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AHA Loses Case Focused on Medicare Hearings and Appeals

By Kyle Murphy, PhD

The battle between the AHA and HHS over Medicare hearings and appeals heads toward the appeals process.

A United States district court has sided with the Department of Health & Human Services (HHS) in the standoff between the federal agency and the American Hospital Association (AHA) over the handling of Medicare appeals by Office of Medicare Hearings and Appeals (OHMA) and Administrative Law Judge (ALJs).

Judge James E. Boasberg has granted the HHS’s motion to dismiss and denied the AHA’s motion for summary judgment on the grounds that it is not the Court’s position to intervene in a decision-making process currently being discussed by Congress and HHS.

“No one denies that OMHA’s ALJs are unable to render decisions in accord with the statutory guidelines laid out by Congress,” writes Judge Boasberg. “No one denies that this is a problem in need of a fix. This Court, however, is not in a position to provide that fix. Although a superficial accounting might reveal a 2-2 tie among the factor groups, HHS’s budgetary constraints, its competing priorities, and its incipient efforts to resolve the issue together dictate that mandamus is not warranted.”

Using the precedent set by Telecommunications Research & Action Ctr. v. FCC, the Court applied six considerations — TRAC factors — to the AHA’s argument and ultimately found them insufficient to warrant its intervention.

“In the end, here is the state of affairs: OMHA has been saddled with a workload it cannot, at present, possibly manage,” Judge Boasberg explains. “Congress is well aware of the problem, and Congress and the Secretary are the proper agents to solve it. In such situations – where an agency is underfunded and where it is processing Plaintiffs’ appeals on a first-come, first-served basis — the Court will not intervene.”

Judge Boasberg identified one TRAC factor in particular — competing priorities — as the “knotty heart of the case” and used it an opportunity to draw implications about the AHA’s true motivation in bringing the case before the US District Court.

“Finally, and perhaps tellingly, they claim that HHS should ‘rein in’ RAC audits,” he continues. “At the end of the day, this appears to be their true aim in bringing suit. Although the other potential remedies are urged, the RACs are Plaintiffs’ bête noire. This suggestion, however, is no more helpful than the others.”

Despite finding in favor of HHS, Judge Boasberg has urged HHS and Congress to find a resolution:

The Court hopes that the Secretary and Congress will continue working together toward a solution and that OMHA will receive the resources necessary to fulfill its obligations. Hospitals that are owed reimbursement should not be indefinitely deprived of funds. The AHA is poised to appeal the Court’s decision.

According to a statement by AHA President and CEO Rich Umbdenstock, the AHA is ready to move forward with the appeals process. “We expect to appeal the decision and will call upon the government to identify those priorities that trump providing hospitals with the necessary resources to provide essential care to the nation’s elderly and most vulnerable patients,” he stated Friday.

“While the court itself recognizes that hospitals simply cannot afford to have billions of dollars that are needed for patient care tied up indefinitely in the appeals process, its decision means that hospitals will be compelled to endure a prolonged ‘waiting game,’” he continued. “We are extremely disappointed that a court entirely insulated from the devastating effects of multi-year delays in payments for medical care as a result of bureaucratic mismanagement would find in favor of the government.”

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