we have little data on the alj level 3 appeals at this time. the majority of our appeals are turned over in level 1 or level 2. i will just comment that i think the 2010 data is, i think, the rac process, and observation care has evolved enormously in the last four years that i think it's worth looking at a new set of numbers and data. we know that the rac recovery rate for back to the government has increased, we know the number of rac audits has increased that is why there's a hold on further audits and appeals. we know it's a lot due to rac denials. and so i think we really do need to look at a fresh set of numbers before we start thinking about a 7% number. i can speak on behalf of our hospital, we appeal everything and win almost everything. in our last year, we appealed 92% of the audits that the racs made and we were winning 2/3 of them and the rest are in level 1 or level 2 of the appeals. i think there's a lot of hospitals out there that are similar. >> that's good piece of information, thank you so much. others want to weigh in to that

and then the 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 problem, 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 appellants, a reverse previous lower level decision. what is the current rate? >> and are you asking about the rac decisions, the rac appeals or just overall -- >> just overall. >> -- overall otrs? all right. in 2014 fully favorable otr rate for the fiscal year to date is 193%. >> gotcha. -- 19.3%. >> gotcha. now, has omha conducted an

. >> can you describe the different types of appeals held by the alj? >> yes, we hear both part a and part be appeals under medicare and we also hear the part he appeals as part of our original charge. the prescription drug appeals. we hear appeals on entitlement. we also hear the part b medicare advantage appeals. >> in percentage of those, which you hear most often those appeals for aljs? >> well come in various. in recent years a pretty significant number of appeals in part a, which is the acute care hospital appeals. >> and those that have been -- would you say 30, 40, 50% of the time with the alj workload? >> i can get you that number. hold on just one minute. >> trends help you out, being a health care provider you always look at trends about what is happening. so it gives you a workload basis of which two delegate resources two. >> most of our recovery audit appeals have been part part a and you can kind of use that as a gauge. in 2014, 41.2% -- and sorry. at the wrong number in there. 54.2% to date for recovery audit appeals and those are predomi

we will visit with the aljs on this. the fourth level is what? they disagree with aljs and then what? >> there is another level they can go to which is i think a federal district court level. i'm sorry, the the departmental pills board and then after that the district level. >> said that his fifth level? >> yes. >> thank you. i wanted to get the context for everyone. >> i guess my question is let's look at part b only. what is the overturned rate for that? which would include some of the other stuff. >> i got a report here from your office on april 2nd 2014 bits as the overturned rate is about 52%. is that correct? is the report correct for their off this? would be about 52% for dme overturned rate? >> it depends what level you are looking at. if you look at all dme claims, it is about 7.5% of all overpayment determinations. >> we are talking about on the appellate part. said those hearings and appeals says the overturned rate is 52% is either fully favorable or partially favorable. 24.87 was unfavorable. and so with that he would indicate the ove

and so many of these denials could be eliminated if, and getting a reverse on the alj. is there feedback going back down to the cms saying just because the exact words do not appear in the surgeons note that the patient is an amputee doesn't mean that you deny these because if you look it says the physician is saying they need a prosthetic and we pay them to -- a limb. are you looking at different records? because you know. >> nell -- no as a general record we review the record and there are some exceptions to that which allows additional representatives at the alj level that we are supposed to be designing things on the same record. what does change significantly is we do have a hearing and so at our level we are able to question the provider supplier, receives some explanation and then make a decision that becomes part of the evidence that's in front of us. >> my understanding is that the editors are not allowed to consider their professionals notes that those notes are considered part of the physician's's record and may show up under the physician's record so the pers

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

the department will also bring back a retired alj in pittsburgh to focus predominantly on black lung cases. in addition, we are instituting a number of efficiencies that we believer will increase the productivity -- we believe will increase the productivity of aljs and speed up the black lung cases. nevertheless, the department's outreach efforts to miners whose claims included dr. wheeler's interpretations are likely to result in a significant number of new claims. and even without this recent outreach effort, the number of claims filed in 2014 is projected to increase by 10.6%. in conclusion, let me assure you that the department of labor is committed to improving the effectiveness of these programs, and is we look forward to working with the subcommittee on this important effort. thank you. >> thank you, deputy secretary lu, and i want to explain that because you and solicitor smith are in the same d., you've submitted -- d., you've submitted joint testimony. so there's joint written testimony, but only one oral testimony. of course, solicitor smith will be available for questions.

because the addition of 17 new a lj is, talk about -- aljs. talk about the simple math that was referenced. there's 500,000 appeals that would be backlog by the end of this year. you divide that by 1220 and you're working at optimal levels and i don't know that you could do any more than that. frankly, i do know that we want you to do more than that because giving less than two hours to every case is probably unfair and would be slipshod. that would suggest we need 410 new aljs if we wanted to get rid of that backlog in a year. 410 and you have asked for 17. or you have given 17. so we're basically saying to all the providers out there, suck it up. excuse my language but that's basic we what we're saying to the but we are saying that we are not willing to deal with this backlog in the reality that we are putting blinders on, we'll add a few more and cross our fingers and hope that with a few new reforms that you put in place, that is not going to reduce it, will not be back next year with the same discussion. so how would you comment to that? >

so the other way is to hire judges who retired and they are called rehired senior aljs. those individuals are also on the list that is made pain by opm. they can be hired a couple of years and then let go. beyond that, and alj appointment is simply a life appointment except for removal for a good cause. after a hearing. >> so how large is this list of retired aljs? >> how many were there? probably around 100. it's not a tremendously long list. you know, we do have that. we requested it in april because we do think that temporary capacity as a part of this solution to deal with the backlog. now when you're talking about projected receipt levels, i do think we need to be appropriately staffed for what we anticipate to be coming in. so i don't know if that is helpful, but aljs are non-probationary when you higher up under the aca. there is no probationary period. there are no performance reviews. and they can't receive awards. so those are kind of the things that make them different from other government employees. >> at the gentlewoman would heal, i want to follow up becaus

griswold ,-com,-com ma because i've had some great conversations with folks who did the alj. there seems to be a very compassionate desire to fix the problem. so that is what we're looking for here today. my other concern in the concern of the american people is this whole process in terms of when we go after waste fraud and abuse, if we cast such a wide net, we are taking the decision-making away from doctors, health care providers, hospitals, many people could make their decisions who are trained, who put years of training to do that. and we are transferring the decision-making capability because of reimbursement to actually appear a crowd. 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 into washington d.c. i think polls which show that to be the fact as well. so what i'm looking for specifically will be difficult i know because you are all part of an agency. but there's this wall of separation is somehow goes out. the american people don't understand. they all see a part of or part of cms and yet you have a wa

griswold, because i've had some great conversations with really folks within the alj. there seem to be a very -- seems to be a very compassionate desire the fix the problem, so that's what we're looking for here today. my other concern, though, and i think the concern of the american people is this whole process of in terms of when we go after waste, fraud and abuse, if we cast such a wide net, then 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 unders

>> the agency has targets, or goals toward which they want to see the alj's work. those targets were developed by chief judges who in fact have held cases. they have -- the agency has about seven years' experience now. the majority of our alj courts do in fact reach that target. somewhere between 500 and 700. the reason i say it's not a quota, no one gets disciplined because of their failure to reach that number. it's just a goal we work toward. we are a production agency. our first priority is accuracy, quality, to make sure that the decision is policy compliant and legally defensible. we know it's a high volume business when we train aljs, we mention that to them. we have as in any other organization some who meet that, and some who go above it, and some who don't meet it. it is not a quota. >> thank you for that. it seems, talking to them, that it feels to them, to many of them it feels like a quota. i just hope you will sit down and find a way to open up communications with them. and again, reinforce what you said to this committee right now that it's not a quot

first, we support the alj appeal reforms outlined in the november, 2012 hhs office of the inspector general report. second, we support education to increase support. lastly, we support increased dialogues to improve the direction of the program. we are pleased to be a part of the dialogue today. i appreciate the opportunity to appear before you all today and would be pleased to answer any questions that you may have. >> thank you, dr. siey. >> thank you for the opportunity to testify today on observation status, the to midnight rule and related issues. i'm a physician in madison, wisconsin. i'm a hospitalist, which is a physician who cares for patients primarily in the acute care setting. i'm also a member of the association that represents the nation's more than 44,000 hospitalists. to a physician and a patient, the care provided is indistinguishable, but is considered out-patient not covered by medicare, part a. many beneficiaries ask how they can be outpatients. many ask me to change them to in-patient which is something i cannot do. the centers for medicare and medicaid services describ