Medicare Payment Delays Are Congress’ Problem, Judge Rules

WASHINGTON (CN) - A federal judge sympathizes with hospitals that must wait as long as five years to be paid, but it's up to Congress to break the logjam in Medicare appeals, the judge ruled.

Medicare patients receive treatment, but the system is "log jammed" with appeals of claim denials, slowing the system to a crawl and forcing hospitals to absorb costs until claims can be rectified, the American Hospital Association claimed in its May 22 lawsuit against the Secretary of Health and Human Service.

Joined as plaintiffs by Baxter Regional Medical Center (Arkansas), Covenant Health (Tennessee) and Rutland Regional Medical Center (Vermont), the hospitals claim HHS delays "far exceed statutory timeframes" and are causing "severe harm" to hospitals that care for Medicare patients.

The hospitals say the four-step appeals process is supposed to take a year, but hospitals must wait 5 years, and possibly longer, to have their claims processed.

More than 480,000 claim appeals were awaiting assignment as of Feb. 12, with 15,000 new appeals filed each week, and an average wait of 16 months just to be heard, according to the complaint.

The plaintiffs blame, in part, the introduction of Medicare Recovery Audit Contractors, who receive a cut of any "improper" payments they recover and can challenge claims going back as far as three years.

The hospitals say the increase in appeals is the result of "over-auditing."

Another group of plaintiffs brought a separate lawsuit in 2012, alleging similar claims and seeking to compel then HHS Secretary Sylvia Matthews Burwell to speed up the process. In that lawsuit, the AHA and five hospitals sued HHS, seeking to compel it to process administrative appeals "in accordance with statutory timelines."

That challenge shifted throughout the course of litigation in reaction to interim rulings issued by the Centers for Medicare and Medicaid Services (CMS). The CMS then issued a final rule that superseded both the interim ruling and the proposed rule. The subsequent amended challenges all failed to show jurisdiction, according to U.S. District Judge Colleen Kollar-Kotelly, who granted Burwell's motion to dismiss in September this year.

"Ultimately, the court considered the plaintiffs' challenge as they have reframed it, in light of intervening events, challenging a general policy neither promulgated in CMS's recent rulemaking nor in the now-superseded interim ruling," Kollar-Kotelly wrote. "The court has no jurisdiction over this challenge."

In the new case, U.S. District Judge James Boasberg ruled on Dec. 18 that even if the court ordered it to do so, the HHS does not have the means to fix the problem.

"No one denies the OMHA [Office of Medicare Hearings and Appeals] and ALJs [Administrative Law Judges] are unable to render decisions in accord with the statutory guidelines laid out by Congress," Boasberg wrote. "No one denies that this a problem in need of a fix. This court, however, is not in a position to provide that fix. Although a superficial accounting might reveal a 2-2 tie among the factor groups, HHS's budgetary constraints, its competing priorities, and its incipient efforts to resolve the issue together dictate that mandamus is not warranted."

Boasberg said Congress is in a better position to do something about the problem.

"This conclusion is bolstered by the fact that Congress is aware of the situation and is in position to address the problem," Boasberg wrote. "The court hopes that the secretary and Congress will continue working together toward a solution and the OMHA will receive the resources necessary to fulfill its obligations. Hospitals that are owed reimbursement should not be indefinitely deprived of funds. The court cannot predict whether, over time, if HHS and Congress will adequately address the overflow of appeals ... in the meantime, they will have to wait along with everyone else."

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