HHS Says Medicare Appeals Backlog Order Unworkable

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By Eric Topor

The HHS can’t meet court-ordered annual targets for the reduction of 658,000 backlogged Medicare claim appeals without obtaining more money from Congress, the agency said Dec. 15 ( Am. Hosp. Ass’n v. Burwell, D.D.C., No. 14-cv-851, reconsideration motion 12/16/16 ).

In a motion filed with the U.S. District Court for the District of Columbia, the HHS asked the court to reconsider its Dec. 5 ruling setting annual backlog reduction targets of 30, 60, 90 and 100 percent over the next four years. The HHS said it couldn’t hit those annual targets, starting at the end of 2017, without violating its “statutory obligation to protect the Medicare Trust Funds,” by paying nonmeritorious and even fraudulent Medicare claims.

The HHS made similar arguments before the court issued its Dec. 5 ruling, which were rejected in favor of the plaintiff American Hospital Association’s suggested four-year timetable. The agency asked the court once again to allow the HHS to resolve the backlog at its own discretion, pleading that the court’s ruling left it “caught between two statutory mandates that are incompatible” at its current level of resources.

In his Dec. 5 ruling, Judge James E. Boasberg scoffed at the HHS’s argument that the reduction time table would force the agency to violate Medicare law by paying nonmeritorius claims. Boasberg pointed out that the HHS was already violating the Medicare statute’s 90-day deadline for issuing rulings in ALJ appeals, and the “unacceptably high” level of backlogged claims necessitated some type of court action.

Nevertheless, the HHS said in its motion that the court’s order would result in a “manifest injustice.” Ellen Murray, Assistant Secretary for Financial Resources and Chief Financial Officer of the HHS, stated in an accompanying declaration that the agency “cannot reduce the backlog on the schedule that the Court has required” without violating its duty to protect the Medicare program.

Murray further said that "[a]bsent substantial new resources and authorities from Congress,” the HHS would have to settle backlogged Medicare claims “for the full value or nearly the full value of each appeal” regardless of merit, and it still might fall short of the annual reduction targets.

The AHA told Bloomberg BNA Dec. 16 it couldn’t comment on the motion at this time.

Hogan Lovells US LLP represents the AHA. The Department of Justice represents the government.

To contact the reporter on this story: Eric Topor in Washington at etopor@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com

For More Information

The HHS's motion is at http://src.bna.com/kO7.

The court's Dec. 5 ruling is at http://src.bna.com/kxG.

Murray's declaration is at http://src.bna.com/kPm.

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