A federal appeals court has sent a lawsuit back to lower courts, forcing it to make a decision on the length of time it takes for the government to complete cases of denied Medicare claims.
The lawsuit, brought by the American Hospital Association and several hospitals, argued that it takes too long to complete the appeals process for denied Medicare claims, leaving revenue in limbo for years in some cases.
Additionally, legislation was introduced last year by Congress with the intent of streamlining the appeals process in order to reduce the backlog, among other changes.
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A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit reversed that decision last week and sent the recovery audit matter back to the lower court for further consideration.
“Although the audit program has recovered billions of dollars in fraudulently or otherwise improperly paid funds, it has also contributed significantly to a volume of appeals that makes compliance with the statutory time frames impossible,” appellate Judge David Tatel wrote in the ruling. The district court, he wrote, should consider “the problem as it now stands — worse, not better.”
The CMS did not respond to a request for comment about the ruling.
The Council for Medicare Integrity, a RAC lobbying group, said in a statement that the decision is a reminder that “all parties believe the appeals process is in dire need of improvement.” The group’s response, however, also stated it was “disappointing to see any validity given to provider claims regarding overturn rates and audit accuracy.”
While hospitals blame the backlog on overzealous audit contractors driven by the bounty paid for recovering government dollars, the Council for Medicare Integrity argues that a small number of hospitals account for a disproportionate number of appeals, suggesting “a few ‘frequent flier’ hospitals are appealing every claim in an effort to game the system.”
The federal government has a backlog of more than 800,000 appeals of denied Medicare claims.
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