Backlog of Medicare appeals spurs legal battle

The American Hospital Association plans to appeal a federal court ruling Thursday that said the government’s lengthy backlog of Medicare reimbursements is “not so egregious” to require legal intervention.

U.S. District Judge James Boasberg wrote in his decision Thursday that he “sympathizes with the plaintiff’s plight” as they await millions of dollars in a waiting game with the Department of Health and Human Services (HHS).

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But while he said that processing time is “far from ideal,” it did not justify action from the court that could be construed as judicial overstepping.

"No one denies that this is a problem in need of a fix. This Court, however, is not in a position to provide that fix," he wrote. The authority belongs to Congress, he said.

The American Hospital Association announced it planned to appeal the decision Friday, voicing frustration that the “the court itself recognizes that hospitals simply cannot afford to have billions of dollars that are needed for patient care tied up indefinitely in the appeals process.”

“We are extremely disappointed that a court entirely insulated from the devastating effects of multi-year delays in payments for medical care as a result of bureaucratic mismanagement would find in favor of the government,” the organization wrote in a statement Friday.

The American Hospital Association had sought to require HHS to act more quickly when processing Medicare appeals — a four-step administrative review laden with red tape.

The lawsuit was also filed by privately owned hospitals Baxter Regional Medical Center, Covenant Health, and Rutland Regional Medical Center, which have millions of dollars at stake in pending appeals.

The review should take about a year, government officials said. But the process has largely ground to a halt as administrative law judges saw their workloads increase fivefold between 2012 and 2013.

The Office of Medicare Hearings and Appeals is now receiving more appeals every month that it can handle in a year. It can take up to two years before it agrees to take on a new appeal.

Hospital officials argue that the process slowed dramatically when HHS began hiring private auditors, known as “recovery audit contractors,” to weed through appeals claims to find extra dollars.

The auditors are allowed to keep a cut of any “improper payment” they recover, which can be as old as three years.

The judge ruled that the extreme delay is not the same as the government’s “refusal to act,” and it doesn’t give the court reason to “meddle.”

“It makes little sense to force the Secretary to ask Congress for funding to solve a problem of which Congress is well aware. At best, that would be an empty gesture, at worst judicial overstepping,” the judge wrote.