The Centers for Medicare & Medicaid Services (CMS) recently issued a proposed rule to address the significant backlog resulting from “an unprecedented and sustained increase” in its Medicare appeals. According to CMS, the 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. Given the current backlog, the statutory 90-day limit for a decision at the Administrative Law Judge (ALJ) level (the third level of the administrative appeal process) is routinely ignored by OMHA – the current average wait time is more than five times this congressionally mandated time limit.

CMS has previously identified four primary drivers for the growth in Medicare appeals – (1) an increase in the number of beneficiaries; (2) updates and changes to Medicare and Medicaid coverage and payment rules; (3) growth in appeals from State Medicaid Agencies; and (4) national implementation of the Medicare Recovery Audit Contractor Program. Under current resources (and without any additional appeals), CMS projects it would take 11 years for OMHA and six years for the Medicare Appeals Council (MAC) (the fourth and highest level of the administrative appeal process before federal district court) to process their respective backlogs.

To learn more about the proposed rule and how it plans to address the Medicare appeals backlog, read the Reed Smith Client Alert written by Scot Hasselman and Rahul Narula here.