On August 26th, the Center for Medicare Advocacy filed a nationwide class action lawsuit against the Secretary of Health and Human Services. The complaint alleges that, as implemented, the Medicare administrative review process is in violation of Medicare statutory obligations and the Fifth Amendment’s Due Process Clause.[1]

Medicare’s administrative review process for claims appeals has four levels of administrative appeal within the Department of Health and Human Services (HHS). At the first two levels, the Centers for Medicare & Medicaid Services (CMS) administers reviews conducted by Medicare contractors.  The third level of review, administered by the Office of Medicare Hearings and Appeals (OMHA), is conducted by administrative law judges. Finally, the fourth level of review is with the Departmental Appeals Board. It is the third level review that is at issue in the Center for Medicare Advocacy’s suit.

Per the Medicare, Medicaid, and SCHIP Benefits and Improvement Act of 2000, dispositions at the administrative law judge level must be issued within 90 days of the date on which the request for a hearing is received.[2] The Center for Medicare Advocacy’s complaint alleges that, as of July 2014, the average length of time to a decision was 488.8 days—over five times the statutory limit. Speaking to the seriousness of the violation and the importance of timely administrative law judge review, the complaint also alleges that, at this stage, “denial of coverage is generally reversed at least half the time.”

The Center for Medicare Advocacy filed its lawsuit in the United States District Court for the District of Connecticut. Plaintiffs are seeking declaratory, injunctive, and mandamus relief. Notably, the lawsuit follows one filed in May through which the American Hospital Association, Arkansas’ Baxter Regional Medical Center, Tennessee’s Covenant Health, and Vermont’s Rutland Regional Medical Center are seeking mandamus relief to compel HHS to meet the same statutory timeframe.[3]

Rachel Landauer