HHS Seeks Help From Providers to Resolve Backlog of ALJ Appeals

If you were to appeal your denied claims to the administrative law judge (ALJ) level today, you would have to wait 515 days for a resolution as things currently stand at the Department of Health and Human Services (HHS) Office of Medicare Hearings and Appeals (OMHA), which administers the ALJ level of the appeals process. This lengthy backlog was revealed by Nancy J. Griswold, the chief administrative law judge at OMHA, during an Oct. 29 Medicare Appellant Forum hosted by OMHA. Griswold also shared other statistics designed to help providers understand the extent of the backlog and extreme delays in adjudicating claims at the ALJ level. According to presentation materials for the forum, the agency is currently entering requests for ALJ hearings from July 2014 into their computer tracking system. OMHA is assigning cases to ALJs from the third quarter of fiscal year 2013 with 59,000 still to go. These are pretty grim statistics for any laboratory or other provider that currently has appeals in the system awaiting assignment to an ALJ. What Caused the Problem OMHA has experienced a recent significant and sustained increase in the number of denials and associated appeals that reach the ALJ level. The office was overwhelmed by the increase and could not meet the legally mandated 90-day time frame for resolution of these appeals. According to forum presentations, the number of denied claims and appeals started increasing significantly in fiscal year 2012, when it received 117,068 appeals requests, almost double the number received the previous fiscal year. As of June 2014, OMHA had already received 395,000 requests for the year. It is easy to see that this is not a simple problem, and it will take a monumental effort and cooperative commitment of resources to resolve. Forum participants cited several reasons for the increase in requests for ALJ-level appeals. One of the main reasons is the cumulative effect of all of the post-payment audit programs, such as the recovery audit program, referred to as the RAC program, and Zone Program Integrity Contractors. Provider experience with these programs is generally perceived as negative. Providers are typically dissatisfied with the first two levels of the appeals process. These first levels are operated or supported entirely by CMS and its contractors, and rulings often uphold the original denial. It is not until a provider reaches the ALJ level of appeal that it gets an opinion from someone not directly involved in the results of the appeals. CMS statistics tend to confirm this, pointing to a much higher probability of getting a favorable decision at the ALJ level. Word travels fast in the provider community, and it didn’t take providers long to reach the conclusion that they would have to escalate their appeals to that level to get a perceived fair and impartial review. Coincidentally, the ALJ level is the first opportunity an appellant has to interact directly with the person adjudicating their appeals. Apparently, the faceless and impersonal nature of the lower levels of appeal create the perception that the adjudicators are not really hearing the arguments that support the provider’s appeal. Other reasons cited for the increase in denials and appeals include more active state Medicaid agencies and audit efforts and an increase in the base workload for which OMHA is responsible. Another reason for the increase is that CMS has implemented changes to monitor claim accuracy that have resulted in increased denials and appeals of those denials. As part of this effort, Medicare Administrative Contractors have initiated a series of focused medical reviews, further contributing to the increase in denials and appeals. What Are OMHA and HHS Doing About the Problem? HHS plans to expand OMHA’s adjudication capacity through budget increases that will allow the division to open more field offices and hire additional people to adjudicate claims. There are also a number of computer and technology improvements being made that should facilitate the appeals process. One system under development is known as the ALJ Appeal Status Information System Web site, or AASIS. This will enhance both OMHA’s and providers’ abilities to track the progress of appeals. AASIS is not expected until the end of 2015. Another technology tool is the Electronic Case Adjudication and Processing Environment (ESCAPE). The ESCAPE system will have the capability to handle such things as case intake and assignment and workflow management. It will also allow for the sharing of files and case records between adjudicators. Unfortunately, phase I of ESCAPE is not expected to be up and running until the summer of 2015 at the earliest. The final phase of the ESCAPE program is not expected until November 2016. OMHA has launched some pilot projects such as using statistical sampling to help appellants address large volumes of appeals, as well as the settlement conference facilitation pilot program. To date, neither of these pilots has been successful, but OMHA continues to tweak them in the hopes that they will provide a partial solution to the problem. CMS Seeking Help From Provider Community In a Nov. 5 Federal Register information request, CMS is seeking input from the provider community for ideas to help with the problem. According to the information request, OMHA wants input on its current initiatives designed to help resolve the problems. It is also specifically seeking input or asking questions on the following topics:

• Are there suggestions to improve the current initiatives OMHA is undertaking?
• Are there other suggestions outside of the initiatives currently under development?
• Are there any regulations that might be affecting the ability of OMHA to resolve the problem that could be revised to streamline the adjudication process that ensures opportunities for provider participation in the process?

Any suggestions for the first two bullets must comply with current statutory authorities and requirements, according to the notice. Comments are due by 5 p.m. Eastern time on Dec. 5, less than a month from the publication of this article. Tips for Laboratory Providers This problem will not be resolved easily nor in any reasonably short time frame. Obviously, the best tip is to avoid submitting claims that are sure to be denied whenever possible. This can be partly accomplished through better training of employees and ordering providers. Using tools such as process improvement techniques and the use of data to identify claims denial issues and prioritize the use of limited resources should help. If denials occur, laboratories must become more familiar with the first two levels in the appeals process and make every effort to get their denial appeals resolved within those appeal levels. There is no real benefit to appealing claims if the resolution is so far in the future that it will make little difference to the laboratory financially. Finally, participate in OMHA’s efforts to resolve the problem by attending any programs they provide, following their efforts to resolve the problem, and commenting on the problem when asked by the government. Takeaway: Laboratories need to make a concerted effort to submit clean claims and learn the ins and outs of the first two levels of the appeals process or wait nearly two years for their denial appeals to be resolved.