Most providers whose claims have been determined to be improper by the Recovery Audit Contractors (RACs) under the Medicare Recovery Audit Program have discovered that the appeals backlog “is incontrovertibly grotesque.” Two Courts of Appeals have recently acknowledged that the Office of Medicare Hearings and Appeals (OMHA) has a 10-year backlog of more than 800,000 appeals, but they have reached differing opinions on whether providers have a right to force the U.S. Department of Health and Human Services (HHS) to expedite their appeals if an administrative law judge fails to conduct a hearing and render a decision within 90 days, as provided under 42 U.S.C. § 1395ff(d)(1)(A).

The D.C. Circuit Court of Appeals in American Hospital Association, et al. v. Burwell, directed the district court to review complaints of systemic Medicare appeal delays in a case brought by the American Hospital Association and several hospitals individually and indicated that the district court could issue a writ of mandamus requiring HHS to assure that appeals are resolved within the applicable statutory time frames, if the court finds “compelling equitable grounds” favoring the hospitals. However, the D.C. Circuit also stated that if the “district court determines on remand that Congress and the Secretary [of HHS] are making significant progress toward a solution, it might conclude that issuing the writ is premature. If so, it could consider such action as ordering the agency to submit status reports updating the court on the level of appropriations, the progress of the AFIRM Act [S. 2368, the Audit & Appeal Fairness, Integrity, and Reforms in Medicare Act (AFIRM) of 2015], and any other relevant information.”

While the ultimate action of the district court in the American Hospital Association case may provide the relief long sought by providers, the Fourth Circuit reached the opposite conclusion in Cumberland County Hospital v. Burwell. While the Fourth Circuit likewise found the appeals backlog appalling, it held that judicial intervention was inappropriate to relieve the backlog because providers had the right to escalate appeals to the Departmental Appeals Board (DAB) and then to federal courts, if the appeal was not addressed within the statutory periods. The Fourth Circuit concluded that the escalation right for delays provided healthcare providers with an adequate alternative remedy and that judicial intervention would circumvent the comprehensive multi-level administrative appeals process included within the statute.

Providers should stay tuned to see how the D.C. district court acts on the remand, and (1) whether and how other courts intervene, and (2) whether the proposed AFIRM Act moves toward passage in Congress to avoid the threatened judicial intervention. In the meantime, hospitals are forced to provide care today and hopefully will see payment 10 years hence.