The Broken Medicare Appeals System: Failed Regulatory Solutions and the Promise of Federal Litigation
51 Pages Posted: 15 Aug 2018
Date Written: August 1, 2018
The Medicare Appeals System is broken. For years, the System has been unable to accommodate a growing number of appeals. The result is a backlog so large that even if no new appeals were filed, it would take the System a decade or more to empty. Healthcare providers wait many years for their appeals to be heard before an Administrative Law Judge (ALJ), and because the government recoups providers' Medicare payments while they wait, the delays cause them serious financial harm. Even worse, providers are more likely than not to prevail before the ALJ, proving that the payment should never have been recouped in the first place. The financial pressure on providers creates widespread reverberations in the healthcare market, and consumers ultimately pay the price. Nevertheless, the government appears unwilling or unable to fix the problem. This Article explores how the System works, why the System broke, and what legal or legislative remedy could solve its problems. The Article articulates the central concern underlying the System's backlog: small providers lack the liquidity and revenue stream to endure the uncertainty and delayed gratification that is now required to participate in the Medicare Program. As a result, these companies collapse or are purchased by larger providers—contributing to the consolidation of the healthcare market. An optimal remedy would relieve the pressure small providers face; it could be achieved by delaying the government's ability to recoup Medicare payments before the provider has received an ALJ determination. Though legislative or administrative action could most easily accomplish this goal, providers have asked the judiciary to step in where the government is failing. Of the various legal challenges that providers have lodged against the government to protest the System's delays, the one most likely to help small providers is under the Due Process Clause. This Article concludes that a due process challenge—though difficult to win—could have merit and might be small providers' best chance of obtaining relief, at least in the short term.
Keywords: Medicare Appeals System, Medicare claims, Medicare provider claims, health insurance, procedural due process, Medicare provider payment reform, health care financing, health policy, Administrative law
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