HHS is implementing rules that will expand the pool of available Office of Medicare Hearings and Appeals (OMHA) adjudicators and improve the efficiency of the appeals process by streamlining the processes so less time is spent by adjudicators and parties on repetitive issues and procedural matters. The rules are designed to reduce a backlog of appeals and will be achieved through two major changes: (1) the Chair of the Department Appeals Board (DAB) will be granted the authority to designate a final decision issued by the Medicare Appeals Council (Council) as precedential; and (2) providing authority for attorney adjudicators to issue decisions (Final rule, 82 FR 4974, January 17, 2017).
The appeals backlog. In recent years, the Medicare appeals process has experienced an unprecedented and sustained increase in the number of appeals, with request for administrative law judge (ALJ) hearings increasing 1,222 percent from fiscal year (FY) 2009 to FY 2014. Despite significant gains in OMHA ALJ productivity, and initiatives by CMS and OMHA to address the increasing number of appeals, the number of requests for an ALJ hearing and request for reviews of qualified independent contractor (QIC) and independent review entity (IRE) dismissals continue to exceed OMHA’s capacity to adjudicate the requests. For example, as of September 30, 2016, OMHA had over 650,000 pending appeals, while OMHA's adjudication capacity is approximately 92,000 appeals per year.
In response to this appeals backlog, on July 5, 2016, HHS proposed the implementation of rules that would allow the designation of precedential final decisions and the use of attorney adjudicators (see Administrative decisions granted new precedential authority, adjudicators, June 29, 2016).
Precedential final decisions. The Final rule introduces precedential authority to the Medicare claim and entitlement appeals process for: (1) Medicare fee-for-service (Part A and Part B) appeals; (2) appeals of organization determinations issued by Medicare Advantage (MA) and other competitive health plans (Part C appeals); (3) appeals of Part D prescription drug coverage determinations; and (4) certain quality improvement organization (QIO) determinations.
Under the rule, the Chair of the DAB has the authority to designate a final decision of the Secretary issued by the Medicare Appeals Council (Council) as precedential. HHS believes this will provide appellants with a consistent body of final decisions of the Secretary upon which they could determine whether to seek appeals. It will also assist appeal adjudicators at all levels of appeal by providing clear direction on repetitive legal and policy questions, and in limited circumstances, factual questions.
Under the rule, in the limited circumstances in which a precedential decision would apply to a factual question, the decision would be binding where the relevant facts are the same and evidence is presented that the underlying factual circumstances have not changed since the Council issued the precedential final decision.
The rule also provides that in selecting a Council decision as precedential, the DAB Chair may consider decisions that address, resolve, or clarify recurring legal issues, rules or policies, or that may have broad application or impact, or involve issues of public interest.
Attorney adjudicators. The Final rule provides authority for attorney adjudicators to: (1) issue decisions when a decision can be issued without an ALJ conducting a hearing under the regulations; (2) dismiss appeals when an appellant withdraws his or her request for an ALJ hearing; (3) remand appeals for information that can only be provided by CMS or its contractors or at the direction of the Council; and (4) conduct reviews of QIC and IRE dismissals.
Under the rule, an attorney adjudicator in is defined as a licensed attorney employed by OMHA with knowledge of Medicare coverage and payment laws and guidance.
The rule also revises the regulations to make clear that decisions and dismissals issued by attorney adjudicators may be reopened or appealed in the same manner as equivalent decisions and dismissals issued by ALJs. The rule further provides that the rights associated with an appeal adjudicated by an ALJ would extend to any appeal adjudicated by an attorney adjudicator, including any applicable adjudication time frame, escalation option, or right of appeal to the Council.
Applicability of Part 405 rules to other parts. Current MA regulations at 42 C.F.R. 422.562(d) state that unless its rules regarding grievances, organization determinations and appeals under the MA program provide otherwise, the regulations found in 42 C.F.R. part 405 will apply only to the extent appropriate. In addition, the regulations at 42 C.F.R. 478.40(c) indicate that the part 405 regulations apply to hearings and appeals under subpart B of part 478 regarding QIO reconsiderations and appeals, unless they are inconsistent with specific provisions in subpart B.
As a result, the Final rule specifies the provisions of part 405, subpart I contained in the Final rule that are not applicable to MA program appeals or appeals of QIO reconsidered determinations under part 478, subpart B. These provisions include:
- time frames for making a redetermination;
- time frame for making a reconsideration following a contractor redetermination, including the option to escalate an appeal to the OMHA level;
- time frames for deciding an appeal of a QIC reconsideration or escalated request for a QIC reconsideration, including the option to escalate an appeal to the Council;
- the option to request that an appeal be escalated from the OMHA level to the Council and the time frames for the Council to decide an appeal of an ALJ's or attorney adjudicator's decision or an appeal that is escalated from the OMHA level to the Council;
- request for escalation to federal court; and
- any other references to requiring a determination of good cause for the introduction of new evidence by a provider, supplier, or a beneficiary represented by a provider or supplier.
OMHA references. To provide clarity to the public on the role of OMHA in administering the ALJ hearing program, and to clearly identify where requests and other filings should be directed, the Final rule defines OMHA as the Office of Medicare Hearings and Appeals within the U.S. Department of Health and Human Services, which administers the ALJ hearing process. The rule also amends regulations to reference OMHA or an OMHA office, in place of current references to an unspecified entity, ALJs, and ALJ hearing offices, when a reference to OMHA or an OMHA office provides a clearer explanation of a topic.
Medicare Appeals Council references. The Council is currently referred to as the "MAC" throughout the appeals regulations. This reference has caused confusion in recent years with the transition from fiscal intermediaries and carriers, to Medicare administrative contractors (for which the acronym "MAC" is also commonly used) to process claims and make initial determinations and redeterminations in the Medicare Part A and Part B programs. In addition, current MA regulations reference the Medicare Appeals Council but use "Board"' as the shortened reference, and other regulations reference the DAB as the reviewing entity for appeals of ALJ decisions and dismissals, despite the fact that the Council is the entity that conducts reviews of ALJ decisions and dismissals, and issues final decisions of the Secretary for Medicare appeals.
To address this confusion, the Final rule amends the regulations to replace "MAC" or "Board" with "Council." In addition, to align references to the Council as the reviewing entity for appeals of ALJ decisions and dismissals, the rule replaces "Department Appeals Board" and "DAB" in the regulations with "Medicare Appeals Council" and "Council."
The regulations are effective March 20, 2017.
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