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ALJ Appeals Adjudication Backlog Update: AHA’s Lawsuit Decided in Favor of Appellants

Relief will (eventually) be granted to Medicare appellants.  After a years-long battle, on December 5, 2016, the U.S. District Court of the District of Columbia granted mandamus relief to the American Hospital Association (“AHA”) and its co-plaintiffs.

The Court requested that the parties propose actions the Secretary could take to address the backlog of pending appeals.  The AHA proposed three particular interventions, and, in the alternative, proposed a timetable by which the Secretary would be required to achieve reductions in the backlog.

The three proposed interventions included the following: (1) offer reasonable settlements to certain broad groups of providers and suppliers; (2) for some subset of disputed Medicare claims, defer providers’ duty to repay the Secretary and toll the accrual of interest on those claims awaiting adjudication beyond the statutory deadlines; and (3) impose financial penalties on Recovery Audit Contractors for high reversal rates by Administrative Law Judges (“ALJs”).

The Court noted its reluctance to prescribe the particulars of the Secretary’s backlog-reduction efforts, and instead substantially adopted the timetable for backlog reduction proposed by the AHA.  The AHA’s proposal was as follows:

  • 30% reduction from the current backlog of cases pending at the ALJ level by December 31, 2017;
  • 60% reduction from the current backlog of cases pending at the ALJ level by December 13, 2018;
  • 90% reduction from the current backlog of cases pending at the ALJ level by December 31, 2019;
  • Elimination of the backlog of cases pending at the ALJ level by December 31, 2020; and
  • Granting default judgment in favor of all claimants whose appeals have been pending at the ALJ level without a hearing for more than one calendar year on January 1, 2021.

In response, the Secretary argued that requiring default judgment for all appeals pending for over one year on January 1, 2021 would create “perverse incentives for providers and suppliers to appeal non-meritorious claims.”  The Court agreed that requiring default judgment raised concerns.  Therefore, the Court declined to adopt the AHA’s final proposal, and instead noted that if the Secretary failed to meet the deadlines, the plaintiffs could move for default judgment or to otherwise enforce the writ of mandamus.

The Court further ordered that the Secretary file quarterly status reports regarding its backlog-reduction efforts.

For information regarding Medicare appeals, contact Jessica L. Gustafson, Esq. or Abby Pendleton, Esq. at (248) 996-8510.

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