The Office of Medicare Hearings and Appeals (OMHA), which oversees the Administrative Law Judge (ALJ) level of appeal, recently posted two important announcements regarding a new Statistical Sampling Initiative (SSI) and Settlement Conference Facilitation (SCF) pilot. Both initiatives are alternatives to the standard evidentiary hearing process before an ALJ and appear to be designed to help reduce the backlog of Medicare appeals at the ALJ (or third) level of the Medicare claims appeals process.

Settlement Conference Facilitation

The SCF pilot is an alternative dispute resolution process designed to bring the appellant and CMS together to discuss a mutually agreeable resolution for claims for Part B claims appealed to the ALJ level.  Under the SCF program, CMS (presumably through its contractors) and the appellant will meet with a facilitator employed by OMHA.  The OMHA facilitators will not “decide” claims but will use mediation principles to assist the parties in working to reach a mutually agreeable resolution.  Neither CMS nor the appellant is required to enter into a settlement agreement and both have the ability to reject offers.  If a resolution is agreed upon by both the appellant and CMS, a binding settlement document is signed by both parties.  If an agreement cannot be reached at the SCF session, the appealed claim will be returned to the ALJ hearing process for adjudication.  Importantly, the settlement pilot is currently only available for Part B claims for items or services.  To be eligible for the SCF process, among other things:

1. The request for hearing must have been filed in 2013 and not currently be assigned to an ALJ;
2. The amount of each individual claim must be less than $100,000, and for an extrapolated statistical sample, the extrapolated amount must be less than $100,000;
3. At least 20 claims must be at issue, or at least $10,000 must be in controversy if fewer than 20 claims are involved;
4. There cannot be an outstanding request for OMHA SSI for the same claims; and
5. The request must include all of the appellant’s pending appeals for the same item or service at issue that meet the SCF criteria.

Participation in the SCF process is voluntary and available upon request by qualified appellants.  The procedures are outlined on the OMHA website.  Additional information regarding the SCF process is available here.

Statistical Sampling Initiative

The SSI is a pilot aimed at appellants with a large volume of pending cases already assigned to a judge at the ALJ level.  The pilot applies to both Part A and Part B claims.  Sampling would presumably streamline the review process by permitting an ALJ decision on a subset of appealed claims to determine the outcome for all claims appealed.  Under the program, a statistical expert would select a sample of claims from a universe of pending claims to be reviewed by an ALJ during a hearing.  After an ALJ issues a decision on the sample units, the decision and sample methodology will be forwarded to a CMS contractor.  The contractor will extrapolate the ALJ’s decision on the sample units to the universe of appealed claims, and direct the Medicare Administrative Contractor to effectuate the decision based on the extrapolated amount.

Among other things, to be eligible to participate in the SSI pilot: 

1. Claims must be currently assigned to one or more ALJs or have been filed between April 1, 2013 and June 30, 2013;
2. No hearing on the claim may already be scheduled or have been conducted; 
3. There must be a minimum of 250 claims; and
4. All claims must fall into only one of the following categories: Pre-payment claim denials, Post-payment non-RAC claim denials, or Post-payment RAC claim denials from one RAC.

Appellants may request statistical sampling by following procedures outlined on the OMHA website.  Additional information about the SSI pilot is available here.

Reporters, Donna Thiel, Washington, D.C. +1 202 626 2393, dthiel@kslaw.com and Lauren S. Gennett, Atlanta, + 1 404 572 3592, lgennett@kslaw.com.