Appeals court revives lawsuit over ALJ delays

A federal appeals court today reversed a lower court’s dismissal of a lawsuit brought by the AHA and several hospitals, which sought to compel the Department of Health and Human Services to meet its congressionally mandated deadlines for reviewing Medicare claims denials. Saying that the backlog of delays has gotten “worse, not better,” the appeals court sent the case back to the lower court, noting that, “in all likelihood,” the lower court should order the administration to comply with the appeals deadlines if HHS or Congress fails to make meaningful progress toward solving the problem within a reasonable period of time, pointing to the close of the next appropriations cycle as the deadline for resolution. The AHA and several hospitals sued HHS in May 2014 over the backlog at the administrative law judge level, the third levels of appeals. An ALJ has 90 days to decide an appeal. “The appeals court today affirms that hospitals simply cannot afford to have billions of dollars that are needed for patient care tied up indefinitely in the appeals process,” said Melinda Hatton, AHA senior vice president and general counsel. “Today’s decision confirms that the agency has a clear duty to comply with the congressionally mandated deadlines and that the statute gives hospitals a corresponding right to demand compliance. And, it refutes attempts by the agency to excuse compliance because of the Recovery Audit Contractor program, noting that congressional mandates trump discretionary decisions.”