It’s a miracle! HHS has reduced the Medicare appeals backlog at the Administrative Law Judge (“ALJ”) level[1] by 75 %, which puts the department on track to clear the backlog by the end of the 2022 fiscal year. The department had 426,594 appeals bottlenecked on backlog. An audit from 2016 could get heard by an ALJ in 2021. However, movement has occurred.

According to the latest status report, HHS has 86,063 pending appeals remaining at the Office of Medicare Hearing and Appeals (“OMHA”).

In 2018, a federal Judge ruled in favor of the American Hospital Association (“AHA”) and its hospital Plaintiffs and Ordered HHS to eliminate the backlog of appeals by the end of FY 2022 and provided the department with a number of goals. According to the ruling, HHS had to reduce the backlog by 19 percent by the end of FY 2019, 49 percent by the end of FY 2020, and 75 percent by the end of FY 2021. Originally, the Order scheduled the timeframe for disseminating the backlog much shorter, but CMS claimed impossibility.

On another note, lately, I’ve seen a lot of supposed audit results based on local coverage determinations (“LCDs”) or policy manuals. This is unacceptable. In a January 4, 2022, decision from the NC Court of Appeals, the Court held that when a State agency implements an unpromulgated rule, the rule may not be enforced. Hendrixson v. Div. of Soc. Servs., 2022-NCCOA-10, ¶ 9. The Hendrixson case piggybacks the Supreme Court, which held that LCDs are unenforceable against providers. Azar v. Allina Health Services, 139 S. Ct. 1804, 204 L. Ed. 2d 139 (2019).

In Hendrixson v. Division of Social Services, the Court held that people eligible for Medicare Part B must apply and enroll and that if the applicant fails to enroll, Medicaid pays no portion of the costs for medical services that would have been covered by Medicare Part B, as you know Medicare Part B provides coverage for certain hospital outpatient services, physician services, and services not covered by Part A. See Bruton, 134 N.C. App. at 42, 516 S.E.2d at 635; 42 U.S.C. § 1395k (2019); 42 C.F.R. § 407.2 (2020). Enrollment in Medicare Part B is generally not automatic, see 42 C.F.R. §§ 407.4-407.40 (2020), and requires the patient to pay insurance premiums to enroll, after which the federal government pays most of the reasonable costs, with patients paying the remaining cost and an annual deductible. See Bruton, 134 N.C. App. at 42, 516 S.E.2d at 635; 42 U.S.C. §§ 1395l, 1395r-1395s (2019); 42 C.F.R. § 407.2 (2020). “Together, the part B premiums, deductibles and coinsurance are generally referred to as ‘Part B cost-sharing.’” Bruton, 134 N.C. App. at 42, 516 S.E.2d at 635. At your hospital or health care entity, do you have someone dedicated to properly enrolling consumers into Medicare Part B? If not, you may want to consider as a financial investment. Additionally, while you do not want to ignore the LCDs, the LCDs or Manuals cannot be a basis for any alleged recoupment or other sanction. As a general canon, any unpromulgated rule cannot be the basis of any penalty.

[1] The ALJ level is the third level in Medicare provider audits, but the first time that providers are allowed to present evidence to an independent tribunal.