President Barack Obama recently released the 2016 budget report, which includes three proposed courses of action to address the backlog of Administrative Law Judge (ALJ) hearings and improve the Medicare appeals process. An ALJ hearing is the third level of appeal available to providers who are appealing Recovery Audit Contractor (RAC) claim audits; the U.S. Department of Health & Human Services’ Office of Medicare Hearings and Appeals (OMHA) handles ALJ hearings for appealed claims.
- Invest new resources at all levels of appeal to increase adjudication capacity and implement new strategies to alleviate the current backlog
- Take administrative actions to reduce the number of pending appeals and prevent new cases from entering the system
- Propose legislative reforms that provide additional funding and new authorities to increase efficiency and address the volume of incoming appeals
The fiscal year (FY) 2016 budget request includes $36 million for the Centers for Medicare & Medicaid Services (CMS) to engage in discussion with providers to resolve disputes and additional funding for greater participation in ALJ hearings at OMHA. It also includes $270 million for OMHA, of which $140 million is in budget authority and $130 million is from legislative proposals. OMHA received over 600,000 claims in FY 2013 and close to 1,000,000 claims in FY 2014. The proposed budget will expand adjudicatory capacity in new field offices to address the backlog in the number of appeals and maintain the quality and accuracy of its decisions, and it includes a package of legislative proposals that provide new authority and additional funding to address the backlog.
The FY 2016 budget request also includes new investments in program integrity totaling $201 million in FY 2016 and $4.6 billion over ten years. These investments include continuing to fund the full Health Care Fraud and Abuse Control discretionary cap adjustment, increasing mandatory Medicaid Integrity Program funding, and providing more funding to RACs to undertake more corrective actions that will help reduce improper payments. The report said that program integrity investments in the budget will yield about $21.7 billion in savings to Medicare and Medicaid over ten years.