and suppliers. Recoupment of the monetary amount at issue for claims arising from an initial determination under 42 C.F.R. § 405.920 begins after the reconsideration decision, or the second-level of administrative review. Providers and suppliers must pay back any remaining overpayment amounts for amounts that remain denied after the reconsideration decision. The overpayments are subject to the accrual of interest during the first two levels of administrative appeal. The interest rate is set by the Secretary of Treasury and charged by the Secretary of the Department of Health and Human Services (Department), which is currently 9 5/8 percent. If the overpayment is not repaid after the second level of appeal, the amounts are subject to recoupment and possible referral to the Department of Treasury for collection. As a result, some providers or suppliers with substantial or projected overpayments may be forced to shut down and/or face bankruptcy while waiting four years for possible relief at the ALJ level of review.
This has led to significant litigation against the Department to...
