AHA Calls Suspension of RAC Appeals 'Violation' of Law

The suspension of appeals of Medicare claims overturned by federal recovery audit contractors (RACs) has the American Hospital Association crying foul. Can a lawsuit be far behind?

Earlier this month the Office of Medicare Hearings and Appeals announced that it would suspend appeals from healthcare providers over RAC denials for at least two years. The number of appeals, which are made to Administrative Law Judges (ALJs), have dramatically increased in recent years and currently there are several hundred thousand appeals awaiting a hearing.

“Due to the rapid and overwhelming increase in claims appeals, effective July 15, 2013, OMHA temporarily suspended the assignment of most new requests for an Administrative Law Judge hearing to allow OMHA to adjudicate appeals involving almost 375,000 claims for Medicare services and entitlements,” wrote Nancy Griswold, chief administrative law judge. However according to OMHA’s website, the cessation of new hearings has been backdated to April 1, 2013, which means the more than 600,000 appeals already filed will not be scheduled for a hearing for minimum of two years.

The AHA already is suing the Centers for Medicare and Medicaid Services over its policy preventing hospitals from resubmitting RAC-denied claims for Part A under Part B. In August CMS announced that it will allow services denied under Part A to be resubmitted on a limited basis, but the lawsuit is still working its way through the Washington, D.C. District Court. While the organization has not announced what action it will take, if any, it has responded to the ALJ delays.

AHA’s response

“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,” AHA Executive Vice President Rick Pollack wrote last week in a letter to CMS Administrator Marilyn Tavenner. The reason the ALGs have been besieged by appeals lies with the RACs, he wrote. “Excessive inappropriate denials by Medicare Recovery Audit Contractors (RACs) are a direct driver of the ALJ backlog. Hospitals have been put in an untenable position in which the nearly unfettered ability of RACs to churn out erroneous denials forces them to pursue appeals in order to receive payment for medically necessary care, while the inability of OMHA to manage the appeals process within the timeframes required by the Social Security Act holds that payment hostage.”

Below is the latest information on appeal timelines from the OMHA website:

Adjudication Timeframes

Although OMHA is processing a record number of Medicare appeals, we continue to receive more requests for hearing than our Administrative Law Judges can adjudicate in a timely manner. OMHA remains committed to processing requests for hearing in the order received as quickly as possible given pending requests and adjudicatory resources. We will continue to process Part D prescription drug denial cases that qualify for expedited status within 10 days and will screen all incoming requests to ensure Medicare beneficiary issues are prioritized given that they often present emergent circumstances that must be promptly addressed. In all other circumstances, you (or your representative) will receive an Acknowledgement of Request letter when your request is docketed.

Due to record receipt levels, we are currently projecting an 18 to 22 week delay in entering (“docketing”) new requests into our case processing system. If 22 weeks have not lapsed since you submitted your Request for Hearing, do not resubmit your request.

Based on our current workload and volume of new requests, we anticipate that assignment of your request for hearing to an Administrative Law Judge may be delayed for up to 28 months.

The average processing time for appeals decided in fiscal year 2014 is 321.6 days.

Requests Submitted After April 1, 2013 — Deferred Assignment Filing Alert for Requests and Additional Documentation

Deferred Assignment

Due to the overwhelming number of receipts and the existing workload within the Agency, OMHA implemented a program that defers the assignment of most requests for hearing received after April 1, 2013. Under this new docketing process, new requests for hearing will be entered into our case processing system, then held until they can be accommodated on an Administrative Law Judge’s docket for adjudication.

Due to the volume of requests that we are receiving, there are significant delays in assigning requests at this time. When your request is assigned to an Administrative Law Judge, we will send you a Notice of Assignment. Based on our current workload and volume of new requests, we anticipate that assignment of your request for hearing to an Administrative Law Judge may be delayed for up to 28 months.

Please note that we will continue to process Part D prescription drug denial cases that qualify for expedited status within 10 days and will screen all incoming requests to ensure Medicare beneficiary issues are prioritized given that they often present emergent circumstances that must be promptly addressed.

Filing Instructions Alert To OMHA Appellants

OMHA receives all previously submitted medical records and other documentary evidence from the Medicare contractor that conducted the decision that you are appealing (or from the Social security Administration, if it conducted the decision being appealed).

In order to manage the volume of appeals we are receiving, we ask that you please do the following:

Do not attach medical records or other documentary evidence to your request for Administrative Law Judge (ALJ) hearing. Please limit your submission to the Request for ALJ hearing itself. See the “When to Submit Your Evidence” section below for instructions on how and when to submit additional evidence.
Clearly list the Medicare Appeal Number for the Reconsideration you are appealing on your Request for ALJ hearing form. This number will appear in the upper right-hand corner of the reconsideration decision letter in the following format, e.g. 1-1234567890. Alternatively, please include a copy of the first page of your reconsideration decision.
If you are appealing a reconsideration issued by a Qualified Independent Contractor (QIC), DO NOT submit a courtesy copy of your request for ALJ hearing to the QIC that issued your reconsideration or to the Medicare Administrative Contractor (MAC) who issued your redetermination. Neither the QIC nor the MAC require a copy for the purposes of 42 CFR § 405.1014(b)(2).
Do not re-submit medical records or other documentary evidence you already submitted earlier in the claim submission or to another level of appeal. When you request an ALJ hearing, OMHA coordinates directly with the prior level of appeal to obtain the administrative record, which includes everything you already submitted. Duplicate evidence will not be considered.

When To Submit Additional Evidence or Briefs

If you submit additional documentation (for example, additional evidence or briefs in support of coverage) to OMHA Central Operations after you file your request, but before the case is assigned to an ALJ, OMHA Central Operations willreturn the materials to you. OMHA Central Operations is devoting all resources to processing requests for hearing and cannot accommodate coordinating the additional materials at this time. You will have an opportunity to submit the additional materials after your case is assigned to an ALJ.
When your request for hearing is assigned to an ALJ, we will send you a Notice of Assignment. This notice will reflect the name and address of the ALJ assigned to your case. If you would like to submit additional evidence related to your appeal, you should submit it after assignment directly to your assigned ALJ using the name and address referenced on this notice. Alternatively, you may submit your evidence directly to the ALJ within ten calendar days of receipt of the Notice of Hearing.

Special instruction for providers or suppliers: if you are submitting new evidence to the ALJ that was not previously submitted at any prior level of appeal, the evidence must be accompanied by a statement explaining why the evidence was not previously submitted. See 42 CFR § 405.1018. The ALJ will then examine any new evidence to determine whether there is good cause to submit the evidence for the first time at the ALJ level. 42 CFR § 405.1028.

Escalation Rights

If you are appealing a Part A or Part B reconsideration issued by a Qualified Independent Contractor (QIC), you may have a right to escalate your request for hearing to the Medicare Appeals Council (MAC), 90 days after you file a complete request for hearing. More information on escalating a request for hearing can be found at 42 C.F.R. sections 405.1104 and 405.1106(b). When a request for hearing is escalated, the MAC may take any action in accordance with 42 C.F.R. section 405.1108(d), but is not required to conduct a hearing.

Escalating a request for hearing is a two-step process. See In re General Medicine, P.C. (MAC Sep. 6, 2007). To initiate the process, you must file a written request for escalation with OMHA. If your request has been assigned to an Administrative Law Judge, please file your request with the Administrative Law Judge’s field office. Please clearly indicate your submission as an escalation request to help us process your request as quickly as possible. Our field office addresses can be found athttp://www.hhs.gov/omha/contacts/offices.html.

If your request has not been assigned to an Administrative Law Judge, please file your request for escalation with:

OMHA — Central Operations
Attn: Escalation Request Mailstop
200 Public Square, Suite 1260
Cleveland, OH 44114

After OMHA receives your initial request for escalation, you may receive a decision, dismissal, remand order, or a Notice on Escalation Request. However, if you do not hear from us within 10 days (including 5 days for mailing time), you may consider your request escalated and proceed to seek MAC review of the escalated request. The request for MAC review must:

Contain the required content for a request for review of an escalated case set forth in 42 C.F.R. section 405.1112;
Be sent to both the MAC and the Administrative Law Judge’s OMHA office (or OMHA Central Operations if you sent your request for escalation there); and
Be copied to the other parties to the appeal (for example, the parties who received a copy of the Notice of Reconsideration).

Please note that if you do not request MAC review of an escalated request, the case will remain pending with OMHA and the Administrative Law Judge adjudication process will continue.