Tag Archives: Eighty Percent Rule

Hospitals Face Medicare Appeal Backlog Crisis

Part II — Attorney Adjudicators (AAs) Proposed to Help Administrative Law Judges (ALJs) handle Medicare Appeal Backlog Crisis

The backlog in appeals is so long that for all practical purposes the entire system has come to a halt. It has crashed. In Part I of this series we examined a few statistics behind the backlog. We noted that much of the appeals backlog can be explained by the astounding number of errors made by the audit contractors. In Part II we will examine the proposal to add a new role for Attorney Adjudicators (AAs) who can take over part of the Administrative Law Judge’s (ALJ) work during the appeals process. In Part III we will examine the proposal for bulk settlements based on a simple percentage of claims, but with no review of the claims themselves — the “Eighty Percent Rule”. In Part IV we will examine financial strategies being used by Hospitals to handle the massive impounding of their claim payments.

CMS recently published in the Federal Register(*) a proposal to relieve the burden on ALJs by adding a new class of persons to be called Attorney Adjudicators (AAs). As reviewed previously, the number of pending appeals now is more than 1,100,000 cases, and there are only 77 Administrative Law Judges. From 2009 until 2014, the number of requests for an ALJ hearing went up 1,222 percent! In 2014, each ALJ issued 1,048 decisions and 456 dismissals. There is a capacity for around 77,000 appeals per year, and that is expected to go up to 92,000 appeals per year by the end of 2016.  Still it is not enough. It does not take much math to realize there is a crisis.

OMHA has three strategies to address this backlog. First, try to get a larger budget; Second, “take administrative actions to reduce the number of pending appeals” (but we don’t know what these actions will be); Third, hire more adjudicators and “streamline” the appeals process.

Attorney Adjudicators

Another part of the proposed solution will involve Attorney Adjudicators. It is noted that “well-trained attorneys” should be able to do a number of things that today are done by the ALJ.  These include (1) performing reviews of the administrative record; or (2) drafting the appropriate orders.  Examples of orders that might be drafted by the AAs include (a) issuance of dismissals, (b) remanding appeals in order to obtain additional information needed for a decision, or (c) carrying out reviews of QIC dismissals.

The Attorney Adjudicator is defined as someone who is a licensed attorney “employed by OMHA having knowledge of Medicare coverage and payment laws and guidelines”.

Consideration also is being given to allowing AAs to decide cases that are submitted without a request for an oral hearing. This would allow the AAs instead of ALJs to issue decisions when it is not required that an ALJ conduct an oral hearing.

An AA decision would have the same authority as one issued by an ALJ. For example, it would be possible to reopen or appeal AA decisions, just as if they were issued by an ALJ. The time frames involved, escalation options or rights of appeal to the Medicare Appeals Council would remain the same. By the way, from no on, the Medicare Appeals Council is to be referred to only as “The Council”.

The proposal also includes a pathway for the AA to pass along a case to an ALJ.  Example: The parties have agreed to waive their right to an oral hearing. The AA reviews the case and concludes that an oral hearing may be needed in order to clarify some crucial issue in the case. The AA then can refer the matter to an ALJ asking them to determine if an oral hearing should be ordered.

In sum, the Attorney Adjudicator proposal takes several important parts of the appeals work that today is done through the ALJ and hands it over to non-judges who have authority to make a narrow range of decisions. Not much is known about whether or not any aspect of the appeals process as seen from the outside will change significantly.  We must assume that appeals would be submitted the same way, and under the same set of statutory guidelines for timing that now are impossible to fulfill.

In addition, it is not clear why the proposal is not simply to hire more ALJs instead of creating an even more complex process. It may be a case of simply hiring judge-like people on the cheap, or “outsourcing” part of the work of the ALJs so that they can focus more on complex matters.

The comment period for this change has recently expired, so we are waiting to see the outcome. Apparently several important provider associations opposed creation of Attorney Adjudicators.

In Part III we will examine the proposed “80% rule”, and in Part IV we will look at emerging financial bridge strategies being used by hospitals.

(*) See Federal Register 81(128):43790, July 5, 2016. See also comments by the American Bar Association here.

This was previously published in RACmonitor.