Bush seeks to reduce Medicare appeals cases


WASHINGTON - The Bush administration says it is planning major changes in the Medicare program that would make it more difficult for beneficiaries to appeal the denial of benefits such as home health care and skilled nursing home care.

In thousands of recent cases, federal judges have ruled that elderly people with severe illnesses were improperly denied coverage for such services.

In the past year, Medicare beneficiaries and the providers who treated them won more than half the cases - 39,796 of the 77,388 Medicare cases decided by administrative law judges. In the past five years, claimants prevailed in 186,300 cases, for a success rate of 53 percent.

Under federal law, the judges are independent, impartial adjudicators who hold hearings and make decisions based on the facts. They must follow the Medicare law and rules but are insulated from political pressures and sudden shifts in policy made by presidential appointees.

President Bush is proposing legislation and rules that would limit the judges' independence and could replace them in many cases.

The administration's draft legislation says, "The secretary of health and human services may use alternate mechanisms in lieu of administrative law judge review" to resolve disputes over Medicare coverage.

Under the legislative proposal, cases could be decided by arbitration or mediation or by lawyers or hearing officers at the Department of Health and Human Services. The department recently began testing the use of arbitration in Connecticut under a law that permits demonstration projects.

Tommy G. Thompson, secretary of health and human services, said the proposed legislative changes would give his agency "flexibility to reform the appeals system" so that the government could decide cases in a more "efficient and effective manner."

The department said there was an "urgent need for improvements to the Medicare claim appeal system," in part because the number of appeals was rising rapidly.

Consumer groups, administrative law judges and lawyers denounced the proposals. Judith A. Stein, director of the Center for Medicare Advocacy in Willimantic, Conn., said, "The president's proposals would compromise the independence of administrative law judges, who have protected beneficiaries in case after case, year after year."

Beneficiaries have a stake in the issue. When claims are denied, a beneficiary is often required to pay tens of thousands of dollars for services received.

In a typical case, an administrative law judge ordered Medicare to pay for 230 home care visits to a 67-year-old woman with breast cancer, heart disease and arthritis. Medicare officials had said the woman should pay the cost. But the judge ordered Medicare to pay because the woman was homebound, and the services were "reasonable and necessary."

When federal agencies issue rules or decide cases, they generally must follow the Administrative Procedure Act, a 1946 law intended to guarantee the fairness of government proceedings.

Ronald G. Bernoski, president of the Association of Administrative Law Judges, said: "We see President Bush's proposals as a serious assault on the Administrative Procedure Act, a stealth attack on the rights of citizens to fair, impartial hearings. These hearings guarantee due process of law, as required by the Constitution."

The American Bar Association and the Federal Bar Association, which represents lawyers who practice in federal courts and before federal agencies, have expressed similar concerns.

Health care providers share those concerns.

Robert L. Roth, a Washington lawyer who has represented hospitals and suppliers of medical equipment, said, "The interests of providers and beneficiaries are aligned."

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