On November 1, 2018, in response to a 2014 lawsuit filed by several individual hospitals and the American Hospital Association (“AHA”), the U.S. District Court for the District of Columbia ruled that the Department of Health and Human Services (“HHS”) must eliminate all of its more than 426,000 unresolved Medicare disputes by 2022, including 19% by the end of fiscal year 2019, and almost half by the end of fiscal year 2020. 

In a statement issued last Thursday, AHA said it is “extremely pleased” with the ruling, which will bring providers who have been waiting years to resolve Medicare disputes closer to having their cases heard.  “The court’s mandamus order will serve to keep HHS accountable in reducing the backlog,” AHA General Counsel Melinda Hatton said.

The case has been bouncing between federal district courts and circuit courts for four years as judges weighed whether HHS has the ability to resolve the appeals within a set timeframe.  In March, however, Congress allocated $182.3 million toward the Office of Medicare Hearings and Appeals to hire judges and support staff.  HHS then set its own deadline, which the court believed it should be able to adhere to.  District Court Judge James E. Boasberg said the federal funding was a “deus ex machina” in the case.  Had it not come through, a judge would have been required to determine the appropriate deadlines and impose them, something Judge Boasberg said the courts are not necessarily positioned to do.  The court noted that “[s]hould a change in circumstances — not limited to an appropriations shortfall — render lawful compliance with the order impossible,” HHS can come back to court to request an extension.

While the ruling is a win for providers, the court declined several additional requests from AHA, including a request that the court order HHS to lower interest rates on disputed payments it had yet to receive from providers as it cleared the backlog, and a request to allow providers to rebill claims that were miscoded.  Judge Boasberg decided neither request related directly to the timeline issue at hand.  The court also declined to order a third AHA request that would explicitly require HHS to continue all current programs aimed at reducing the backlog.  Doing so, he argued, would hinder HHS’ ability to devise innovative ways to chip away at the appeals.

The full opinion in American Hospital Association et al. v. Azar, case number 1:14-cv-00851, can be found here.