The Department of Health and Human Services (HHS) has issued a proposed rule intended to address the significant backlog resulting from “an unprecedented and sustained increase” in Medicare appeals.  According to HHS, its Office of Medicare Hearings and Appeals (OMHA) had more than 750,000 pending appeals as of April 30, 2016, while it has only an adjudication capacity of 77,000 appeals per year.  This proposed rule comes following criticism from various branches of the federal government regarding the delay in processing Medicare appeals, including a recent Government Accountability Office Report (GAO-16-366) identifying opportunities to improve the appeals process; the D.C. Circuit Court of Appeals’ recent reversal and remand in American Hospital Association v. Burwell, 812 F.3d 183, 185 (D.C. Cir. 2016); and a Senate Finance Committee hearing in April 2015.

The proposed rule includes a series of reforms to speed the appeals process, including a provision to expand OMHA’s adjudicator pool by allowing OMHA to reassign a portion of its workload to non-Administrative Law Judge adjudicators.  Specifically, the proposed rule would allow attorney adjudicators to issue decisions when an appellant decides it does not want a hearing or withdraws his or her request for an ALJ hearing.  Decisions by attorney adjudicators can be reopened or appealed the same as if the ALJ made the decision.

In addition, to provide more consistency in appeals decisions at all levels of appeals, the proposed rule would designate select Medicare Appeals Council (MAC) decisions as precedential and binding on CMS and its contractors in making initial determinations, redeterminations, and reconsiderations.  CMS would provide appellants a public listing of such final precedential decisions in order for appellant to evaluate whether to move forward with the appeals process.  While certain precedential decisions may curb inconsistent ALJ decisions, it will be important to monitor how and if Medicare contractors properly implement such precedential decisions.  In circumstances in which a precedential decision would apply to a factual question, CMS explains in the proposed rule that the “decision would be binding where the relevant facts are the same and evidence is presented that the underlying factual circumstances have not changed” since the MAC issued the precedential decision.  CMS further explains that “many claim appeals turn on evidence of a beneficiary’s condition or care at the time discrete items or services are furnished,” and therefore the proposed rule on precedential decisions “is unlikely to apply to findings of fact in these appeals.”

Other policies in the proposed rule seek to create procedural efficiencies, limit proceedings in which CMS or its contractors can participate, revise the amount in controversy threshold, and clarify regulatory language and timeframes.  In a blog post announcing the release of the rule, Chief Administrative Law Judge Nancy Griswold and Departmental Appeals Board Chair Constance B. Tobias note that the President’s FY 2017 proposed budget requests additional funding and legislative reforms to facilitate appeals processing and encourage resolution of appeals earlier in the process.  Even if Congress grants the Administration’s requests, however, Griswold and Tobias acknowledge that the backlog of appeals still would not be eliminated before FY 2021.

Comments on the rule will be accepted until August 29, 2016.