On December 18, Judge James Boasberg in the U.S. District Court for the District of Columbia granted a motion to dismiss the lawsuit that was filed by the American Hospital Association (AHA) to force the government to adhere to statutory deadlines for ruling on Recovery Audit Contractor (RAC) decisions that were appealed.
The administrative law judge (ALJ) hearing is the third level of the Medicare claim appeal process, and ALJs have been overwhelmed with a backlog of hundreds of thousands of appeals. This backlog has since compelled the Office of Medicare Hearings and Appeals (OMHA) to stop taking more appeals for two years or more. Thus, AHA filed suit.
Boasberg accepted a government request to dismiss the lawsuit, but acknowledged that “no one likes the waiting game and Plaintiffs in this case are no exception.” He further stated, “While the Court sympathizes with Plaintiffs’ plight, for the time being the waiting game must go on. HHS’s delay in processing their administrative appeals, while far from ideal, is not so egregious as to warrant intervention.”
According to the AHA, it is the RACs’ over-auditing that has backed up the appeal process: “As Medicare’s only contingency-fee-based contractors, RACs have engaged in wide-ranging audits of Medicare claims, frequently questioning the medical judgment of health care providers and denying claims for the types of services that qualify for the largest amount of reimbursement.”
Boasberg noted that OMHA does not deny that RACs contributed to increased appeals, but OMHA also says that more Medicare beneficiaries, increased use of covered services, and additional appeals from Medicaid agencies also contributed.
In his ruling, Boasberg said Congress created the RAC program and it is Congress and HHS who should address the problem. “In the end, here is the state of affairs: Congress is well aware of the problem and Congress and the [HHS] 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.”
The AHA released a statement that it disagrees with the court’s decision and expects to file an appeal.
Editor’s note: This story was adapted from materials provided by Modern Healthcare.