On July 10, 2018, the President signed an Executive Order undermining the impartial hiring of Medicare Administrative law Judges (ALJs). The Order states that “conditions of good administration make necessary an exception to the competitive hiring rules and examinations for the position of ALJ.” What this means is that ALJs will now be hired directly by each individual agency, including the Department of Health and Human Services (which administers CMS) for Medicare appeals. This is a dramatic change from the current centralized system that selects applicants deemed qualified through a competitive examination and selection procedures administered by the Office of Personnel Management (OPM).
Advocates and legislators are concerned. When the change was announced, Rep. John Larson of Connecticut said that Americans “deserve an impartial hearing by a highly-qualified, independent judge. But under the Administration’s new policy, they will face a judge beholden to ideology and politics rather than one selected through a competitive process designed to ensure qualification and neutrality.”
By statute, Medicare ALJs must be independent of CMS. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 ((MMA), Public Law 108-173, §931) transferred the function for Medicare ALJ appeals from the Social Security Administration to the Department of Health and Human Services. The law specifically states that ALJs are to be “organizationally and functionally independent of CMS.” The Executive Order conflicts with this statutory requirement. We fear that fairness and objectivity will be threatened, and the independence of ALJs appointed through this process will be in question.
The process for screening and putting forward applicants may, at first glance, look reasonable. But we remain concerned since the ultimate selection will be made by HHS – the agency responsible for the policies under review at ALJ hearings. This is a significant departure from the current centralized system that selects applicants deemed qualified through a competitive examination and selection procedures administered by OPM.
The new selection process that ties ALJ appointments to HHS does not bode well for Medicare beneficiaries who seek a fair, independent review of Medicare coverage denials. The Center for Medicare Advocacy’s experience with thousands of Medicare appeals demonstrates that the lower levels of appeal have become all but rubber stamps of Medicare denials. The ALJ level of appeal is the only real chance for beneficiaries to obtain an independent review. The fairness and objectivity of the appeals process will be gravely damaged by granting HHS the final say in the selection process and selection of Medicare ALJs.
For more discussion on the importance ALJ Independence, see:
January 10, 2019 – J. Stein
 (5 USC §554(d); 70 Fed Reg 11420-499 (March 8, 2005).