(February 19, 2011): Over the years, we have represented a wide variety of health care providers in the administrative appeals process. Our duties have regularly included representation before Administrative Law Judges (ALJs) presiding out of the Western, Southern, Midwestern and Mid-Atlantic Field Offices of the Office of Medicare Hearings and Appeals. (OMHA). In the course of our work, we have routinely been asked by our health care provider clients for our opinion regarding the "independence" of ALJs from the pressures exerted by the Centers for Medicare and Medicaid Services (CMS) and its contractors (including, but not limited to the Qualified Independent Contractors (QICs), Zone Program Integrity Contractors (ZPICs) and Program Safeguard Contractors (PSCs)). The purpose of this brief article is to examine this issue in more detail. Background: As many of you will recall, prior to the passage of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Medicare administrative appeals were heard by Judges working for the Social Security Administration's (SSA's) Office of Hearings and Appeals. For much of that time, the SSA was an agency of the Department of Health and Human Services (HHS). In 1994, the SSA was officially separated from HHS and was made an independent agency. Despite the fact that the SSA was no longer part of HHS, its Judges continued to hear Medicare administrative appeals. Despite the fact that SSA used to a part of HHS (and for a short period was independent of HHS), in our opinion, SSA Judges were generally thought to be "independent" adjudicators of the facts, not impacted by, or bowing to, the effects of outside agency pressures. With the enactment of the MMA, the responsibility for hearing Medicare administrative appeals was transferred over to HHS, with OMHA reporting solely to the Secretary, HHS. In doing so, the OMHA was placed completely outside of CMS' organizational structure, ostensibly free from any agency pressures that CMS might informally care to exert. This also placed the OMHA independent of the various contractors working for CMS. As a review of the Congressional Record reflects, the issue of independence was carefully considered by Congress and the separation of the OMHA from CMS was consistent with their concerns. (See Congressional Record, V. 149, Pt. 22, November 20, 2003 to November 23, 2003, Page 30400). As set out in the June 23, 2005 issuance of the Federal Register (70 Fed.Reg. 36386), titled "Office of Medicare Hearings and Appeals; Statement of Organization, Functions, and Delegations of Authority," the OMHA is under the direction of a Chief Administrative Law Judge who reports directly to the Secretary, HHS. This organizational structure was specifically intended to meet the "independence" requirements of the Section 931(b)(2) of the MMA. What Can You Expect: In terms of functional authority, ALJs are comparable in many respects, to that of an Article III Judge, who is appointed by the President and confirmed by the Senate. While ALJ's are not Article III Judges, it has been our experience that they are strongly independent, adjudicating over Medicare proceedings in a formal, professional fashion, similar to what you would expect to encounter in a Federal District Court proceeding. Pursuant to 42 C.F.R. § 405.1026, ALJs cannot even conduct a hearing if they are prejudiced or partial to any party, or if they have an interest in the matter pending for resolution. To date, we have not seen an ALJ that has been "prejudiced or partial to any party." To be clear, health care providers do not always prevail – every case stands or falls based on its merits. Moreover, just because you have experienced a positive outcome with a particular ALJ on one occasion does not mean that you should expect a similar result when you are next in front of the same judge. ALJs are trained to weigh the facts and the evidence. While in past years it was rare for CMS or its contractors to participate in a hearing, it is now commonplace for representatives of the Zone Program Integrity Contractor (ZPIC) or the Program Safeguard Contractor (PSC) to now attend the hearing and seek to provide support for their initial denial actions. As a result, the job of ALJ is now more complicated than ever. In summary, the current administrative appeals system has been specifically designed to insulate ALJs from the actual and / or implied pressures which could conceivably be exerted by CMS and its various contractors. When appearing before an ALJ, it is important to remember that the process has become significantly more complicated now that CMS contractors are now regularly attending and participating in the process. In light of these changes, it is recommended that you engage experienced legal counsel to represent your interests in an ALJ hearing. Although the system and its Judges are set up to provide a fair opportunity for you to present your case and be heard, it is much more difficult to prevail when up to three representatives of the ZPIC (a lawyer, a statistician and a clinician) are also participating in the proceedings, providing support and explanations for their prior Medicare claim denial decisions. Liles Parker attorneys have extensive experience representing a wide variety of Part A and Part B providers in the administrative appeals process, including the ALJ hearing stage. Please feel free to contact us for a complimentary consultation. We can be reached at 1 (800) 475-1906.
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