On December 18, 2014, the U.S. District Court for the District of Columbia dismissed a lawsuit filed by the American Hospital Association (AHA) and others to compel the Secretary of HHS to process Medicare reimbursement administrative appeals in accordance with statutory timelines. 

Based on these statutory timelines, a Medicare provider’s appeal should pass through all four levels within a year or so.  However, due to a massive backlog at the Administrative Law Judge (ALJ) level caused in part by Recovery Audit Contractor (RAC) activity, providers have been forced to wait an average of sixteen months before even getting a hearing before an ALJ, and, in December 2013, were informed in a memorandum that the Office of Medicare Hearings and Appeals (OMHA) had suspended assigning new hearing requests to ALJs—a suspension expected to be in place for at least two years.

While acknowledging that HHS’s delay in processing administrative appeals was “far from ideal,” the Court found that the delay was “not so egregious as to warrant intervention.”  In reaching its decision, the Court applied a six-factor test, chief among them being the effect of expediting delayed action on agency activities of a higher or competing priority.  The Court ultimately concluded that Congress and HHS should fix the problem rather than the courts: “OMHA has been saddled with a workload it cannot, at present, possibly manage.  Congress is well aware of the problem, and Congress and the Secretary are the proper agents to solve it.  In such situations—where an agency is underfunded and where it is processing Plaintiffs’ appeals on a first-come, first-served basis—the Court will not intervene.”

In a statement on its website, the AHA expressed disagreement with the Court’s decision on the basis of “competing priorities” and stated that it “expect[s] to appeal the decision and will call upon the government to identify those priorities that trump providing hospitals with the necessary resources to provide essential care to the nation’s elderly and most vulnerable patients.”