Hospitals Celebrate Major Victory in Fight Related to RAC Appeals Backlog

Hospitals Celebrate Major Victory in Fight Related to RAC Appeals Backlog


Yesterday, the Court of Appeals for the D.C. Circuit reversed the lower court’s dismissal of a lawsuit seeking a writ of mandamus, a court order compelling  the Department of Health and Human Services (HHS) to work more quickly through the ever growing backlog of administrative appeals stemming from HHS’s Recovery Audit Contractor (RAC) program.  

By way of background, the American Hospital Association (AHA) filed suit in 2014, accusing HHS of unreasonable delay in scheduling administrative  appeals from RAC audits, and seeking a writ of mandamus directing HHS to schedule appeals within the required time frames.  In December 2014, the D.C. District Court dismissed the case, stating that there were not sufficient grounds to award a writ.  The AHA appealed. 

The Circuit Court disagreed, finding that this case met the criteria for an award of a writ of mandamus, and that a writ could be issued.  The court focused on the fact that the statutory language set forth “mandatory” deadlines that HHS had failed to comply with.  The court rejected the government’s argument that even though it failed to comply with these deadlines, the fact that a provider could “escalate” their appeal  provided an adequate alternative remedy to the inability to get a timely hearing. 

Importantly for providers, in reaching its ruling, the Court of Appeals focused on two salient facts. 

  1. The vast majority of these appeals were decided in favor of providers, citing statistics put forth by the AHA that “66% of these appeals that had been completed were successful.” 
  2. The court focused on the potential harm wrought by these delays, citing examples of hospitals that were unable to invest in new equipment and facilities because of money tied up in RAC appeals.   

These issues aren’t confined to delays stemming from RAC appeals.  Providers often face similar delays with regard to other administrative action, including appeals of Zone Program Integrity Contractors (ZPIC) re-determinations and final determinations of the validity of a “credible allegation of fraud.”  The effects of delays in these areas can be just as onerous. 

This decision gives providers a strong argument to challenge inaction or inattention with regard to any of these administrative determinations of appeal steps.  While any challenge needs to be carefully considered based on the merit of the appeal and the overall posture of the issue, providers should be mindful of the usefulness of a writ of mandamus. 

The decision can be found here

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