Appeals court ruling requires government to act on ALJ backlog

February 12, 2016
Medicare Web

by Steven Andrews

The government may finally have to comply with its congressionally mandated deadlines for reviewing claims at the Administrative Law Judge (ALJ) level after a federal appeals court this week reversed a lower court’s dismissal of a lawsuit brought by hospitals.

Decisions on cases argued before ALJs, the highest level of appeal, are supposed to be decided within 90 days, but the government has consistently failed to meet that mark. The average processing time for appeals decided in 2015 was 547 days. It’s only been getting worse, as decisions released by ALJs as of this month had been pending for an average of 572 days, according to the appeals court.

The American Hospital Association (AHA) and other hospitals brought a lawsuit against the Department of Health and Human Services (HHS) in May 2014 in an attempt to resolve the longstanding backlog. The AHA argued that hospitals have billions of dollars in claims being held up and HHS should find a way to stick with its deadlines and clear the backlog. When AHA filed the case, the government had a backlog of approximately 800,000 appeals, which would take more than a decade to resolve at its current pace of approximately 72,000 per year.

Claims at the ALJ level often involve high dollar amounts, and also add to the administrative burden for hospitals. Gathering the data from various departments to put together a case takes time and money for each organization in addition to the amount it is trying to recover from the claim.

Despite this, a U.S. district court dismissed the case in December 2014, claiming the delay was “far from ideal,” but not egregious enough for the court to intervene. The appeals court ruling sends the case back to the lower court, noting “our ultimate obligation is to enforce the law as Congress has written it.” The appeals court said the lower court should order HHS to comply with the deadline if the agency, along with Congress, cannot come up with “meaningful progress” on the issue by the end of the next appropriations cycle.