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On July 10, 2018, the President signed an Executive Order undermining the impartial hiring of Administrative law Judges (ALJs). The order states that “conditions of good administration make necessary an exception to the competitive hiring rules and examinations for the position of ALJ.”  What this really means is that ALJs will now be hired directly by each individual agency, including CMS for Medicare appeals. This is a dramatic change from the current centralized system that selects applicants deemed qualified through a competitive examination and selection procedures administered by the Office of Personnel Management.

Advocates and legislators are concerned.  Rep. John Larson of Connecticut says that Americans “deserve an impartial hearing by a highly-qualified, independent judge. But under the Administration’s new policy, they will face a judge beholden to ideology and politics rather than one selected through a competitive process designed to ensure qualification and neutrality.”

By statute, Medicare ALJs must be independent of CMS. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), Public Law 108-173, §931 transferred the function for Medicare ALJ appeals from the Social Security Administration to the Department of Health and Human Services. The law specifically states that ALJs are to be “organizationally and functionally independent of CMS.” (5 USC §554(d); 70 Fed Reg 11420-499 (March 8, 2005). The Executive Order conflicts with this statutory requirement.

The Executive Order’s tie of ALJ appointments to CMS does not bode well for Medicare beneficiaries who seek a fair, independent review of Medicare coverage denials. The Center for Medicare Advocacy’s experience with thousands of Medicare appeals demonstrates that the lower levels of appeal are all but rubber stamps of Medicare denials. The ALJ level of appeal is the only real chance for beneficiaries to obtain an independent review. The fairness and objectivity of the appeals process will be gravely damaged by authorizing CMS to appoint its own ALJs, replacing current objective examination and competitive processes.

July 12, 2018 – M. Shepard

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