Providers skirt ALJ loss, for now

Wednesday, April 30, 2003

WASHINGTON — The Bush Administration’s plans to submit legislation that would’ve brought major changes to Medicare by ultimately eliminating the administrative law judge (ALJ) from an audit appeal, were sidelined after providers objected to the idea.

However, another proposal designed to move the ALJ from the Social Security Administration, where it is currently employed, over to Health and Human Services is now at large in the House. The proposal is an effort to keep the ALJ independent from CMS.

Asela Cuervo, senior vice president of government relations and general counsel for AAHomecare, said that under the Social Security Administration there is a perception from providers that the ALJ could be influenced by Medicare, since the health care program is also associated with the administration.

“The perception is out there,” Cuervo said. “Health and Human Services wants control of the ALJ process.”

The Bush Administration also intended to submit new rules and legislation to make it more difficult for beneficiaries to appeal the denial of certain benefits by limiting the independence of the ALJ and allowing them to be replaced by HHS attorneys or hearing officers. The proposal called for limiting the independence of the judges and would’ve required judges to give deference to CMS policies and to companies that contract with the agency to review and pay Medicare claims. Also the rules would require beneficiaries to show why such policies should be disregarded in appeals over the denial benefits.

But a strong outcry from providers and ALJs prevented the proposal from picking up any steam. One ALJ called Bush’s proposal a “stealth attack on the rights of citizens to fair impartial hearings” and others said it puts beneficiaries at a disadvantage with inadequate expertise to try their cases.

“It’s a very hot topic with so much controversy around it,” said Cuervo. “The proposal did not make it into the legislation that passed. It got a lot of debate.”

Many providers feel they have a better chance of winning an appeal at the ALJ level due to its independence from CMS. In fact, the reversal rates are very high.

About 78% of DME appeals are reversed at the ALJ level, according to a 1999 report by the OIG. The reasons? The ALJ is not bound by local medical review policies; the ALJ lacks Medicare training; and hearings are not adversarial, say industry sources. HME