Detailed Information on the
Office of Medicare Hearings and Appeals Assessment

Working to explicitly tie program accomplishment of the annual and long-term performance goals to the resource needs of the organization through conducting marginal cost analysis.

Evaluating the efficiency and effectiveness of OMHA through an independent evaluation that captures the entire scope of the organization.

Improving internal hearing and review processes in order to support 90-day statutory timeline for processing cases.

Measure: Increase percentage of BIPA cases closed within 90 days.

Explanation:The SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) mandates that Administrative Law Judge Medicare cases be proceed within 90 days. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 transferred responsibility of processing claims from SSA to HHS. OMHA began hearing cases in July 1, 2005. GAO reported that between October 2004 and March 2005 SSA averaged 295 days to resolve an appeal. FY 2008 Q2 average appeals processing time for OMHA is 66.5 days. Though the statue requires 90-day processing time, it is impossible to achieve 100% of cases processed in that timeframe due to the complexity of certain cases. The five year goal is to achieve 90% of BIPA cases processed in 90-days. Output measures are used in place of outcome measures for OMHA since its functions are primarily to ensure a timely adjudication of Medicare appeals and compliance with the Administrative Procedures Act and Social Security Act.

Measure: Increase percentage of non-BIPA cases closed within 90 days.

Explanation:The percentages represent the non-BIPA cases closed within 90 days. To assure OMHA meets or exceeds all mandated case processing timelines throughout the Medicare appeals process. Case data are entered into the Medicare Appeals System which is a controlled-access database, with case-specific information. Data used for this performance measure are validated by generating weekly and monthly reports from the database. At the end of the fiscal year, the weekly and monthly report totals are cross-checked with the annual figures. Case processing timeframes for non-BIPA cases are calculated from the time the case was received at the Social Security Administration (SSA) until the Office of Medicare Hearings and Appeals (OMHA) renders a decision causing longer processing times. Performance decreased in processing non-BIPA cases in FY 2006 (47%) to FY 2007 (43%). In a significant number of cases SSA is not in possession of the case file; therefore, OMHA has to reconstruct the file which adds to the 90 day timeframe. OMHA expects the number of non-BIPA cases to continue to decrease in the out years and OMHA will be able to meet and/or exceed its targets. Output measures are used in place of outcome measures for OMHA since its functions are primarily to ensure a timely adjudication of Medicare appeals and compliance with the Administrative Procedures Act and Social Security Act.

Measure: For cases that go to hearings, increase the percentage of decisions rendered within 30 days of the hearing.

Explanation:The percentage represents the cases where a decision was rendered within 30 days of completing the ALJ hearing. To assure OMHA meets or exceeds all mandated case processing timelines throughout the Medicare appeals process. Case data are entered into the Medicare Appeals System which is a controlled-access database, with case-specific information. Data used for this performance measure are validated by generating weekly and monthly reports from the database. At the end of the fiscal year, the weekly and monthly report totals are cross-checked with the annual figures.

Measure: Reduce the percentage of appealed decisions reversed or remanded by the Medicare Appeals Council (as a percentage of all ALJ decisions issued).

Explanation:This measure is used to ensure decisional quality and accuracy at the Administrative Appeal Law Judge Level. Data used for this performance measure are validated by generating weekly and monthly reports from the database. At the end of the fiscal year, the weekly and monthly report totals are cross-checked with the annual figures.

Measure: Average survey results from appellants reporting good customer service on a scale 1-5 at the ALJ Medicare appeals level.

Explanation:To assure appellants and related parties are satisfied with their Level III appeals experience based upon beneficiary survey results. Survey results will be reviewed on a biannual basis. On a scale of 1 - 5, 1 will represent the lowest score and 5 will represent the best score.

Measure: Decrease the cost per claim adjudicated from the previous year by target percentage.

Explanation:To assure efficient operations in all aspects of the Medicare Level III appeals process. Case data are entered into the Medicare Appeals System which is a controlled-access database, with case-specific information. Information from the Medicare Appeals System and the Unified Financial Management System will be used to calculate the cost per claim for each fiscal year.

Measure: Increase number of claims processed per ALJ Team over the previous year by target percentage.

Explanation:To assure efficient operations in all aspects of the Medicare Level III appeals process. Case data are entered into the Medicare Appeals System which is a controlled-access database, with case-specific information. Data used for this performance measure are validated by generating weekly and monthly reports from the database. At the end of the fiscal year, the weekly and monthly report totals are cross-checked with the annual figures.

Is the program purpose clear?

Explanation: The Office of Medicare Hearings and Appeals (OMHA) provides an independent forum for adjudication of Medicare appeals for beneficiaries and other parties in accordance with the requirements of the Administrative Procedure Act and Social Security Act. As required by the Medicare Prescription Drug, Improvement, and Modernization Act (MMA), OMHA is organizationally and functionally separate from the Centers for Medicare & Medicaid Services (CMS). Under direct delegation from the Secretary, OMHA administers the hearings and appeals program nationwide for the Medicare program.

Evidence: The creation of OMHA was mandated by Section 931 of Public Law 108-173, the Medicare Prescription Drug, Improvement, and Modernization Act (MMA). The MMA Weblink is: http://frwebgate.access.gpo.gov/cgi-bin/useftp.cgi?IPaddress=162.140.64.181&filename=publ173.pdf&directory=/diska/wais/data/108_cong_public_laws. MMA transferred the responsibility for adjudicating Medicare Appeals at the Administrative Law Judge (ALJ) level - the third level of Medicare claims appeals - from the Social Security Administration to the Office of the Secretary at HHS. The mission statement is available at www.hhs.gov/OMHA.

Does the program address a specific and existing problem, interest, or need?

Explanation: OMHA hears cases at the third level of appeal, the Administrative Law Judge (ALJ) level. On an annual basis, carriers and intermediaries process approximately 1.2 billion claims for Medicare payment. Of this total, payment is denied for approximately 10%. Beneficiaries, providers, and suppliers have the right to appeal denied claims. Appeal claims submitted for Medicare items and services are denied for a variety of reasons. The most common reasons for denying a claim are: the services provided were determined to be unnecessary for the beneficiary; Medicare did not cover the services; or the beneficiary was not eligible for services.

Evidence: In FY 2006, OMHA received 14,000 appeals (an appeal is the process used when a beneficiary, provider or supplier disagrees with a decision to deny or stop payment for healthcare items or services or a decision denying an individual's enrollment in the Medicare program), representing approximately 100,000 claims (claim is a request for payment for items and services billed under the Medicare program). In FY 2007, the total number of appeals increased to more than 31,000 and the total number of claims increased to 125,000. From October 1, 2007 through February 29, 2008, OMHA has received 11,330 appeals, representing approximately 53,217 claims. Additional evidence includes the FY 2006, FY 2007 and FY 2008 case tracking reports.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: OMHA is the only organization which adjudicates ALJ level (Level III) Medicare cases. OMHA operates in conjunction with the other hearing levels, without being redundant or duplicative. The hearings process specifies a clear distinction between the types of Medicare cases being adjudicated at each agency, and at each level of the appeal process.

Evidence: There are five distinct and unique Medicare appeal levels. The weblink below provides additional information on each level of the appeal process http://www.hhs.gov/omha/levels/index.html . The first level of appeal, called a redetermination, is heard by the appropriate Medicare carrier or intermediary. If the carrier or intermediary renders a decision upholding the denial of payment, the provider, or beneficiary may then request a second level of appeal. This second appeal, called reconsideration, is conducted by a Qualified Independent Contractors (QIC). If a QIC upholds the denial, the provider, supplier or beneficiary may then submit a third level of appeals process, to an ALJ level. If the appellant is not satisfied with the decision at the ALJ level of appeal, the appellant may appeal to the fourth level, the Medicare Appeals Council (MAC). If the appellant is not satisfied with the decision by the MAC, the final level of appeal is a lawsuit filed through the Federal District Court.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: There are no major design flaws that limit OMHA's effectiveness and efficiency. OMHA's program effectiveness is demonstrated by its ability to process Medicare appeals within the 90 day timeframe, as specified by law. The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), mandates that ALJ-level Medicare appeals be heard within 90 days after receipt of a request for hearing from a Medicare appellant.

Evidence: Currently, OMHA processes appeals in 66.5 days, on average. Section 521 of BIPA included major revisions to appeals procedures at the ALJ level for the original Medicare plan beneficiaries. It imposed a 90 day time limit for conducting ALJ appeals, lowered the amount in controversy, and allowed appellants to escalate an appeal from the Qualified Independent Contractor (QIC) to the ALJ level if the QIC did not meet its 30-day timeframe for issuing a determination. OMHA is charged with implementing these changes in order to improve the appeals process by significantly reducing the number of days it takes to adjudicate an appeal case. The statutory language to this act can be found at the following weblink: http://thomas.loc.gov/cgi-bin/query/F?c106:1:./temp/~mdbsLWg1xz:e217024

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The program's resources are effectively targeted so that intended beneficiaries' cases can be processed within the legislatively mandated time frames. In establishing the headquarters and field offices for the OMHA, there was careful review of historical data from the Social Security Administration to identify the optimal locations for these offices. The OMHA office locations are organized around HHS Regional Offices since Medicare contractors and providers are familiar with the HHS regional structure. The offices' workloads are determined by their respective HHS Regions. This allows OMHA to provide appeals that are accessible to appellants and beneficiaries while remaining within the legislatively-mandated 90-day timeframes. An extraordinary large number of ALJs would be required to travel from location to location to hear cases, thus OMHA has effectively implemented a video-teleconferencing (VTC) infrastructure to provide beneficiaries with expedited hearings at sites across the nation. In addition, workload across the Field Offices is constantly accessed and redistributed to more timely meet OMHA's purpose while providing convenience and courtesy to the appellants and beneficiaries.

Evidence: Section 931 of the MMA requires the Secretary of HHS to "provide for an appropriate geographic distribution of administrative law judges. . .throughout the United States, to ensure timely access to such judges." In addition, the legislation directed HHS to consider the feasibility of "conducting hearings using tele- or video-conference technologies." VTC technology, which is now commonly used throughout the country in courtrooms and for telemedicine, plays a critical role in OMHA's ability to both meet the BIPA timeframes and provide expanded access for appellants to ALJ hearings. In FY 2007, 95% of hearings were held either via teleconference or VTC. Additional evidence includes the OMHA Organization Chart which can be found at the following weblink: http://www.hhs.gov/omha/about/charts/index.html

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: OMHA adopted three long-term output measures that balance the need to ensure appellants have access to timely hearings with the need to demonstrate effective stewardship to the American taxpayers. The SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) mandates that Administrative Law Judge (ALJ) Medicare cases be processed within 90 days. As such, OMHA has developed two long-term measures related to this legislative mandate: to maintain a 90-day adjudication rate for all BIPA cases, and to maintain a 90-day adjudication rate for all non-BIPA cases. In FY 2008, OMHA decided to add a third long-term measure to ensure that as cases are being processed within the 90-day timeframe, customer satisfaction and quality remain high. To this end the long-term measure to gauge whether an appellant experienced good customer service has been adopted. Output measures are appropriate for OMHA since its functions are primarily to ensure a timely adjudication of Medicare appeals and compliance with the Administrative Procedures Act and Social Security Act.

Evidence: OMHA Strategic Plan, Fiscal Years 2007 - 2012, Performance Measurement, pages 11-12. The long term measures include the following: Increase the percentage of BIPA cases closed within 90 days; Increase the percentage of non-BIPA cases closed within 90 days; and Average survey results from appellants reporting good customer service on a scale of 1 -5 at the ALJ Medicare Appeals level.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: OMHA has established two measures that support the long-term goal of adjudicating all cases within a 90-day timeframe. Adjudicating cases within this statutory deadline is a daunting task. Cases previously heard by the Social Security Administration could take up to a year to adjudicate. Thus, the ambitious statutory timeline along with increased workload and changing demographics demonstrate that a 16% increase for BIPA cases and 12% increase for non-BIPA cases over six years was both challenging and achievable. In FY 2008 OMHA decided to include a third long-term measure to ensure customer satisfaction as claims continue to be processed in less time. While targets have been set, the baseline for this measure is not expected until FY 2008.

Evidence: The Performance Management Section, pages 11-12, of the OMHA Strategic Plan, Fiscal Years 2007 - 2012 includes OMHA's long-term measures. The Outputs/Outcomes Table in the FY 2009 Congressional Justification identifies OMHA's long- measures and established targets. The long-term measures include the following: Increase the percentage of BIPA cases closed within 90 days to 90% by 2012; Increase the percentage of non-BIPA cases closed within 90 days to 59% by 2012; and Achieve average survey results of 3.3 or above from appellants reporting good customer service on a scale of 1 -5 at the ALJ Medicare Appeals level by 2012. External factors expected to impact OMHA's caseload include legislative action and demographic changes. OMHA is expecting an increase in workload due to Section 302 of the Tax Relief and Health Care Act of 2006 (TRHCA), in which Congress required HHS to make the Recovery Audit Contractor (RAC) program permanent and nationwide no later than January 1, 2010. In addition, U.S. Census Bureau projects the population aged 65 and over to increase from 35 million in 2000 to 40.2 million in 2010 (U. S. Census website: www.census.gov/prod/2006pubs/p23-209.pdf). This increase in the aging population directly impacts the number of beneficiaries eligible to receive Medicare. In the end there may be more appeals resulting from the increased Medicare usage.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: Two of OMHA's long-term goals are to consistently process BIPA and non-BIPA cases within the 90 day timeframe. To achieve these long term goals, OMHA has developed the following performance measures with annual targets: Increase the percentage of BIPA cases closed within 90 days; Increase the percentage of non-BIPA cases closed within 90 days; and for cases that go to hearing, increase the percentage of decisions rendered within 30 days of the hearing. OMHA's overarching responsibility is to adjudicate cases within 90 days. Rendering decisions within 30 days of when a hearing is held is a critical leading indicator of the likelihood of meeting the 90 day timeframe. The two remaining annual performance measures include the annual milestones for the long-term measure to acheive a good customer service rating from appellants and the annual measure to decrease the percentage of appealed decisions reversed or remanded by the DAB/MAC. Both of these ensure that the customer service aspects of adjudication and overall quality remain high as the processing time decreases. Output measures are appropriate for OMHA since its functions are primarily to ensure a timely adjudication of Medicare appeals and compliance with the Administrative Procedure Act and Social Security Act.

Evidence: As identified in the OMHA Strategic Plan, Fiscal Years 2007 - 2012, Performance Measurement, pages 11-12, "OMHA has developed three strategic goals that balance the need to ensure that appellants have access to timely and fair hearings with the need to demonstrate effective stewardship to the American taxpayers." A sample weekly performance measurement report is included as additional evidence.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: In addition to the annual milestones of the long-term measures described 2.2, OMHA has two additional annual performance measures. For both of these annual measures, the main component that was used to determine the targets was historical data - on both the time it took to deliver a decision and the number of cases that were reversed or remanded. After considering this historical data in light of the anticipated increase in workload and changing demographics, a 1% annual increase in percentage of decisions rendered within 30 days of hearing and a consistent 1% or less of OMHA decisions reversed or remanded are both challenging and achievable.

Evidence: The Performance Management Section, pages 11-12, of the OMHA Strategic Plan, Fiscal Years 2007 - 2012 includes OMHA's annual term measures. The Outputs/Outcomes Table in the FY 2009 Congressional Justification identifies OMHA's annual measures and established targets. In addition to the annual milestones for the long-term measures, the annual measures include the following: For cases that go to hearings, increase the percentage of decisions rendered within 30 days of the hearing; Reduce the percentage of appealed decisions reversed or remanded by the Medicare Appeals Council.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: OMHA has established a memorandum of understanding (Part A MOU) with the Centers for Medicare & Medicaid Services (CMS) and its affiliated Qualified Independent Contractors (QICs) outlining the roles and responsibilities of all parties in the appeals process. All parties are aware of the overarching goal of the 90 day processing timeframes associated with adjudicating Medicare cases. This is critical to OMHA achieving long-term goals, as CMS through the QICs is custodian of the administrative case file. OMHA is unable to adjudicate appeals until the administrative case file is received; however, the 90 day processing time begins when OMHA receives the request for hearing which is the indicator for requesting the administrative case file. In addition, OMHA tracks case information received from the QICs to anticipate workload increases at the ALJ level. OMHA also partners with STG International, Inc., the contract provider to OMHA for administrative and legal staffing, by providing annual feedback/comments regarding the contractors' performance on the STG Customer Performance Survey. All STG International, Inc. contract staff are fully trained on and aware of the 90 day processing timeframes and their continued retention is contingent upon their successful contribution toward achieving this goal. The Medicare Appeals System (MAS) is the primary automated computer system that supports the Medicare appeals process. As co-business owners, CMS and OMHA established a formal process for the governance, management, funding and provision of IT services in support of Medicare appeals activities. CMS has responsibility for Levels 1 and 2 of the Medicare appeals process while OMHA has responsibility for Level 3. Both are equally committed to providing timely and accurate disposition of Medicare Appeals while maintaining functional independence as required by Section 931 of MMA. MAS contributes to the timely and efficient processing of appeals.

Evidence: The Medicare Part A MOU with CMS outlines the roles and responsibilities of coordinating efforts, including OMHA, QICs and CMS. The Part A MOU provides appropriate time frames and processes for moving cases through the appeals process, in order to expedite the Medicare Appeals process flow. The Part A MOU outlines standards of performance, establishes specific calendar days for hearing notifications, waiver notifications, and evidence submissions. Additional evidence includes the CMS MAS MOU and the STG Customer Performance Survey.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: There are two ways in which OMHA is achieving independent evaluations that encompass the scope of the services provided. First, OMHA is participating in an evaluation by the HHS Office of Inspector General (OIG) to assess the effectiveness of video-teleconferencing, telephone, and in-person hearings to adjudicate Medicare appeals in a timely manner. Moreover, OIG will examine customer satisfaction related to the availability and use of new video-teleconferencing technology. The OIG will also examine other timeliness issues, specifically scheduling of hearings and issuing decisions. This evaluation will be completed by July 2008. Second, OMHA has contracted Coray Gurnitz Consulting to develop and administer a Medicare appeals customer satisfaction survey to randomly selected appellants and appellant representatives. The survey will measure the overall appellant experience, the quality of the hard copy/internet materials, the scheduling of the hearing, interactions with OMHA staff, and the various mediums for hearings (video-teleconferencing, hearings by phone, and hearings in person). The project is scheduled to be completed by September 2008 with results expected by December 2008. The survey will be readministered quarterly with summary annual reporting.

Evidence: The OIG Request for Entrance Conference describes the study and assessment. As part of its oversight responsibility, the OIG has determined the need for this short-term evaluation, based on the Senate Finance Committee's request for such an evaluation. Additional evidence includes Appellant Survey Contract.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: OMHA does not have program budgeting in place that defines the relationship between long-term/annual measure and resources. The impact of funding on program performance is not included in the FY 2009 Congressional Justification. Finally, the program does not discuss direct and indirect costs associated with achieving its performance goals.

Evidence: FY 2009 Congressional Justification

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: In accordance with its FY 2006 PART Improvement Plan, OMHA completed development and implementation of its FY 2007 - 2012 Strategic Plan and integrated it into the program management system and organization's business processes. Through this process, OMHA also completed the development of long-term and annual measures, and submitted baseline and target information to the Office of Management and Budget. Furthermore, OMHA conducted a detailed Best Practices review of its four field offices. Best practices supporting reduced case processing timeframes were identified and will be implemented nationwide in FYs 2008 and 2009. OMHA also reviews performance and workload measure data on a weekly basis and makes the appropriate resource adjustments as needed.

Evidence: The OMHA Strategic Plan FY 2007 - 2012 was implemented in January 2007 and includes performance and efficiency measures to support OMHA's mission and long-term goals. Moreover, sample weekly performance measure report is included as evidence of OMHA's weekly monitoring processes. An example of best practice initiative is OMHA's recent implementation of a standardized decision template for use by all field offices nationwide. This reduced the lead times associated with drafting customized decisions. A copy of the decision template is included as evidence.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: OMHA currently collects and reviews daily caseload information from the Medicare Appeals System to ensure that cases are being processed in a timely manner across all sites. In addition, the agency tracks case information received from the level 2 (Qualified Independent Contractors) and 4 (DAB/MAC) appeal offices to anticipate workload increases at the Administrative Law Judge level. Resources are adjusted accordingly to effectively process incoming cases.

Evidence: OMHA routinely reallocates resources in order to meet the mandatory 90 day processing timeframes. For example, in an effort to address increased workload demands, the Irvine Field Office temporarily transferred 25 appeals per week to the Arlington Field Offices starting on January 14, 2008. OMHA management will reevaluate this workload shift after a period of time to determine if the appeals still need to be transferred. Additional evidence includes OMHA Case Tracking Results, Qualified Independent Contractors (QICs - level 2) and Departmental Appeals Board (DAB - Level 4) Independent Review reports.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: OMHA's employee performance management program includes critical elements to ensure accountability in supporting the organization's goals. These metrics are included in ALJ performance contracts, as well as all other managers' plans. In addition, OMHA has negotiated a Memorandum of Understanding (MOU) with the Centers for Medicare & Medicaid Services (CMS) to outline respective roles, responsibilities, and required service levels and timeframes for work performed by the level 2 and administrative contractors in support of the Medicare appeals process. Furthermore, OMHA management provides input to STG International, Inc contract employees' evaluation reflecting performance and resultant contribution to meeting OMHA's performance measures. The STG International, Inc contract employees' retention is based upon their successful performance.

Evidence: A Sample Attorney Performance Plan has been included which provides an example of metrics to support the 90 day case processing timeframe. Additional evidence includes the Sample Customer Performance Survey for STG International, Inc. contract employees and the MOU for level 2 appeals at the Qualified Independent Contractor (QIC) level.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: FY 2006 was the first year OMHA received its own appropriation. OMHA obligated over 99% of the FY 2006 appropriation and 99% of the FY 2007 budget. OMHA is utilizing appropriate financial reporting mechanisms, including monthly reports to track expenditures against obligations, to ensure funds are being obligated appropriately and for their intended purpose. OMHA maintained effective internal controls over its program and operations and met the HHS 2007 Federal Manager's Financial Integrity Act (FMFIA) objectives with no reportable weakness in the design or operation of such controls as it pertains to obligation and expenditures of funding.

Evidence: The FYs 2006-2009 Congressional Justifications outline the intended purposes of expenses. Estimated obligations are apportioned by quarter; with obligation rates tracked monthly through reviews of HHS fiscal reports. The Unified Financial Management System Allotment and Allowance Report reflects OMHA's FY 2007 obligation rate. Also, monthly Status of Funds Reports present the yearly operating plan, projected obligations through the end of the year, and total obligations through the end of the year as noted above. Additional evidence includes the FY 2007 A-123 (Management's Responsibility for Internal Controls) Assurance Letter.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: In FY 2007 OMHA adopted two efficiency measures: (1) cost per claim adjudicated and (2) the number of claims processed per ALJ. These measures enable OMHA to gauge program efficiency related to cost of processing claims and the legally mandated processing time of claims. OMHA's overarching goal is to adjudicate cases within the mandated 90 day timeframe. One of OMHA's strategic goals is to assure efficient operations in all aspects of the Level III appeals process. These two efficiency measures are integrally tied together, in that decreased processing costs provide more resources for increased volume, and greater processing efficiency decreases the cost per claim. Both are monitored on a quarterly and weekly basis respectively and present a very focused approach towards meeting OMHA's long term goals. Moreover, the implementation of the best practices initiatives in fiscal years 2008 and 2009 will further assist the agency in meeting its efficiency targets. In addition to monitoring the efficiency measures, OMHA has developed and implemented the Unified Workload Measurement System (UWMS). The system includes a work process analysis and application to ensure the equitable distribution of cases within each of the field offices and across the organization. The UWMS provides valuable information that is considered in resource planning and allocation. In the future OMHA plans to explore the option of utilizing a weighting system in UWMS to reflect ranges of complexity (e.g. amount of research, multiple exhibits, length of hearing time, MAS entry).

Evidence: The OMHA Strategic Plan identifies the organization's strategic goals and efficiency measures. The first of OMHA's efficiency measures is "decrease the cost per claim adjudicated each year by target percentage" with a baseline of $617 per claim in FY 2006. The second of OMHA's efficiency measures is related towards achieving efficiency in processing of claims, "increase number of claims processed per ALJ Team over each year by target percentage" with a baseline of 1,851 claims per ALJ Team in FY 2006. Two best practice initiatives are expected to yield efficiency gains with respect to both cost and processing time. The first initiative will explore alternate ALJ team structures to identify potential configurations that maximize the number of claims processed by an ALJ at lower costs. The second initiative will focus on paralegal training to enhance their decision drafting capabilities. This is expected to decrease processing time and costs by reducing reliance on attorneys to draft less complex decisions. In addition, the contract with NOBLIS, Inc to evaluate the pilot phase of the Unified Workload Measurement System and the Unified Workload Measurement Summary are provided as additional evidence of OMHA's efforts to further improve the efficiency of its operations.

Does the program collaborate and coordinate effectively with related programs?

Explanation: OMHA collaborates with the Centers for Medicare & Medicaid Services (CMS) and the Departmental Appeals Board (DAB) in its efforts to adjudicate cases within the 90 day timeframes. Coordination of regulatory changes, public outreach/education initiatives, and implementation of the Medicare Appeals System (MAS) are examples of the cross-coordination among the three organizations.

Evidence: The MAS system is the primary automated computer system supporting the Medicare appeals processing and tracking jointly used by OMHA and CMS for level 2 and level 3 appeals. As co-business owners of the MAS system, CMS and OMHA have established a formal process for the governance, management, funding and provision of IT services in support the MAS system. For example, both OMHA and CMS representatives participated in a requirements development session for MAS e-mail functionality. A summary of the joint requirements development sessions included as evidence. Additional evidence includes the MOUs between CMS and OMHA which outline responsibilities to support the accurate and timely disposition of Medicare appeals.

Does the program use strong financial management practices?

Explanation: OMHA has been proactive in implementing appropriate financial practices to manage program funds. OMHA tracks obligations on a monthly basis and provides updated reports to all field office managers to assist them in managing their spending levels. The HHS Program Support Center (PSC) is responsible for ensuring compliance with the Prompt Payment Act with OMHA accurately entering receipt actions into the DHHS Unified Financial Management System. OMHA established on-site and semi-annual reviews of field office financial records, including acquisition, purchase card, property, internal controls, and security operations. The results along with all required action items from the reviews are briefed to all senior managers. Furthermore, all actions items are tracked until complete and follow-up spot checks are conducted to ensure continued compliance. These reviews minimize the risk of waste, fraud and abuse thus strengthening the internal controls structure and financial management practices.

Evidence: OMHA's internal controls over its programs, resources, and operations ensured compliance with the HHS' 2007 Federal Manager's Financial Integrity Act (FMFIA) objectives with no reportable weakness in the design or operation of such controls evidenced in OMHA's FY 2007 Management Statement of Assurance. Electronically receiving transactions for contracted services or goods through the Unified Financial Management System (UFMS) has contributed to reducing the Department's Prompt Payment Act interest penalty payments as identified in Departmental reports. The newly formatted Monthly Status of Fund report has enabled management to proactively track current expenditures to projected spending and more accurately forecast future commitments. Additional evidence includes the Administrative and Financial Management Site Visit Report, Status of Fund Report and the Interagency Audit Agreements with the Office of the Inspector General and HHS.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: In FY 2006, OMHA processed 74% of BIPA appeals in 90 days, falling 11 percentage points short of the target. In order to improve the organization's performance in FY 2007, OMHA implemented several improvement actions to include: standardization of the decision template to reduce lead times associated with drafting decisions, implementing weekly reviews of workload statistics across all sites and balancing workload accordingly, revising employee performance plans to ensure accountability in achieving performance goals, and negotiating MOUs with its program partners to ensure external accountability as well. As a result of these actions, in FY 2007 OMHA improved its 90 day case processing timeframes by 10% to 84%. Furthermore, the national Best Practices Review (BPR) sought to identify areas for continuous improvement in efficiency and quality. The BPR identified the docketing process, the stage from receipt of a hearing request through assignment of a case to an ALJ, as an area conducive to operational efficiencies. Specifically, the docketing stage was identified as an area for reducing the amount of time cases spent in the administrative phase of the adjudication process. Initial measures among the four field offices indicated a span of 52 days across OMHA nationally for the docketing process. This variance was attributed to different local data entry practices and docket processes. The BPR called for a policy change to reduce docket processing times and bring more consistency to the docketing process, as well as offering suggestions to the docket structure based on observations in the most efficient offices. The policy change reinforced and built on an earlier effort to enhance consistency in data entry in the Medicare Appeals System (MAS) case management tool. A preliminary MAS Data Standardization policy was further developed to streamline data entry and emphasize essential data elements required for case adjudication. Consistency was also enhanced by integrating the data entry requirements into an agency-wide comprehensive training program. Through these efforts, OMHA has reduced docket process times by 48% from the initial average measure of 34.9 days (42.0 days for the three large offices, which process approximately 95 percent of OMHA cases) to 16.6 days (13.9 for the three large offices).

Evidence: A copy of the new decision template, which reduces decision drafting lead times as well as the PART A MOU which provides external accountability are included as evidence. Also included are the MAS docket lead time report outlining the improved docket processing times as recommended by the BPR and the MAS Data Standardization Policy.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: OMHA has demonstrated progress toward achieving its long-term performance goals. OMHA has shown improvement in one of the three long-term measures, though still short of the FY 2007 target; however, as of Q2 FY 2008, OMHA is on track to exceed its goal of processing 86% of BIPA cases within 90 days with currently 96.2% of these cases being processed on time. Between FYs 2006 and 2007, OMHA achieved a 10% increase in the percentage of BIPA cases adjudicated within the 90 day timeframe, from 74% in FY 2006 to 84% in FY 2007. The complimentary long-term measure, increase the percentage of non-BIPA cases closed within the 90 day timeframe has seen a negative trend, from 47% in FY 2006 to 43% in FY 2007; however, as of Q2 FY 2008, OMHA is on track to exceed its goal of processing 51% of non-BIPA cases within in 90 days with currently 71% of these cases being processed on time. Additionally, the third long-term measure related to survey results reporting good customer service is lacking baselines, expected to be established in 2008.

Evidence: OMHA Case Tracking Results (latest monthly report is through February 29, 2008); OMHA FY 2007 Detailed Performance Analysis

Does the program (including program partners) achieve its annual performance goals?

Explanation: There is minimal progress being made toward the annual output measures. In FY 2007, OMHA exceeded its annual efficiency goal for the cost per claim adjudicated. The program has maintained performance for cases that go to hearing, rendering decisions within 30 days of the hearing 80.1% of the time. Data on the number of decisions reversed or remanded has not yet demonstrated a positive trend; however, OMHA exceeded the 2007 target of 4%. As of Q2 FY 2008, only .3% of its decisions have been reversed or remanded. In 2007, the number of claims processed by each ALJ Team decreased, resulting in falling short of annual targets. Once these measures begin to show improvement the rating will increase.

Evidence: The efficiency measure "decrease cost per claim" improved from a baseline of $617 per claim by 20% to $489 per claim in FY 2007, exceeding the target of 15% ($524). The annual output measure of "increasing the percentage of decisions rendered within 30 days" maintained baseline performance of approximately 80%. In "reducing the percentage of decisions reversed or remanded to the Medicare Appeals Council" OMHA has fallen slightly below the FY 2006 baseline of 1% to 1.4% in FY 2007, but still exceeded the target for that year of 4%. The number of claims processed per ALJ Team decreased from 1,851 in 2006 to 1,814 in FY 2007. The OMHA FY 2007 Detailed Performance Analysis provides the results of the FY 2007 measures.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: OMHA has one efficiency measure related to cost effectiveness, decrease cost per claim adjudicated. This cost effectiveness measure improved from a baseline of $617 per claim by 20% to $489 per claim in FY 2007, exceeding the target of 15% ($524). Although OMHA's workload increased 116% in its second year of operation, its budget remained static. Cost effectiveness was achieved through a variety of initiatives. One such initiative was the development of staffing pools, a less resource intensive staffing model than full Administrative Law Judge (ALJ) teams. The staffing pools provided decision writing, exhibiting and scheduling support to existing teams eliminating the need to hire additional ALJs. In addition to the cost effectiveness measure, OMHA also established an operational efficiency measure, increase number of claims per ALJ. In FY 2007, OMHA's target was to increase the number of claims per ALJ by 4%. In preparation for the additional workload anticipated for new Medicare Part D program, OMHA increased the number of ALJs from 53 ALJs in 2005 to 72 ALJs in 2007. While OMHA did experience a significant increase in workload, the number of claims per ALJ decreased as the Part D volume was much less than projected. As a result, the number of claims processed per ALJ Team decreased from 1,851 in 2006 to 1,814 in 2007 reflecting a 2% decrease.

Evidence: The OMHA Case Tracking Results (latest monthly report is through February 29, 2008) provides case tracking date for FY 2008. The OMHA Strategic Plan FY 2007 - 2012, Performance Measurement, pages 11-12, identifies OMHA performance and efficiency measures. The OMHA FY 2007 Detailed Performance Analysis includes FY 2007 results for OMHA's measures.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: The Q2 FY 2008 average appeals processing time for OMHA is 66.5 days. Formerly, the Social Security Administration (SSA) had responsibility for processing Level 3 Medicare appeals cases. GAO report number GAO-05-703R, dated June 30, 2005, states that SSA ALJs took an average of 295 days to resolve appeals between October 2004 and March 2005. Moreover, SSA's current processing time for disability claims is 505 days as evidenced on SSA's website link: http://www.socialsecurity.gov/dsi/.

Evidence: Evidence includes FY 2006 and FY 2007 OMHA Case Tracking Reports. Below is the link to the GAO report GAO-05-703R:. http://www.gao.gov/new.items/d05703r.pdf

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: While two independent evaluations are being conducted (one by the Office of the Inspector General and the other by Coray Gurnitz Consulting) no results have been reported.

Evidence: No independent evaluations of sufficient scope and quality have been completed.