Medicare Appeals System Crashing

A new report(*) by the U.S. Government Accountability Office (GAO), shows that the Medicare Appeals system is crashing because the number of appeals filed exceeds the capacity of the Administrative Law system.  The number of cases filed has exploded, but there has been inadequate improvement in capacity.

Levels of Appeals

There are four levels of appeals.

Level 1 – Medicare Administrative Contractors (MACs)

Level 2 – Qualified Independent contractors (QICs)

Level 3 – Administrative Law Judges (ALJs)

Level 4 – Medicare Appeals Council (MAC)

Number Appeals Rising

For the period 2010 -2014, there has been a substantial growth in appeals.  Here is the data:

Level 1     +62%

Level 2    +238%

Level 3    +936% <— look at that number!

Level 4    +267%

The greatest increase in appeals has taken place in that place where the appeal is the most complicated: Appeals to Administrative Law Judges (ALJs) increased by almost 1,000 percent.

This data indicates that providers increasing are dis-satisfied with the results of their audit. They are more likely to appeal. Also, they are considerably less satisfied with the decisions of the QICs.

So this places an incredible burden at the ALJ level. The +936% increase at Level 3 (ALJ) represents a change from 41,733 appeals in 2010 to 432,534 appeals filed in 2014.

ALJ Time/Appeal

An Administrative Law Judge (ALJ) gets the same benefits as other Federal Employees. Each year they get 26 vacation days, and 10 holidays. This leaves 329 working days per year for them to do their work.

The maximum number of cases recommended per month for an ALJ is 60, but the average is much lower.

At 60 hearings/month, taking into account the number of holidays, that is approximately 2.2 hearings per day for an ALJ.

There are 77 ALJs and this should lead to a total of 168 hearings/day; and 55,474 hearings/year.

If the number of appeals has risen to 432,534 hearings per year, and each gets a hearing, and the ALJs are working at the unrealistic maximum rate of 60 hearings per month, then in order to meet this new load, a minimum of 599 ALJs need to be on the job.

That is ten times the number of ALJs needed.

But this number assumes a sustained rate of 60 hearings per month, and that is unrealistic.  A better number is 45 hearings per month.

If this number is used, then 821 ALJs are needed, based only only the 2014 data, which already is obsolete, as the number is increasing.



(*) See U.S. Government Accountability Office, Medicare Fee-for-Service: Opportunities Remain to Improve Appeals Process, May, 2016, 88 pps., Document number GAO-16-366.