we're taking the decision making away from doctors, health care providers, hospitals, many people who make their decisions who are trained, who go to years of training to do that. and we're transferring that decision making capability because of reimbursements to, actually, a bureaucrat. for me, i have a lot more trust in the nurse or the doctor that cares for me than i do somebody that works here in washington d.c. i think that polls would show that to be the fact as well. so what i'm looking for specifically, and it will be difficult, i know, because you're all part of an agency, but there's this wall of separation that somehow goes up that the american people don't understand, that they all see you part of hhs or part of cms. and yet you have a wall, cms has

a wall. what i need to do is have as much finger pointing as possible to say this is what will solve it knowing that i'm not asking you to throw anybody under the bus. as the chairman pointed out, we're looking for legislative fix for appropriations that need to be done so that we can help this to quit being a problem and so we can obey the law the way that it is written. so i thank the chairman, and i yield back. >> thank you, mr. m.d. does. -- meadows. i have additional comments for an opening statement i'll submit for the record to protect our time. i'd like to ask unanimous consent to insert for the record giving disposition outcome rates that was begin to us by the office just last night. like to be able to add this to the record to be able to share with all vims who are -- individuals who are here as

well. i'd i'd like to recognize the gentlelady from california for her opening statement. >> thank you, mr. chairman. you know, i think we can all agree that medicare providers are entitled to have their claims administered fairly, efficiently and without undue delay so that they can focus on their core mission of providing care to our nation's seniors. if they are billing incorrectly, they deserve to know sooner than later. unfortunately, that is not the situation facing providers today. medicare providers appealing payment decisions made by contractors are waiting on average 387 days to have their claims adjudicated by the office of medicare hearings and appeals. for providers submitting new claims, the wait could be as long as 28 months just to have an appeal assigned to an alj. the current claims backlog in

omaha is unacceptable and unsustainable. omaha must make significant changes this how it does business -- in how it does business. i look toward to hearing from the chief judge about the initiatives omaha is implementing to improve efficiency and alleviate the backlog. but i also want to remind my colleagues that the claims backlog is a problem congress created. congress has required cms, appropriately, to be increasingly vigilant in detecting and reducing the amount of waste, fraud and abuse in the $600 billion medicare program that covers 51 million beneficiaries. this emphasis on program integrity is critical both to the health of our nation's seniors and to the protection of our taxpayer dollars. but this increased scrutiny has not been coupled with additional funds to address the influx of claims and appeals that have resulted. with the medicare prescription drug act, congress created the

medicare administrative contractors, the zone program integrity contractors and the recovery auditor contractors' pilot program. in 2010 the program was made permanent and expanded nationwide. all of these contractors conduct audits of medicare providers. each of these contractors have increased the number of claims being audited for payment accuracy in recent years. according to a 2013 gao study, the volume of contractor postpayment claims reviews increased by 55% between 2011 and 2012. more audits means, obviously, more appeals. that is an inevitable result of the additional program integrity functions that we here in congress have asked cms to implement. yet congress has not provided omaha with more funding for more judges to adjudicate claims. so when we wring our hands about the number of days that these

providers have to wait, we have to wring our hands and look directly at ourselves. despite the sixfold increase in the number of appeals since 2006, the number of aljs at omaha has remained relatively constant. in 2007 with omaha received 20,000 claims, in 2013 omaha received 192,000 claims, yet received no additional funding to handle this workload. i joined a number of my colleague on both sides of the aisle in sending a letter to the secretary of hhs citing concerns about the program and expressing the need for reform. but it's also important to note that these have led to the exposure of many questionable billing practices such as billing for hospital readmissions on the same day with the same diagnosis, durable medical equipment items delivered but never ordered by a physician, hospital claims coded with illness a patient did not

possess and excessive units of medication orders especially where the billed dose would be harmful or lethal to the patient who received it. we may need to consider reforms to the program that reduces the administrative burden of audits on providers, but we must also insure we preserve the central integrity functions of the rak who perform the critically-important congressionally-mandated function of reducing improper payments in the medicare program. finally, an important part of reducing the burden on providers is insuring that appeals from adverse -- [inaudible] are add adjudicate inside a timy manner. we have to give omaha the resources commensurate with the workload that we have asked them to perform. and with that, i yield back. >> members will have seven days to submit additional statements if they choose to add statements for the record.

ms. griswold, you are the sole individual in this hearing today, and we are grateful that you are here. pursuant to all committee rules, all witnesses are sworn in before they testify. if you would please stand, raise your right hand. do you solemnly swear or affirm the testimony you're about to give will be the truth, the whole truth and nothing but the truth, so help you god? thank you. you, of course, may be seated. ms. griswold, the chief administrative judge at the department of health and human services offices of medicare hearings and appeals, and we are very grateful that you are here to have this conversation. we'd ask you to limit your oral testimony to five minutes. of course, your written testimony we've already received and will be a part of the record as well. we have not called for votes yet, so we're not in a hurry. you may begin. >> chairman lankford and members of the subcommittee, i i want to thank you for the invitation to discuss the workloads to have office of medicare hearing and appeals.

omha administers the administrative law judge hearing program and is responsible for conducting the third level of review of medicare appeals. in order to insure that omha's adjudicators have independence from cms, it was established as a separate agency within the department of health and and human services and reports directly to the secretary. accordingly, we operate under a separate appropriation, and we are both functionally and fiscally separate from cms. between fiscal years '11 and '13, what had previously been a grammal, upward trend took an unexpectedly sharp turn. and omha experienced an overall 545% increase in our appeals. the the rise in the number of appeals resulted both from increases in the number of beneficiaries utilizing covered services and also from the expansion of omha's

responsibility to include the adjudication of appeals resulting from new audit workload undertaken by cms including the nationwide implementation of the recovery audit program. there have also been increases in medicaid state agency appeals. we are pleased that omha's 2014 enacted funding level has allowed for the hiring of seven additional teams bringing adjudication capacity to 72,000 appeals per year. however, this capacity pales in comparison to the adjudication workload n. fiscal year '13 alone, omha received 384,151 appeals, and in '14 through july 1st approximately 509,124 appeals. as a result, omha had over 800,000 appeals pending on july 1 of 2014. although alj team productivity has more than doubled from fiscal year '9 through '13, omha

has been receiving approximately one year's worth of appeals every four to six weeks. driving adjudication time frames to their current high of 387 days. omha recognizes the need to adjudicate appeals with greater efficiency. but by the end of the fiscal year, we will release a manual which utilizes best practices to standardize our business process. we are using information technology to convert our process from paper to electronic, an effort which will culminate in its first release in the summer of 2015. we have also developed a template system which simplifies the work of our staff by providing standardized, fillable formats for routine word processing. omha also proposed, and former secretary sebelius established, a departmental, interagency work group which conducted a thorough review of the appeals process and developed additional initiatives that both omha and

cms are currently implementing. on june 30th omha posted two new options for its apell hasn'ts. the first allowed appellants to have their claims adjudicated using statistical sampling methods. the second option uses alternative dispute resolution techniques during a facilitated settlement conference. finally, omha has redirected the efforts of its senior attorneys to assist in the prioritization of beneficiary appeals. any beneficiary who believes their case is not receiving priority consideration at omha may contact us directly at medicare.appeals@hhs.gov or at our toll-free number, 855-5 855-556-8475. although omha is functionally and organizationally separate, i can provide a general outline of initiatives undertaken at cms.

these include beginning global settlement discussions involving similarly-situated appellants, requiring the new recovery providers to offer a 30-day discussion period, allowing for recovery audit payment only after a qualified independent contractor has determined overpayment exists, issuing a proposed rule requiring prior authorization for certain durable medical equipment and requiring prior authorization for two particular part b services under cms' demonstration authority. although the department is working to address the backlog and the number of perspective appeals, the initiatives that i've discussed today will be ip sufficient to close the gap between workload and resources at omha. although all workloads have experienced rapid growth, a significant portion of the increase is a consequence of the department's effort to implement legislation designed to combat medicare fraud and to reduce

improper payments. the department is committed to crafting solutions which will bring these efforts and the resulting appeal workload into balance. we look forward to working with this committee and with our stakeholders to develop and implement these solutions. i thank you for your time and concern. >> chair recognizes dr. gosar for questioning. >> thank you, mr. chairman. mrs. guess world, -- griswold, can you walk us through the five levels of medicare appeals process? >> yes. the first two levels are conducted at cms. they are administered by cms and cms' contractors. they, the third level is at the office of medicare hearings and appeals and is can conducted by -- and is conducted by administrative law judges. the fourth level is add the medicare appeals council which is part of the appeals board and is also a separate agency within health and human services.

and the final level is with the federal district courts. >> gotcha. can you describe the different types of appeals heard by the aljs? >> yes. we hear both part a and part b appeals under medicare, and we also hear the part d appeals. this was part of our original charge, the prescription drug appeals. we hear irma appeals, we hear appeals on into it almosts -- entitlements. we also hear the part c medicare advantage appeals. >> in percentages of those, what do you hear more often, most off in those appeals for aljs? >> well, it does, it varies. in recent years we have heard a significant number of appeals under part a which are the acute care hospital, the acute hospital appeals. >> and does that happen, would you say, 30, 40, 50% of the time? in an alj workload?

>> i can get you that number. hold on just one minute. >> i mean, trends really help you out trying to figure out what the, you know, being a health care provider, i mean, you always look at trends about what's happening. so that gives you kind of a workload basis which to delegate resources to. >> most of our recovery audit appeals have been part a, and so you can kind of use that as a gauge. in 2014 41.2% -- oh, i'm sorry, i have the wrong number there. 54.2% to date were recovery audit appeals, and those are predominantly those part a appeals. >> part a. so 50 -- according to hhs office of inspector general in 2010, 56% of the appeals were decided as fully favorable to the

appellates, a reverse previous lower level decision. what is the current rate? >> and are you asking about the rack decisions? the rack appeals or just overall -- >> just over all. >> -- overall otrs? all right. in 2014 the fully favorable otr rate for the fiscal year to date is 19.3%. >> gotcha. now, has omha conducted an analysis on what factors are really driving this backlog? you made mention of a few of them, but i'd like to be a little bit more specific. >> there are a number of things. all of our workloads are going up. we track what we call our traditional workload which is, you know, the part a/b workload. we also have been tracking the

rack workload, and we've tracked the dual eligible or medicaid and medicare beneficiary workload. all three of those have been going up. the traditional workload has been driven largely, partly by demographics. i mean, there are just more beneficiaries on the rolls who are utilizing more services. it has also been driven by increases in cms' audit efforts, zone program integrity contractors, identification of improper payments. anything that results in more denials at lower levels is going to result in more appeals at the alj level. of course, the recovery audit program is the one that gets a lot of attention. it was a new program in 2010, so it was a start-up, and the increase in receipts in that program was, of course, dramatic. that occurred primarily at our

level between 2011 and 2013. that's when we saw the largest spikes in that workload. we've also seen increases in this dual-eligible workload, beneficiaries that are eligible for both medicare and medicaid. and those workloads have gone up as well. >> i thank you, and i yield back, mr. chairman. >> ms. sphere and i are going to rear is our questions -- reserve our questions until after the vote. >> thank you, mr. chairman. ms. griswold, is it not true that the efficiency of your add 1kwr50ud caters has actually increased? you're handling more cases per adjudicator on an annual basis, is that not true? >> it is true. >> all right. so you're actually more efficient by 20% if you really look at the the real numbers that your adjudicators are actually being a lot more efficient than they've ever been before.

>> well, and since 2009 our adjudicators have actually doubled their productivity. >> right. and so if we look at that, this is not a problem of ad morive law judge -- administrative law judge just sitting back eating bonbons. >> no. >> okay, all right. >> we have a very -- >> i think we can both agree on that. at this particular point, and you've dope your homework, you've -- you've done your homework, you've looked at the previous hearings, would you say an estimate under our current rates right now based on the estimates of potential backlog of cases, i guess, was in the budget assessment that we got, that that is an 8-10 year backlog to adjudicate them paced on current staffing -- based on current staffing and current workload? efficiency? >> i think if you do the simple math which is -- >> i'm a simple guy. simple math. >> divided by adjudicators, you

know, of course, that is the number you come up with. it does not, however, take into account the efficiencies that we are putting in place, the initiatives both at cms and within our pilot program. >> so, granted, you have got the -- i saw a guy smiling, so he's part of your efficiency thing there. and i see that. and so i'm encouraged by that. you are familiar with the fact that the law says that you're required to have a 90-day turn around. that's the law. >> yes. that is -- >> that is the law. >> -- the statute end visions a 90-day processing -- >> yeah. and you're also familiar with the fact that the intent of congress was to have that 90-day turn around. >> yes. >> okay. because -- go ahead. >> i was just going to say, i think that's part of why omha if you look back at the legislative history, that's part of why we

were established in the first place, was to deal with processing delays in medicare cases that existed in social security. >> and you are familiar with the fact that you, because the intent of congress is that there is a law out there that authorizes you to take monies from other trust funds to do three things; hire additional administrative law judges, provide additional training and increase the staff at the department of appeals board, those three things. you are familiar with that. >> i think you're talking about the reprogramming authority. >> well, it's public law 108-173, subtitle d if your counsel would like to look at it. i mean, i've got a copy of it. but with that, even the budget requirement or request that you guys have made, i guess, require for additional seven units, is that correct? >> we, our fiscal year '14 --

>> yeah. >> -- level allows for seven additional -- >> so what are we doing on 2015? >> the president's budget -- >> yeah. >> -- for 2015 would give us an additional 17. >> right. >> -- teams. >> so i've done the simple math based on the president's budget and based on where we are. and does that get you to 90 days? >> no. >> okay. does it get you to, does can it get you to less than three years? the answer's no. >> well, the initiatives -- i want to qualify that. if we're talking about given current, current authorities and current funding, then the answer is, no. >> well, your request. it's the president's request. so your request at this particular point, how many years would somebody have to wait for justice? >> i think it is --

>> 5.3 years? >> i think it is impossible at this point to really pin down how long they will have to wait. >> be okay. >> we are, you know, we do the math as, i think, an outside limit. >> all right. let me close with this then. how many businesses have to go out of business before we start abiding by the law? >> the 90-daytime frame that's envisioned -- >> 9046 day law. it is law. i can give you a copy. 90-day law. >> i also have to point out, and it is in the statute, we recognize that. there is, however, a safety valve this that statute as well which i need to point out which is the right to escalate claims. and i think that also envisions -- do so we just moved the ten-year backlog up to number tour or number five? >> well -- >> that won't work either. i mean, i've looked at their budgets. >> that is what the statute

envisions. >> okay. >> the interesting thing in this, though s that people who have chosen not to escalate. this year we had 152 requests to date which i believe indicates that providers and suppliers are still finding value in our alj hearing process and choose to remain in the queue. >> so your recommendation is for all those that are watching here today to escalate their claims if they're in this ten-year backlog? i can't imagine you would say that. >> no. it is an option for them. >> okay. all right. i yield back. i thank the patience of the chair. >> thank you. we're going to take a recess. votes have been called, so we're headed that direction, and we will recess until the conclusion of the votes. the votes, i would estimate, are going to take somewhere around 30 minutes, maybe a little bit long every. we'll go through, and we will reconvene at that time. >> great. [inaudible conversations]

>> apologize for the delay there with the votes. we do not expect votes to interrupt us. since we're voting about 9:00 is our next vote series. if we're still meeting in our hearing at that time, this would be not a good sign, so we don't anticipate that as well. but i do apologize. the 30-minute they ended up being about an hour and 20 before it was all said and done. we will go back and forth here to be able to process questions. ms. speier, if you're okay, we'll just start turning clocks

off, addressing questions, and i have no particular order. if you want to be able to interrupt during the question time, you're free to do that. ms. griswold, that changes our format some. it won't change yours. we typically do a very structured fife minute time during -- five minute during our opening round. so if you make a statement, the member that asked you the question's not limited to the one who duds the follow up s that fair enough? >> absolutely. i'm here to answer question, so -- >> great. yeah, it won't -- it doesn't change what's happening on your side of the dais at all. i do have a question on the recovery audit appeals work percent increase in non, in the nonrecovery, i should say. i want to be able to go through a couple of these with you. you list out on the disposition outcome rates fully favorable, partially favorable, unfavorable, remanded, dismissed and other.

can you give us a quick definition on what that means to the provider for each of those and the process that happens? fully favorable, obviously, they've overturned the previous two, partially favorable, there's a little bit of a change, i'd like some definition there. unfavorable, basically they lost entirely the previous two. give us partially favorable, what that means, remanded, dismissed and other. >> partially favorable, our appeals consist generally of a number of claims that will be submitted with each appeal. and so a partially-favorable decision would say that some of these claims are payable and some of these claims are not payable. so that would be what -- >> so fully favorable, if a provider comes in and they've got ten different cases in front of you, they want all ten of those, another provider brings in ten cases, they want seven or two. so we don't know if they won one or ten in that case, correct? >> exactly. >> okay. so unfavorable, they lost all of

them. tell us about remanded and dismissed. >> the remanded, we do have some authority to send cases back to the lower level or to the quick if they, there is information that we need from them and that information's only available to, you know, from cms and its contractors. so we can do some limited remands. >> okay. part a that seems to be a very high percentage that's actually being remanded and coming back. do we know what happens then once they go back down to the second level, what occurs? >> well, actually, with most of these they have come back to us, and this large number was related to the part a/b policy issue which was resolved by cms through rulemaking, and so those are coming back to us. >> okay. so help us understand the order there. when you're talking about it's coming back to us and then it went to fourth level; it came back to you? >> yes. >> what does