Backlog to the Future? Part 3

Home care agencies who have received additional development requests (ADRs) are experiencing an ever-increasing ALJ backlog. The following is the final part of a 3-part series on the current state of ADRs and the ALJ backlog. Access: PART 1 and PART 2.

As with the FY 2018 budget request there are also some other proposed items of interest. Legislative proposals are found under “Proposed Law – Improving the Medicare Appeals Process” to improve the Medicare appeals process. These include the proposals below:

1 – Provide Additional Resources for Medicare Appeals

This proposal would provide the Office of Medicare Hearings and Appeals (OMHA) and the Departmental Appeals Board (DAB) mandatory funding to address the backlog of pending appeals. The Secretary is authorized to transfer funding across levels 3 and 4 of the appeals system.

2 – Remand Appeals to the Redetermination Level with the Introduction of New Evidence

This proposal would remand an appeal to the first level of appeal when new documentary evidence is submitted into the administrative record at the second level of appeal or above. Exceptions may be made if evidence was provided to the lower level adjudicator but erroneously omitted from the record. Another exception may occur if an adjudicator denies an appeal on a new and different basis than earlier determinations. This proposal incentivizes appellants to include all evidence early in the appeals process. It also ensures the same record is reviewed and considered at subsequent levels of appeal.

3 – Increase Minimum Amount in Controversy for ALJ Adjudication of Claims to Equal Amount Required for Judicial Review

This proposal increases the minimum amount in controversy required for adjudication by an ALJ to the Federal District Court amount in controversy requirement ($1,600 in calendar year 2018 and updated annually). This would allow the amount at issue to better align with the amount spent to adjudicate the claim. Appeals not reaching the minimum amount in controversy would be adjudicated by a Medicare magistrate.

4 – Establish Magistrate Adjudication for Claims with Amount in Controversy Below New ALJ Amount in Controversy Threshold

As described above, this proposal allows OMHA to use Medicare magistrates for appealed claims below the Federal District Court amount in controversy threshold ($1,600 in calendar year 2018 and updated annually), reserving ALJs to conduct hearings and create the record on appeal in cases which have a higher amount in controversy and can reach Federal court.

5 – Expedite Procedures for Claims with No Material Fact in Dispute

This proposal allows OMHA to issue decisions without holding a hearing if there is no material fact in dispute. These cases would include appeals, for example, in which Medicare does not cover the cost of a particular drug or the ALJ cannot find in favor of an appellant due to binding limits on authority.

6 – Change the Medicare Appeal Council’s Standard of Review

Change the Medicare Appeals Council’s standard of review under Section 1869(d)(2)(B) of the Social Security Act from de novo to an appellate-level standard of review. Under the proposed standard of review, the Council would be able to grant a request for review of a decision by an ALJ or other adjudicator of Medicare claims if:

  • There is an abuse of discretion
  • There is an error of law material to the outcome of the case
  • The findings of fact are not supported by substantial evidence
  • There is a need to clarify an important question of law, policy, or fact.

The proposal would also clarify that the Council may deny a request for review.

7 – Limit Appeals When No Documentation is Submitted

Limit the right to appeal a redetermination of a claim denied because no documentation was submitted to support the items or services billed, unless the appeal was filed by a beneficiary who is financially responsible for the items or services. If the necessary documentation is not submitted to the Qualified Independent Contractor (QIC) at Level 2, the request for reconsideration would be dismissed.

8 – Require a Good-Faith Attestation on All Appeals

Require all appellants to include in their appeal an attestation that they are submitting the appeal under a good-faith belief that they are entitled to Medicare reimbursement. This proposal would also provide the Secretary the authority to sanction or impose civil monetary penalties on appellants who are found to be submitting appeals not in good-faith. Appellants would be provided a right to challenge a sanction through an administrative review or judicial review. The Secretary would be provided the authority to establish criteria for determining when an appellant is not filing in good faith and associated remedies through regulation.

9 – Establish a Post-Adjudication User Fee for Unfavorable Appellants at the 3rd and 4th Levels of Appeal

This proposal would establish a post-adjudication user fee for Medicare Parts A and B claim appeals filed by a provider or supplier, or a State Medicaid Agency (SMA), with respect to appeals that are unfavorable to the appellant (that is, the outcome did not change from the prior level of appeal), and for appeals that are dismissed. The user fee could be waived by the Secretary if the appealed claim were resolved through settlement or alternate dispute resolution. The purpose of post-adjudication user fee is to improve the responsiveness of the appeals process by reinvesting funds (e.g., hiring more staff to increase the number of appeals completed and decrease the length of time for review). Other purposes include to partially offset the government’s costs of processing appeals and to encourage appellants to more carefully assess the merits of their appeals.

The User Fee and the Good-Faith Attestation

The user fee and the good-faith attestation are troubling items, in that on top of the delays in appealing, if an unsuccessful outcome at a hearing that an additional charge applies. With the high levels of denial (or poor rate of favorable) at both prior levels of appeals, claims basically need to need to make it to a hearing to have a realistic chance for overturning the denial. Adding on a fee if unsuccessful presumes the appeal is frivolous or punitive, while frivolous or improper denials by review contractors have no penalties assigned to them. As for the offset of the cost of appeals, the budget request more than doubles the amount that OMHA is allotted to conduct its business.

Appeals (ADRs and the ALJ Backlog)

Appeals could be construed as meritless, except that when given their day in court, appellants are still successful at over 50%, and far higher than MAC/QIC results.

So where is the “meritless” coming from? Once you remove Dismissals, Appeal Statistics for FY 2018 are 44.4% fully favorable with Claim Statistics 46.9% fully favorable. (add in another 2.6% appeals partially favorable and 15.8% claims partially favorable). If the MACs and QICs wrong half the time–where are these “meritless” appeals? The good-faith attestation is also an issue: what purpose does it serve? The presumption is, and should be, that the appellant asserts a good-faith right to payment of the appealed claim with the reasons stated in the appeal. An attestation of same may serve to discourage or intimidate some appellants from filing hearing requests.

Unless there are some significant settlements, a continued high level of dismissals, or another settlement offer it is unclear how the backlog clearance rate will meet the judge’s order. The possibility of an expanded number of appeals due to non-affirmed pre-claim reviews in Review Choice Demonstration states, coupled with the higher volume of claims due to Patient-Driven Groupings Model (PDGM) in 2020 just adds more to the current backlog even as all the efforts are made to reduce it.

The end result of all this? An ALJ hearing backlog into the future.

 -Joe Osentoski, BAS, RN-BC, QIRT Director of Reimbursement Recovery and Appeals.

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QIRT ADR services are considered the best in the industry.

Joe Osentoski, BAS, RN-BC, is based in QIRT’s Troy, Michigan office. Joe specializes in additional documentation request (ADR) response and appeals and has been a registered nurse for more than 25 years. Joe’s career has included clinical consulting in home health and hospice, with a specialty in clinical quality assurance and regulatory compliance. He also has extensive experience with multiple types of Medicare audits, probes, and reviews from all types of Medicare contractors: MACs, UPICs,RAC, SMRC, OIG, CERT, and Medicare Advantage, as well as private insurers.  Joe has completed over 5,000 ADRs in home care and hospice, filed thousands of appeals, and represented agencies in hundreds of administrative law judge (ALJ) hearings. 

Impressively, Joe has been lauded by retired US Administrative Law Judge Robert Soltis in his book, How to Handle Your Medicare Hearing: “Mr. Osentoski was one of the first non-attorney representatives to appear before me when I was an ALJ, and he stands head and shoulders above every other non-attorney representative. Mr. Osentoski…knows home health law, and prepares thoroughly. His credibility is beyond reproach.”

Joe is most recently the author of Home Health ADR & Appeals Answers, First Edition, available through DecisionHealth. He also is a contributor to Home Health Line and Eli’s Home Care Week. He holds a gerontological nursing certification from the American Nursing Credentialing Center. 

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