Bill to expedite Medicare appeals expected to cost $1.7 billion

The AFIRM Act was introduced by Sen. Ron Wyden (D-OR), along with Sen. Orrin Hatch (R-UT), in December
The AFIRM Act was introduced by Sen. Ron Wyden (D-OR), along with Sen. Orrin Hatch (R-UT), in December

A bill that aims to ease the overwhelming backlog of Medicare appeals would cost the federal government more than a billion dollars, according to a cost estimate released Tuesday.

The Audit & Appeals Fairness, Integrity, and Reforms in Medicare Act (AFIRM Act) of 2015 would cost $1.7 billion over the next ten years if it is passed in 2016, the Congressional Budget Office estimated in its report. The bill was formally introduced in December by Finance Committee Chairman Orrin Hatch (R-UT) and ranking member Ron Wyden (D-OR).

In addition to the $1.7 billion, tangential costs of $35 million would hit taxpayers over the same decade, CBO said.

Much of the money would go toward claims hearings and appeals activities, including the development of an expedited appeals process and a new Medicare magistrate program to review small claims cases. Cases involving under $1,500 in claims would be handled by the magistrate program, while larger cases would go to administrative law judges.

The AFIRM Act would require the Centers for Medicare & Medicaid Services to create an online portal for providers to monitor the status of their claims. The portal would cost approximately $5 million to create between 2017 and 2018, and $500,000 to maintain each year after.

The bill would create an ombudsman position to help providers clear up appeals issues and educate them on the appeals process. Creating that position would cost $18 million between 2016 and 2026, CBO officials said.

Last week, a court ordered a review of the Medicare appeals backlog to decide whether the situation is dire enough to require the Department of Health and Human Services to adhere to a 90-day deadline for ALJ appeals. The average wait time for ALJ appeals was 572 days at this time last year.