New Strategy to Diminish Medicare Appeals Backlog

Medicare has recently faced a greater amount of scrutiny related to an overwhelming amount of pending appeals.

According to a report from the US Department of Health and Human Services (HHS), Medicare processes approximately 1.2 billion fee-for-service claims per year, with 123 million claims per year originally denied. If a Medicare beneficiary or a healthcare provider does not agree with the coverage decision made, there is a 5-step appeals process, consisting of redetermination, reconsideration, Administrative Law Judge hearing, Medicare Appeals Council review, and judicial review in US District Court.

If an appeal is not resolved in the first step, the appeal moves on to the second, and so forth. At the end of fiscal year 2015, there was a backlog of approximately 884,017 appeals, with 14,874 appeals waiting to be reviewed in the third and fourth steps, according to the HHS.

There has been a 442% increase in appeals from 2010 to 2015, and this is a large factor in the large backlog, the report noted. Other factors include an increasing number of beneficiaries, changing coverage and payment rules, and the implementation of a fee-for-service recovery audit program.

With no additional appeals, it would take approximately 11 years for the backlog to be cleared.

The HHS proposed that it will:

• 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 encourage resolution of cases earlier in the process.
• Propose legislative reforms that provide additional funding and new authorities to address the appeals volume.

The HHS estimates that there will be 50% less appeals waiting on a decision in the third step of the appeals process by 2020 with their current strategy. With no action taken, the HHS estimates the backlog for these appeals would increase to almost 2 million.

However, with the new strategy, it is projected that the backlog will be completely cleared by 2020.