News from OMHA Appellants Forum: Statistical Sampling Coming, Backlog Growing

Yesterday the HHS Office of Medicare Hearings and Appeals (OMHA) held a forum for appellants affected by its decision, which I blogged about last month, to hold off on assigning incoming appeals to ALJs while they work to clear a large backlog.  I was able to go, and enjoyed every minute.  This issue has received its share of attention in the news (Washington Post here, National Review online here), as well as controversy (see here and here), but I have not yet seen an article discussing some of the policy developments that came out of yesterday’s forum.  So I am going to play journalist for a minute, rather than academic, and share yesterday’s developments.  There were a lot of them:

1.  Statistical sampling: The OMHA is actively seeking ways to increase the number of appeals its ALJs can resolve without impacting quality.  They are going to be seeking public comment about ideas, and a prominent possibility they are currently exploring is the use of statistical sampling techniques, which they would do only with the appellant’s consent.  (See my last post on this issue for why I think this is a good idea.)  Putting on my academic hat for a minute, I worry that the consent point could be a stumbling block.  If you give appellants a strong carrot to consent–like the promise of a hearing in the statutorily-mandated 90 days–they might say they are being coerced to give up their due process rights, but if you don’t do that then you might not get enough providers participating.  I plan to post at some point about whether due process is even necessarily a constraint on how provider appeals are handled (as opposed to beneficiary appeals), but may wait to do that in the context of a more concrete proposal.

2.  Suspension or delay?  Chief Judge Griswold of the OMHA objected that the office has not actually suspended hearing new provider appeals, as was widely reported in January.  Rather, because the backlog means it won’t get to them for years anyway, it has only stopped assigning new appeals to ALJs until the ALJs work through their own queues.  From the OMHA’s perspective, and perhaps a legal perspective, the distinction is important.  It means that OMHA has not stopped doing its job: it is continuing to do its job (processing appeals) as fast as it can (in fact, faster than prior years), but OMHA has simply recognized that even at top speed it cannot match demand, and is candidly telling appellants that new appeals won’t be heard for at least two years.  (As of Jan. the delay had grown to 28 months, from 24 months in December.)  From an appellant’s perspective I am not sure the distinction matters: either way a provider’s appeal filed tomorrow won’t be decided for three years or so (28 months to hear, and then 6 months for a decision).

3. Inundated.  The reason OMHA stopped assigning new appeals to ALJs is intensely practical: the ALJs were literally overwhelmed with paper appeals.  They had no place to put them.  Conference rooms, offices, etc. were stacked to the walls at the field offices with appeals, and boxes of paper just kept pouring in at a growing rate every day.  It was literally making it hard for the ALJs and their staffs to function, so they are now holding the appeals at central docketing until the ALJs can dig their way out.

4. Electronic:  OMHA is en route to going electronic, but implementation is a year or more away.

5.  Appropriation:  OMHA has received an 18% increase in its appropriation, so will be hiring new staff in hopes of ramping up its processing capacity.

6.  Backlog not shrinking.  The appeals backlog is only growing (480,000 appeals and counting), and seems poised to continue to grow faster than OMHA can keep up, even with the boost in appropriations, at least for the immediate future. It is so bad that it now takes OMHA 15 weeks, just about the time the statute gives to resolve an appeal, to even open a provider’s letter requesting one.

7.  Flood washing into court?  The statute says that if a hearing is not held in 90 days, the appellant may escalate to the Medicare Appeals Council and then to district court.  The statutory timeframe seems completely out of reach for 2014, at least, so it is theoretically possible that appellants will escalate en masse, bringing the flood that is currently at the ALJ level into district court.  So far that seems unlikely, though; only a handful (6) of appellants have opted to go that route.

8.  Implications for access:  Several appellants at the forum said that their clients–mostly small hospital groups or durable medical equipment manufacturers–could go out of business if the hearing delays continue.  The pain they are feeling comes from a wrinkle in the appeals procedures: a provider gets to hold onto their Medicare payment while they proceed through the lower appeal levels, but must give it up while they await an ALJ hearing, notwithstanding the fact that some providers succeed before the ALJs at a rate of 50% or higher.  For a provider whose business leads to a lot of payment disputes about medical necessity–like a prosthetic or wheelchair manufacturer–this means that a huge portion of their revenue is being held up for years while they wait for an appeal.  Even if businesses do not actually shut down, that will ultimately impact access for patients by increasing provider costs and so making it unprofitable to treat the marginal patient (which may be a good thing or a bad thing depending on the size of the margins and whether the treatments stopped there are in fact medically necessary).

9.  Whose to blame?  My sense from appellants’ comments was that few blame OMHA for this mess.  Rather, most directed their frustration at the lower levels of the appeals process (run by private contractors on behalf of CMS), for failing to weed out meritorious appeals, or at the new audit programs for denying claims and, thereby, generating appeals in the first place.  That said, a representative from the American Coalition for Healthcare Claims Integrity did voice the concern that inconsistency among ALJ decisions is a source of the problem.  I have thoughts on this question–I think the real culprit is not a “who” but a “what”–but will hold off until I’ve really thought it through.

This is an interesting issue, both because of its implications for healthcare costs and access in the Medicare program and as a case study in administrative decisionmaking and design of adjudication.  I hope to follow developments as much as I can in this space

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