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Federal Court Orders HHS to Move forward on ALJ Backlog Solution

As Medicare’s backlog of appeals continue to increase and the hearing delays remain at a staggering average of 935 days, the D.C. federal court handed down a decision on September 19th to ramp up the pressure on HHS to solve the issue. The court hearing was prompted by a lawsuit filed by the American Hospital Association in which HHS had requested that the court put this litigation on hold until September 30, 2017.

The D.C. Court denied HHS’ request as the presiding judge declared, “The best medicine can sometimes be hard to swallow.” There was a great deal of compelling evidence within the ruling to justify urgent reforms as the delays average 935 days since, “Between fiscal years 2010 and 2014, the number of appeals filed at step three grew 936% – from 41,733 to 423,534.”

As these audits are overwhelmingly overturned, companies are facing the struggle of cash flow being withheld by the federal government. This creates a problem for patients and providers alike, as noted in the ruling, “Because of the consequent financial burden, some providers are ‘forced… to reduce costs, eliminate jobs, forgo services, and substantially scale back,’ all of which affects the quality and quantity of patient care.”

Although this was not a complete slam dunk as AHA ‘suggested the court simply order HHS to resolve each of the pending appeal by the statutorily prescribed deadlines’ was “wishful thinking” by the presiding judge, this will create a lot of pressure for HHS to find a better solution to the backlog than the efforts that have been largely ineffective thus far. While there are no additional concrete solutions that HHS has laid out to solve this ongoing problem, this ruling is a great win for the healthcare industry as providers are facing a constant barrage of audit troubles.