Updated on: August 18, 2016

Federal Settlement Could Lead to Faster ALJ Decisions for Beneficiaries

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Original story posted on: August 17, 2016

The Center for Medicare Advocacy (CMA) is touting the anticipated benefits of a recent ruling by a federal judge in Connecticut that could lead to faster Medicare appeal hearings and decisions involving administrative law judges (ALJs) nationwide.

“Although required by law to issue decisions within 90 days of receiving a request for … (ALJ) review, Medicare’s Office of Hearings and Appeals (OMHA) was consistently taking a year or more to complete the task,” a CMA press release issued earlier this month read. “(The judge’s) actions go a long way to resolving the ongoing problem in the Medicare system of administrative review, in which beneficiaries have routinely been denied at the paper-review stages and then been forced to wait indefinitely for a live ALJ hearing – where the chance of success jumps to the 60-70-percent range.”

The case referenced by CMA, Exley v. Burwell, was resolved at the start of the month. CMA reported that a week after approving the settlement, the same federal judge, Judge Jeffrey Meyer, in a related case challenging the 98-percent denial rate at the two levels of appeal below the ALJ level, denied the government’s motion to dismiss and granted the plaintiff’s motion for certification of a nationwide class.

Center for Medicare Advocacy Executive Director Judith Stein, whose attorneys handled both cases, described the outcomes as decisive victories.

“The great majority of beneficiaries lack representation, and the combination of rubber-stamp review at the lower levels and the extraordinary ALJ delay is so daunting that they give up,” CMA quoted Stein as saying. “We hope and expect that these decisions will reverse that trend and make appeals of Medicare coverage denials timely and meaningful again.”

The main feature of the Exley settlement is that Medicare beneficiaries, whose appeals to the ALJ level represent only about 1-2-percent of all Medicare appeals, will be placed at the head of the backlog line, greatly reducing wait times. Although OMHA has been informally following such policy, it will now be required to under the settlement, CMA noted, describing prioritizing beneficiary appeals as having a “negligible effect on the system as a whole while ensuring timely decisions for those who need them most.”  

The settlement will be enforceable well into 2019. The son of the original plaintiff in the landmark case, Stephen Lessler (who waited over nine months after appealing for coverage of nursing facility care and died the day before OMHA issued a favorable ALJ decision), said he was gratified that at least his father’s ordeal would benefit others. 

“Justice for my father was delayed just a bit too long,” Robert Lessler said, as quoted in CMA’s press release. “I am very pleased, though, to know that through this litigation, no more Medicare beneficiaries will endure a similar delay.”

In the Sherman challenge to the denial rate at the first two levels of appeal, the government had sought to have the case dismissed on two jurisdictional grounds, CMA added. The judge rejected both arguments, holding that the plaintiff was not required to exhaust administrative remedies in order to bring the claim to court and that the case had not been mooted out when coverage of the plaintiff’s individual claim was approved after the filing of the court case.  

CMA noted that the court also declined to dismiss the case by concluding that the plaintiff had stated a plausible claim for relief under the Due Process Clause in the contention that a “secret policy” was the cause of the dramatic rise in the denial rate. 

In addition, Judge Meyer certified all Medicare beneficiaries of home health care services who received an adverse initial decision on or after Jan. 1, 2012 and who received or will receive adverse decisions at the redetermination and reconsideration levels of appeal. The immediate effect of this? The government now must respond to the written discovery requests that plaintiff had submitted prior to the motion to dismiss. 

“With a nationwide class certified, this case will not be going away, and the government will not be able to limit the breadth of discovery to the individual plaintiff’s situation,” said Gill Deford, one of the CMA’s plaintiff attorneys handling this matter. “The extraordinary increase in the denial rate didn’t just happen by chance. Now, we should be able to find out how and why it happened.”

 

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Mark Spivey is a national correspondent for RACmonitor.com.

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Mark Spivey

Mark Spivey is a national correspondent for ICDmonitor.com, RACmonitor and ICD10monitor who has been writing on numerous topics facing the nation’s healthcare system (and federal oversight of it) for eight years.

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