Many Providers Frozen by CMS’s ALJ Appeal Delay

Fallout from decision to not assign a judge to new audit appeals for two years felt across healthcare.

Providers are irate about CMS’ Office of Medicare Hearings and Appeals (OMHA) to delay assigning an Administrative Law Judge to any new audit appeals for two years, but they’re not the only ones. The OMHA move has received widespread criticism throughout the healthcare industry.

As providers of all types are mired in pre- and post-payment Medicare claims audits, the requirement to appeal has been pivotal given that so many audits are in error, and the various audits have significant overturn rates.

Moreover, the audits are so error prone, that they are part of the justification OMHA is using decision. There is a backlog of 357,000 claims going to appeal stacked up in the system, according to a letter from Nancy Griswold, OMHA’s chief judge. Prior to the delay announcement, the current turnaround for an appeal is 16 months.

Griswold’s other justification for the delay is that beneficiary appeals should be put to the head of that line and processed first.

The backlog is due to CMS’s radically revved up claims audits process, which over the past three years has resulted in appeals growing by 184 percent. Meanwhile, “the resources to adjudicate the appeals remained relatively constant” at 65 administrative law judges, Griswold wrote in a memo last month. While OMHA received 1,250 appeals a week in January 2012, it received more than 15,000 appeals a week by November 2013.

Already frustrated over CMS’s maddening audit process, and the already-lengthy audit process, many healthcare providers are criticizing the move. Some are saying CMS is even breaking the law.

“Delays of at least two years in granting an ALJ hearing for an appealed claim are not only unacceptable, they are a direct violation of Medicare statute that requires ALJs to issue a decision within 90 days of receiving the request for hearing,” American Hospital Association Executive Vice President Rick Pollack stated in a letter to CMS Administrator Marilyn Tavenner. “Further, this is not a new problem; prior to OMHA’s suspension of appeals assignments, ALJs were not adhering to their statutory deadline.”

Closer to home, those sentiments were reflected by HME industry audit expert, Wayne van Halem, CFE, AHFI, president of The van Halem Group LLC, which helps providers contend with Medicare claims audits.

“This is really frustrating,” van Halem stated. “The huge increase in the volume of appeals is a direct result of the significant increase in the number of audits being conducted. CMS keeps awarding lucrative contracts to private audit entities to find t's that aren't crossed and i's that aren't dotted, yet the beneficiaries clearly needed the services that were provided.

“Getting before an ALJ is generally the first time where reason enters the equation and we still see a large number of claims overturned, so providers should and will continue to fight,” he continued. “Rather than spend hundreds of millions of dollars to increase the volume of audits which subsequently increases the volume of appeals, why not spend some money on increasing staff and lessening the burden on the judges in the Office of Medicare Hearings and Appeals?”

OMHA will hold a meeting on Feb. 12 to discuss agency attempts to address the ALJ appeals backlog, and to discuss initiatives the office is undertaking to mitigate the current backlog as well as future appeal gluts.

About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on LinkedIn at and on Twitter at @postacutenews.

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