On March 26, 2004, The Secretary of Health and Human Services (HHS) and the Commissioner of Social Security (SSA) submitted to Congress their Plan for the Transfer of Responsibility for Medicare Appeals. The report to Congress was developed under Section 931 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), Pub. La. No. 1008-173, 117 Stat. 2066 (Dec. 8, 2003), which authorized the transfer of administrative law judges (ALJs) from SSA to HHS. According to the report, discussions concerning the transfer of ALJs pre-date the MMA and have been under consideration since SSA became an independent agency.

Establishment of an ALJ Office

As a result of efforts by the Center for Medicare Advocacy and other advocates to assure the continued independence of ALJs, the MMA requires HHS to establish an office of ALJs that is organizationally and functionally separate from CMS. ALJs are to report directly to the Secretary of HHS and cannot be under the supervision of any other officer of the Department.

According to the report, HHS intends to establish a central office for ALJs that is responsible for direction, liaison, budget support and human resource management of the hearing function. The office will be located in the Baltimore/Washington area. By the end of 2004 HHS will make determinations about the location of its ALJs in field offices. HHS and SSA will look for opportunities to share resources, including videoconferencing (VTC) capabilities.

HHS and SSA project that HHS will need to hire 50 ALJs initially, four more than the 46 ALJs per month SSA currently assigns to handle Medicare cases. The projected need for more ALJs is based on two changes to the Medicare appeals process that have yet to be implemented: the ability to escalate cases to an ALJ hearing when a reconsideration decision is not issued within 60 days, and the establishment of a 90-day time limit for conducting ALJ appeals. The report anticipates that HHS will need more than 50 ALJs in the future, but notes that the addition of a Medicare prescription drug benefit and the expected increase in managed care plan enrollment make it difficult to predict how many more ALJs will be needed. HHS intends to begin soliciting ALJ applicants at the end of 2004 and to begin hiring and training during the first part of 2005.

Transition Timetable

The report calls for a phased in transition of responsibility for Medicare ALJ appeals:

Medicare contractors will be instructed to submit appeals to HHS, and HHS will begin tracking appeals received after those dates.

The report refers to initiatives SSA and HHS will undertake to increase the efficiency of the appeals process, including uniform file organization and improved case preparation by Medicare contractors; full screening of Medicare receipts by a centralized unit of SSA and HHS Medicare expert staff for potential dismissals and on the record decisions; increased specialization of ALJs and support staff handling Medicare cases; and maximum use of VTC hearings and expert testimony by phone.

Appeals Procedure Issues

In the fall of 2002 CMS published proposed rules to implement changes made to the Medicare Parts A and B appeals process by the Beneficiaries Improvement and Protection Act of 2000 (BIPA). The report says that CMS will make final the proposed regulations without giving an estimated date of publication. While ALJ hearings currently are conducted according to the same rules as social security claims, the proposed rules established Medicare-specific procedures for ALJ hearings and for subsequent review by the Departmental Appeals Board (DAB). The report emphasizes the importance of having Medicare-specific rules because the BIPA changes, including the opportunity to escalate appeals and the statutory time frames, apply to Medicare claims and not to social security disability claims. The report also states that separate regulations concerning the Part D drug benefit, electronic filing of appeals, and use of video teleconferencing for appeals will be issued after the BIPA appeals are issued.

The report rejects a recommendation by the General Accounting Office that DAB decisions be treated as binding precedent on other cases. HHS and SSA cite the inability of CMS to participate directly in administrative appeals, and therefore its inability to ensure that the DAB has all of the authorities and will consider all of the issues the agency deems relevant. The agency also cannot appeal an "erroneous" ruling.

The Center for Medicare Advocacy will continue to monitor plans to transfer the ALJ function from SSA to HHS and will post updates here on our web page.

Copyright, Center for Medicare Advocacy, Inc. 09/10/2013