On February 9, 2016, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit reversed a district court’s dismissal for lack of jurisdiction in the American Hospital Association v. Burwell case.  The lower court must now decide whether to direct HHS to adjudicate all pending administrative law judge (ALJ) claims appeals within 90 days, pursuant to the Medicare statute.

The American Hospital Association (AHA) initially filed suit against the Department of Health and Human Services (HHS) in 2014, asking the United States District Court for the District of Columbia to grant mandamus relief directing HHS to meet its statutory deadline for administrative review of denials of claims for Medicare reimbursement.  The District Court dismissed for lack of jurisdiction, concluding that the appeal delay was not so unreasonable as to justify mandamus. 

On appeal, the U.S. Court of Appeals for the District of Columbia Circuit reversed the dismissal and remanded the case back to the District Court.  In its decision, the Circuit Court recognized that HHS is caught between two congressionally assigned tasks: (1) reaching decisions on administrative appeals within specific timeframes; and (2) implementing the Medicare RAC program, which has contributed significantly to the volume of appeals.  The Circuit Court commented on the extent of the backlog, stating that the problem has gotten “worse, not better.”  Importantly, the Circuit Court concluded that the Medicare appeals statute “imposes a clear duty on the Secretary [of HHS] to comply with the statutory deadlines, that the statute gives the [AHA] a corresponding right to demand that compliance, and that escalation [to the DAB] – the only proposed alternative remedy – is inadequate in the circumstances of this case.”

Accordingly, the Circuit Court determined that the AHA had met the threshold requirements for mandamus jurisdiction, and instructed the District Court to determine whether “compelling equitable grounds” now exist to issue mandamus.  Further, the Circuit Court set out the factors that weigh most strongly for and against mandamus.  Specifically, the Circuit Court explained that mandamus is extraordinary and intrusive, and risks infringing on the discretion of the executive branch.  On the other hand, the opinion stated that “several significant factors counsel in favor of mandamus” including the impact of recouped funds on hospitals’ ability to provide patient care.

The Circuit Court opinion is available here.

Reporter, Lauren S. Gennett, Atlanta, + 1 404 572 3592, lgennett@kslaw.com.