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Appeals Court Overturns Ruling Requiring HHS to Clear Medicare Appeals Backlog By 2021

On Friday, the U.S. Appeals Court for the District of Columbia overturned an order requiring Department of Health and Human Services (HHS) to clear its backlog of Medicare reimbursement appeals by the end of 2020. Indicating that the district court “declined to seriously grapple with the Secretary’s assertion that lawful compliance with such a mandamus order would be impossible,” the appellate court ruled that it was an “error or law” and an “abuse of discretion” for the district court to order the Secretary to perform an act – clear the backlog by certain deadlines – without evaluating whether performance was possible.

On Dec. 5, 2016, Judge James Boasberg, of the U.S. District Court for the District of Columbia, granted a motion for summary judgment filed by the American Hospital Association in AHA v. Burwell (14-851).  The order mandated that the HHS clear its backlog of Medicare reimbursement appeals by the end of 2020, adopting the deadlines and mandatory-percentage reductions put forth by the AHA – 30% reduction by December 31, 2017, 60% reduction by December 31, 2018, 90% reduction by December 31, 2019 and 100% by December 31, 2020.  The order further required HHS to file status reports with the court every 90 days.

On December 15, 2016, HHS filed a motion asking the judge to reconsider his decision. HHS argued it would be impossible to reduce the appeals backlog on the schedule provided by the court without improperly paying claims, regardless of merit. Judge Boasberg denied HHS’ motion for reconsideration and HHS appealed to the Court of Appeals.

Emphasizing that the district court was assigned an exceptionally difficult, unenviable task, the appellate court indicated that it was a “misstep” for the district court to take an end-oriented approach of setting targets.  Because it was mandating the ends, not the means, the district court failed to “dive into the parties’ debate” over the legality and propriety of the reforms necessary to clear the backlog.  The appellate court reiterated that courts must ensure that it is indeed possible to perform the act being commanded.

With Friday’s ruling, the appellate court vacated the mandamus order and the order denying reconsideration, and remanded the case to the district court to evaluate the merits of the Secretary’s claim that lawful compliance would be impossible.  The appellate court noted that the Secretary bears the “heavy burden to demonstrate the existence of an impossibility.”  Should the district court find that the Secretary failed to carry his burden of demonstrating impossibility, it could potentially reissue the mandamus order without modification. However, given the Secretary’s claim of impossibility, the district court must make the predicate finding of possibility.

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