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Providers were quick to react to the decision by the Office of Medicare Hearings and Appeals (OMHA) to suspend new hearing requests for two years.

In an OMHA memo obtained by RACmonitor, Nancy J. Griswold, chief administrative law judge (ALJ), wrote that assignment of most new requests for hearings will be “temporarily suspended.” OHMA, noted Griswold, would continue to assign and process requests filed by Medicare beneficiaries directly.

Griswold painted a grim picture of the workload under which the ALJs have been operating. Noting that the OMHA backlog has grown from 92,000 claims to more than 460,000 in two years, and that the backlog is expected to increase, Griswold said that the wait time for an ALJ hearing is now 16 months.

“However, with current backlog, we do not expect general assignments to resume for at least 24 months,” Griswold wrote. Against this backdrop, Griswold has invited interested parties to attend what she described as an “OMHA Medicare Appellant Forum” on Feb. 12 in Washington, D.C.

The OMHA decision has been met with swift response from providers and associations, and comments made to RACmonitor are indicative of the reaction to the delay.

“We are denied due process; reviews are so extended that you have to consider the opportunities you will miss by not having the use of your money,” wrote one provider who requested anonymity because she was not authorized to speak on behalf of her facility.  “All of these delays artificially inflate days in A/R, (and) trying to collect from patients or reconcile patient accountability gets harder and harder as time passes. I have already had calls from families of patient(s) who have died, and now CMS is not going to cover the time they were sick four years ago? The whole thing makes me sick.”

Sandra Palmer, compliance auditor for McLaren Greater Lansing in Lansing, Mich., has three recommendations for improving the ALJ appeal process.

First, Palmer noted in an email to RACmonitor, the ALJ website is woefully out of date. Palmer claims that the site is at least eight months behind, noting that she and other providers have no way of knowing if their appeals have been received.

“The ALJ used to send a confirmation letter, but they no longer do that,” Palmer wrote. “It should be mandatory to update the website within a certain time period (such as 10 days), so that if the appeal has been lost in the mail or lost in the system, we can resend it within the timely filing time period.”

A second recommendation offered by Palmer is that the ALJ should be required to acknowledge when a provider wants to withdraw a request for a hearing.

“When a request is made to an ALJ office to withdraw a request for an ALJ hearing, there should also be a mandatory time period, such as 30 days, for the ALJ to complete this request,” Palmer wrote. “I have about a dozen requests that were sent in April 2013, with still no acknowledgment from the ALJ office, thus we are unable to rebill for part B services. I have left several phone messages and followed up with certified mail requests, with still no response.”

Finally, Palmer believes that the requirement to notify beneficiaries of appeals to the ALJ should be eliminated. Noting that providers currently are prohibited from sending bills to patients when appeals are unfavorable, Palmer reasoned that beneficiaries have no interest in the appeals.

“If it takes two to five years for the hearing to be scheduled, the beneficiary is not likely to have any recollection of having received notice of the appeal from the hospital (if the beneficiary is still alive, and can still be located),” Palmer wrote. “It should be recognized that this is a billing issue between the hospital and CMS, with no liability to the beneficiary. Furthermore, the copying of the lower-level appeal decisions to the beneficiary by the MAC and the QIC should also be eliminated.”

The bottom line for Palmer is that payment for such cases should not be withheld from the hospital for the two to five years in which cases are sitting at the ALJ level. 

“We opt for the automatic recoupment to avoid any interest penalty; however, the interest penalty should be eliminated due to the extensive time that it takes to hear the case,” Palmer said.

Mike Jamrog, the compliance and privacy officer for McLaren Bay Region in Bay City, Mich., offered a pragmatic approach.

“All levels of appeal should be held to the same time standard and the same consequences,” Jamrog wrote in an email to RACmonitor. “If a provider takes longer than 45 days to send records, (that provider would) … lose all cases.”

The problem, however, is a lack of response from the QIC or ALJ, Jamrog added.

“We haven’t gotten a QIC decision or an ALJ hearing in the required time limit in 2-3 years,” he wrote. “If the people at any appeal level miss a timeline, (the) denial (is) reversed in favor of provider.”

Jamrog also believes that part of the problem is the lack of education among the RACs and providers. He specifically cited the RAC in his region, CGI.

“CGI has never provided any type of education to providers,” Jamrog wrote. “I have never seen any type of quality report from CMS on the quality and quantity of denials by the RAC.”

Finally, Jamrog wrote that CMS should be required to submit a report or plan of correction within 60 days of FYE.

“If (a) deadline (is) missed (by a) RAC,” he said, “funding should be withheld.”

In the meantime, the American Coalition for Healthcare Claims Integrity, an association representing Recovery Auditors, has written a letter to Congress — specifically to U.S. House of Representatives and Senate members who co-sponsored the Medicare Audit Improvement Act of 2013 (H.R. 1250 and S. 1012) — accusing the ALJ of “undermining the audit process” and urging the U.S. Department of Health and Human Services to reverse the ALJ stance.


“We encourage HHS to reverse the recent ALJ decisions and instead offer solutions for long-term reform of the RAC appeals process. Meaningful reform would allow the ALJ to effectively manage incoming appeals – an outcome sought by providers and auditors,” wrote Rebecca Reeves on behalf of the association.

Last week, the American Hospital Association piled on with a letter to CMS Administrator Marilyn Tavenner. The AHA position is that delays sought by the ALJ are against the law.

“Delays of at least two years in granting an ALJ hearing for an appealed claim are not only unacceptable, they are a direct violation of Medicare statute that requires ALJs to issue a decision within 90 days of receiving the request for hearing,” the letter read. “Further, this is not a new problem; prior to OMHA’s suspension of appeals assignments, ALJs were not adhering to their statutory deadline.”

In the association’s letter to Tavenner, the AHA cited its own RACTrac surveys as being indicative of the RAC approach of denying claims – and of the success providers have experienced in the appeal process.

“According to the RACTrac survey, hospitals have won nearly 70 percent of the claims for which the appeals process has been completed,” the AHA noted in its letter to Tavenner. “Over 70 percent of the overall RAC denials that have been appealed by hospitals since the program began are still pending in the appeals process. This is primarily due to the backup at the ALJ level.”

About the Author

Chuck Buck is publisher of Racmonitor.

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OMHA Memorandum

American Hospital Association Letter

American Coalition for Healthcare Claims Integrity


Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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