AHA and hospitals seek summary judgment in claim denial appeals backlog case

Noting that by their estimates, billions in disputed claims are tied up in the current appeals process for denied Medicare claims and this is causing severe harm to hospitals, the American Hospital Association along with the hospital operators Baxter Regional Medical Center, Covenant Health, and Rutland Regional Medical Center, have asked a Washington, D.C., court to issue a summary judgment in their favor and compel the U.S. Department of Health and Human Services (HHS) to honor the law’s requirement that disputed claims be heard by an Administrative Law Judge (ALJ) within 90 days.

According to their court filing, the situation is “dire.” The nine acute care hospitals of Knoxville, Tennessee-based Covenant Health have approximately 1,477 appeals currently pending at the ALJ level, representing more than $7 million in denied reimbursement, and this has become a major factor in its current negative operating margin.

Meanwhile, 268-bed Baxter Regional Medical Center in Mountain Home, Arkansas, has 230 claims, representing nearly $3 million in reimbursement for services rendered, tied up at the ALJ level of the appeals process. Because these funds are unavailable, Baxter has been unable to purchase basic equipment for patient care, such as new intensive care unit beds and has had to patch instead of replace a failing roof over its surgery department. It also cannot afford to update its 20-year-old catheterization laboratory and will soon need to shut it down. In addition, Baxter said its bond rating might fall to “junk bond” status if the ALJ delays continue.

Finally, 133-bed Rutland Regional Medical Center in Rutland, Vermont, said deficits and cash flow problems caused in part by the appeals delays have forced it to do two rounds of cost reductions, resulting in the elimination of thirty-two jobs.

“HHS’s unlawful delays have not been, and cannot be, justified by a supposed competing or higher priority that would render these delays reasonable,” the AHA and the hospitals say in their appeal for summary judgment.

They’ve requested an oral hearing on their appeal for immediate judgment in their favor and the court ordering HHS to hold all appeals waiting at the ALJ level within 90 days.