The right to appeal disappears: Where is the outrage?

ByDavid M. Glaser, JD

You always have a right to go to court to challenge a government decision, right? Wrong. One element of the health reform bill is to explicitly prevent any judicial or administrative review of a number of decisions by Center for Medicare & Medicaid Services (CMS). This should have sparked outrage; but a year after the bill has passed, no one is talking about it.

For example, the provision on accountable care organizations (ACOs), has the following six items that may not be challenged administratively or judicially:

the specification of the quality standards;
the assessment of the quality of care furnished by an ACO and the establishment of performance standards;
the assignment of Medicare fee-for-service beneficiaries to an ACO;
the determination of whether an ACO is eligible for shared savings . . . and the amount of such shared savings, including the determination of the estimated average per capita Medicare expenditures under the ACO for Medicare fee-for-service beneficiaries assigned to the ACO and the average benchmark for the ACO . . .;
the percent of shared savings specified by the Secretary [of Health and Human Services] . . . and any limit on the total amount of shared savings established by the Secretary under such subsection; and
the termination of an ACO [for lack of quality standards].

(For the detail-oriented, this provision is found in section 1899(g) of the law.)

The right to challenge a government decision is fundamental. As a result, any limitation on a challenge seems un-American but, if the only prohibition was limited to the amount of savings that would be returned to the ACO, perhaps I wouldn’t bother to object. But taking away the right to challenge termination of an ACO for breach of a quality standard? That is horrific. Under the law, the decisions of CMS are final and not subject to review by any court or outside body.

The trend toward limiting the ability to challenge the government has been developing over time. There is a principle in the law that requires you to “exhaust your administrative remedies” before you may seek relief from a court. If you have a dispute with a government agency, you must work within the agency before a court will take jurisdiction of your claim. Courts like this principle because it lowers their workload; it is possible that the agency will reverse its decision, saving the court from having to rule. Unfortunately, in this context, it often has the practical effect of preventing any review of a decision.

A few years ago, the U.S. Supreme Court heard an appeal from nursing homes in Illinois. The representatives for the nursing homes thought that some of the policies applied to nursing homes during licensing surveys exceeded the authority of CMS. A trade group sued to prevent CMS from enforcing the policy.

A district court refused to hear the challenge, saying that until CMS actually enforces the rules, the nursing homes couldn’t come to court. However, if the nursing homes were to wait for CMS to actually enforce the rule, they would risk being shut down for noncompliance. The nursing homes feared that they may be closed while waiting for a court to rule.

The court ruled that the nursing homes had to violate the policy, take whatever punishment CMS determined, then appeal from that decision, rather than seeking a court’s opinion first. The only glimmer of hope in the case is a hint that if the court thought it was likely that CMS would actually close the nursing homes, making the harm irreparable, the court might have ruled differently.

Why should you care? Because the same thing can happen with an ASC or an MRI. CMS may adopt a policy that seems incorrect. Under current law, you can’t go to court to challenge the rule until after CMS cites you for violating the rule. Courts will not prevent CMS from enforcing the rule. That situation, while offensive and scary, is much better than the new situation with ACOs. While the principle of exhaustion of remedies means you can’t challenge CMS before they enforce the law, at least you can seek court review after the citation is issued.

The new ACO law prevents any challenge to the determinations of CMS. Such a star-chamber provision is something one would expect to find in a strong-arm dictatorship, not in America. When I have mentioned this situation in speeches, not a single audience member has heard of the provision. No one seems to be talking about it. That needs to change. The right to appeal is slowly being taken away, and no one is complaining. Let’s fix that.

The political right and the left may disagree on the merits of single payor, mandated insurance and other policy nuances, but everyone should agree on the right to challenge a governmental decision in the courts. Buried in the health reform bill are attempts to limit that access. Time to unbury them.