The Senate Finance Committee has approved a bill aimed at reducing the backlog of nearly 900,000 Medicare claims now awaiting administrative law judge (ALJ) hearings. 
 
The bipartisan legislation offered by Finance Chairman Orin Hatch (R-Utah), among other things, would increase fiscal 2016 funding for the Office of Medicare Hearings and Appeals (OMHA) by $127 million and by $2 million for the HHS Departmental Appeals Board, the last stop for administrative appeals.
 
As voted out on June 3, the bill also would authorize OMHA to augment its ALJs with a new category of hearing officer, the Medicare “magistrate.” Beginning Jan. 1, 2017, magistrates would be responsible for the smallest claims, currently those between $150 and $1,460.
 
In addition, the bill would direct HHS to establish a process to allow ALJs and magistrates to issue decisions.
 
But while the magistrates and most other bill provisions would be somewhat helpful, “they aren’t real game-changers relative to the huge backlog existing today,” says Bill Dombi, the National Association for Home Care & Hospice’s vice president for law. (HHL 5/4/15).
 
In fact, Dombi believes only one provision “could and would have significant potential impact” — the bill’s alternative dispute resolution process that could be used to settle large volumes of pending appeals. And even that would depend on how HHS implements the changes, he says.
 
One thing that didn’t make the final version of the bill was NAHC’s suggestion for an appeals settlement option that correlates with average ALJ reversal rates. If, for example, ALJs have been finding in favor of agencies with face-to-face denials in 70% of cases, an agency that chooses to settle could count on receiving 70% of its disputed reimbursement. A settlement could not provide a 100% win rate for providers, but this approach would greatly reduce appeals, according to NAHC.
 
A second NAHC suggestion — stop Medicare administrative contractors (MACs) from recovering alleged overpayments (plus interest prior to an ALJ decision. With expected wait times of 30 months and longer, “providers should not have to pay back a disputed claim until the appeal is completed,” NAHC argued unsuccessfully.