The federal Medicare program is facing a backlog of about 357,000 cases in its appellate process, leaving medical providers and doctors waiting years to be paid for their services.
Of those backlogged appeals, 35,000 are for Medicare beneficiaries, mostly seniors who are on fixed incomes, adding to mounting medical payment woes for some of the nation's most vulnerable.
The backlog marks yet another challenge for Medicare administrators and a program already facing deep cuts in funding and a growing number of beneficiaries as more Baby Boomers become eligible to join.
Democratic Rep. Jim McDermott
of Washington has sent a letter to Health and Human Services Secretary Kathleen Sebelius concerning the backlog of appeals pending with the Office of Medicare Hearings and Appeals (OMHA).
In it he said that "the recent announcement that healthcare providers will likely experience a 28-month delay until their cases can be heard before an administrative law judge will negatively impact providers, who often see payment denials reversed upon appeal."
"More importantly, while current policy dictates that Medicare beneficiaries move to the front of the line for their appeals to be heard, there is some indication that the backlog is negatively impacting Medicare beneficiaries, as well, which can leave many Americans on fixed incomes to struggle with denied Medicare payments," McDermott said.
Gail Wilensky, a health economist and senior fellow at Project HOPE, an international health foundation, told Newsmax the backlog is typical for a massive bureaucratic program with lots of complications.
"It's a reminder that anybody who thinks having the government running something like Medicare, paying those bills — this just shows that it's not so easy to do," said Wilensky, who directed Medicare and Medicaid programs from 1990 to 1992 and served as a healthcare adviser to President George H.W. Bush.
The nation's top physician groups remain deeply concerned, writing to chief administrative law Judge Nancy J. Griswold in February, an effort led by the American Medical Association.
Their letter to Griswold, signed by more than 30 physician groups and 51 state medical societies and associations, shined a spotlight on concerns not only over the appeals delay but also on the due-process rights of doctors, as well as the profession's ability to overturn erroneous determinations, the groups said.
"The numerous appeals requirements, actual costs of filing appeals, and often lengthy delays undermine the ability of physicians to deliver patient-centered care," the organizations wrote in a joint letter.
"As a necessary first step, we strongly urge you to remedy the OMHA backlog immediately. With the numerous new regulatory requirements that physicians are facing today, physicians do not have the resources to navigate an interminable appeals process," the groups said.
The doctors are not alone. In December, more than 100 lawmakers wrote to the Center for Medicare and Medicaid Services (CMS), Medicare's administrator, seeking reform of the program for Recovery Audit Contractors (RACs), who serve to review claims and deny improper claims.
Wilensky said reform requires maintaining a careful balance for both beneficiaries and providers.
"You want to balance your incentives. It might be necessary to have a financial penalty associated with this every time something is overturned on appeal," she said of possible reforms. "You should have some overturned, but you don't want to audit everyone. That is way too much work and expensive. But it may be if an auditor has too many overturned on appeal that they should lose their contracts."
The RACs, she added, are paid according to the number of audits they do.
"They have an incentive to challenge areas that they think are improperly being paid by Medicare. That is their business, and they are financially encouraged to be aggressive," she said. "CMS gets pushed around both ways."
McDermott, in his letter, called for not only treating the symptoms of the problem but finding a "fast, effective cure without waiting for Congress to take action."
"The agencies must review their administrative procedures and act now to protect seniors who are struggling to get Medicare payment appeals addressed," he said. "We must also act quickly on behalf of legitimate healthcare providers, who are seeing Medicare denials overturned in large numbers upon appeal."
Also feeling pressure in the Medicare dilemma are administrative law judges, who must hear the appeals.
The judges are under fire through little fault of their own as they work through the mounting backlog. By law they are required to review appeal claims within 90 days. But now, with the overload from the RACs, their time frame is running up to 28 months, by one estimate, as the number of filed appeals rose in January from 1,250 weekly to 15,000 — a massive volume of paperwork requiring time to document and review.
To assist in handling such volume, the OMHA is developing an appeals status website to offer greater transparency and to enable tracking of current case appeals.
But at least one physicians group says its doctors are seeking ways to leave the program entirely.
"The concern we're going to hear and are hearing now from our members is about how to opt out of Medicare," said Dr. Jane Orient, an internal medicine physician and executive director of the Association of American Physicians and Surgeons.
Doctors, she added, are feeling the pinch of not being paid and are cutting back on the number of Medicare-enrolled patients they will see.
"You can only imagine that if Medicare is denying a whole lot of claims in your practice, it forces us to say, 'Look, this costs me money. If I face the prospect of not getting paid or having to file and refile claims and maybe get paid in six months or a year, I can't keep that up.'
"Everyone thinks doctors are greedy or fat cats. But not having money to pay their mortgage because they are not being paid for their work? Who could do that — continue to work and not get paid?"
She added: "Practice costs are going up relentlessly. The landlord and the utilities company and malpractice insurers are not willing to say, 'OK, Medicare claims are on hold for two years or more' and wait to get paid."
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