Hospitals and healthcare providers that are denied or are dissatisfied with their Medicare reimbursement have a right to and often dispute their reimbursement in an administrative appeals process with varying levels. Although federal law in 42 U.S.C. 1395ff sets forth specific deadlines within which a decision must be rendered and the entire appeals process conducted and concluded (it is designed to be completed within one year), in reality, the backlog in Medicare appeals has created extraordinary delays that have left providers waiting for a decision for several years – well outside the required timeframe set by federal law.

Notably, in 2014, the American Hospital Association and three hospitals filed suit against the Secretary of Health and Human Services (“HHS”) – who is responsible for implementing and administering the Medicare program through the Centers for Medicare and Medicaid Services (“CMS”) – in order to compel HHS to act within the required timeframe in the third level of appeal before an Administrative Law Judge (“ALJ”). In December 2013, a moratorium was imposed that temporarily suspended the assignment of appeals at the ALJ level, creating an even larger backlog and greater delays. That lawsuit, case number 1:14-cv-00851, is still pending in the U.S. District Court for the District of Columbia.

Most recently, on November 3, 2017, CMS announced the availability of additional settlement options for providers in an effort to clear the ever-growing backlog of Medicare appeals. Providers with less than 500 Medicare Part A or Part B claim appeals pending at the third and fourth levels of appeal, with a total billed amount of $9,000 or less per appeal, may be eligible under the low volume appeals settlement option (LVA). Appeals eligible under the LVA option may be settled at 62% of the net allowed amount. In addition, the Settlement Conference Facilitation Process currently in place at the third level of appeal will be expanded. CMS’ announcement can be found here.

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