Office of Finance

DEPARTMENTAL APPEALS BOARD

PERFORMANCE PLAN FOR FY 2003

The Departmental Appeals Board (DAB) is an independent office established to provide conflict resolution services. These services are basically of two types: 1) adjudicatory hearings, appellate review of decisions of Administrative Law Judges (ALJs), and similarly structured formal and informal reviews of contested decisions; and 2) alternative dispute resolution (ADR), including mediation and other consensual processes and training related to ADR.

Organizationally, DAB has four Divisions:

• The Appellate Division supports the Board Members, issuing decisions on behalf of the Secretary of HHS in a wide variety of cases. In some cases, the Board provides a hearing if one is needed; in others, the Board provides an appellate-type review.
• The Civil Remedies Division supports ALJs who conduct hearings and issue initial decisions in health care fraud and abuse cases, provider sanction cases, and other civil enforcement cases.
• The Medicare Operations Division supports Administrative Appeals Judges (AAJs) who act as the Medicare Appeals Council for review of decisions by SSA ALJs in Medicare entitlement and coverage cases (i.e., Medicare Appeals).

NOTE: The Board Members and other judges are part of the Immediate Office of the Chair of the Board (together with administrative support staff), but are considered part of the Divisions for purposes of GPRA, since their caseloads are identified to the Divisions.

• The Alternative Dispute Resolution (ADR) Division supports the Chair of the Board in her function as Dispute Resolution Specialist for the Department, providing overall leadership for ADR at HHS. The Division also provides some direct ADR services, such as mediation in Board cases and other Department disputes and providing ADR training.

The DAB has no control over its caseload. Since the mid-1990's, caseload sizes have grown very rapidly, particularly for the Civil Remedies and Medicare Operations Divisions. Caseload projections signal continued growth. In addition, cases are increasing in complexity, thereby requiring more time for analysis and decision-making. Finally, the use of ADR is expanding - requests for mediation services have more than doubled over the past three years. The Performance Goals support and respond to other efforts (e.g., work redesign, improved data collection, increased staffing) to effectively carry out DAB's responsibilities and functions.

Goal 1: Maintain Appellate Division case processing rates

Measure: percentage of decisions with a net case age of six months or less.

Establishing Performance Targets: The Appellate Division reviews 1) determinations appealed directly to the Board in a wide range of cases, including disallowances under discretionary and mandatory grant programs, disapprovals of cost allocation plans, unilateral determinations of indirect cost rates, terminations of Head Start and other discretionary grants, sanctions in research misconduct cases, and determinations of ineligibility for ANA grants; and 2) appeals by either party of ALJ decisions in cases heard by the Civil Remedies Division, decisions by FDA ALJs, and decisions by ALJs in the Department of the Interior in cases involving the Indian Health Service's declination of proposed Indian Self-Determination Act contracts.

This goal addresses the timeliness of case review and decisions issued. The Performance Target for FY 2001 was 70%. Although the Appellate Division exceeded this goal, the Division is unlikely to maintain the higher level of case processing rates, due to a projected growth in the caseload. As a result, the performance targets are maintained at 70% for FY 2002 and FY 2003.

Performance Progress: N/A

Goal 2: Maintain the Appellate Division's reversal and remand rate on Board decisions appealed to Federal courts.

Measure: Number of decisions reversed or remanded on appeal to Federal court, as a percentage of all Board decisions issued (1,789 decisions by the end of FY 2001).

Establishing Performance Targets: This goal addresses the quality of Board decisions. Historically, 2% or less of all Board decisions have been reversed or remanded on appeal to Federal court. A performance target of 2% was established for FY 2001, and continues for FY 2002 and FY 2003.

Performance Progress: The performance target for FY 2001 was met.

Goal 3: Maintain annual output of ALJ decisions. (replaced by revised Goal 3 below)

Measure: Total number of decisions in FY 1999.

Revised Measure: Number of decisions annually per ALJ year.

Establishing Performance Targets: The original target was based on an annual number of decisions over time in a fairly stable environment. The measure was changed to reflect the large increase in caseload, growing backlogs, and the addition of ALJs. Cases that go to decision are generally complex, involve a large record and an in-person hearing that can last up to a week, and require considerable time to decide. In addition, although the majority of cases before the ALJs are settled, withdrawn, or otherwise dismissed, they still require judicial time at the pre-decisional phase. With these factors in mind, the measure identified a target number of decisions per ALJ year, rather than a total number. (Note: results for FY 1999 reported the total number of decisions). The target for FY 2000 was 10 decisions for each ALJ year.

DAB replaced this goal for FY 2001. The goal is inappropriate, as output quotas cannot, by law, be established for ALJs.

Performance Progress: N/A

Goal 3 (new for FY 2002): Increase Civil Remedies Division case processing rates for Inspector General (IG) cases.

Measure: Percentage of decisions within 60 days of the close of the record.

Establishing Performance Targets: According to regulations, decisions on IG cases are to be made within 60 days of the close of the record. In actuality, that deadline is sometimes exceeded. This goal focuses on tracking and increasing the percentage of cases decided within 60 days. The target for FY 2002 is 80% of decisions made within 60 days of the close of the record. This target continues for FY 2003.

Goal 4: Reduce average net case age of Civil Remedies Division decisions.

Measure: Average net case age for cases to move from receipt to decision.

Establishing Performance Targets: This goal addresses timeliness. The target for FY 2000, the first year for this goal, was a 10% reduction in the average net case age for cases requiring a written decision. A target of 15% was set for FY 2001, and continues for FY 2002 and FY 2003.

Performance Progress: The Civil Remedies Division did not meet its goal of reducing the average case age by 15% in FY 2001, because the Division lost three experienced ALJs in January and February of 2001. Although the Division replaced one ALJ in May, there is an initial learning curve which depresses productivity. In addition, the Division lost several support staff who would have been available to write decisions and assist in monitoring cases.

Goal 5: Increase the use of Alternative Dispute Resolution (ADR) in appealed cases.

Establishing Performance Targets: This goal is directed at expanding the use of ADR (i.e., mediation) in cases appealed to the DAB. Mediation, when successful, can resolve appeals faster and less expensively than the formal appeal process. Greater use of mediation also has the potential for reducing case backlogs. The target for FY 1999 was a 25% increase in the number of appealed cases mediated compared to FY 1998.

In FY 1999, 63 cases were mediated; however, 40 of these cases represent a one-time appeal of a block of cases involving a unique cost allocation issue. For performance measurement purposes over time, DAB proposes to factor out this block, leaving a total of 23 cases mediated. An additional increase of 25% was targeted for FY 2000; the target for FY 2001 was a 10% increase over FY 2000. This same rate of increase is targeted for FY 2002 and FY 2003.

Performance Progress: Thirty cases were mediated in FY 2001, for a 14% increase over FY 2000, thus exceeding the goal.

Goal 6: Expand ADR training opportunities.

Measure 1: Number of training sessions offered.

Measure 2: Number of HHS staff trained.

Establishing Performance Targets: Increased use of ADR is the result of several factors: increasing the awareness of alternatives to the typical ways of dealing with conflict; understanding ADR processes and their potential use; and expanding the availability of trained neutrals. Identified measures address both the availability of training and the number of staff trained.

The target for Measure 1, number of sessions conducted, was 12 for FY 2001. This target continues for FY 2002 and FY 2003. The Measure 2 target for FY 2001 was 400 staff trained; it continues for FY 2002 and FY 2003.

Performance Progress:

Measure 1: 14 sessions were held in FY 2001, exceeding the target of 12.

Measure 2: 409 staff were trained in FY 2001, exceeding the target of 400.

Goal 7: Encourage the use of ADR in all Operating Divisions.

Measure 1: Number of meetings and/or presentations with management and others, including Federal interagency efforts, to foster the application of ADR techniques.

Measure 2: Number of HHS cases mediated through Sharing Neutrals.

Establishing Performance Targets: This goal supports the functions of the Department's Dispute Resolution Specialist; the Chair of DAB is designated as such by the Secretary.

Measure 1: Performance target for FY 2001 was 15 sessions; this target continues for FY 2002 and FY 2003.

Measure 2: This measure, new in FY 2001, reflects the increasing demand for low-cost, qualified mediators and the role of Sharing Neutrals in meeting this demand. Sharing Neutrals is administered by the ADR division. FY 2000 serves as the baseline; in that year, 28 disputes (in five OPDIVs and OS) were mediated through Sharing Neutrals. The FY 2001 target was 30 cases mediated; 34 cases is the target for FY 2002, increasing to 36 cases mediated for FY 2003.

Performance Progress:

Measure 1: The FY 2001 target was exceeded, in large part because of the ADR Division's leadership role in initiatives sponsored by DOJ and ABA to clarify confidentiality protections under the ADR Act and best practices in the Federal sector's ADR proceedings.

Measure 2: The FY 2001 target was met.

Goal 8 (Revised): Constrain growth in the average time to complete action on Medicare Appeals before the Medicare Appeals Council.

Measure: Average time to complete action on Medicare Appeals cases

Establishing Performance Targets: The original goal (to reduce the average time to complete action on requests for review before the Medicare Appeals Council) was based on the assumption that the Medicare Operations Division (MOD) would be fully staffed, and that the number of incoming cases would remain relatively stable. For the following reasons, this became an unrealistic target: a static or decreasing number of staff; an increase in the number of cases received (from 2,262 in FY 1998 to 7,237 in FY 2000, 7,931 in FY 2001, and a projected 9,015 in FY 2002); increased complexity of cases; and an increase in the number of civil actions filed. As a result, the target goal was revised to "constrain the growth in the average time."

The target was 21 months for FY 2001 and 24 months for FY 2002 and FY 2003. The targets for FY 2002 and FY 2003 have now been revised downward to 16 months for FY 2002 and 18 months for FY 2003, to reflect new information. The targets now assume that implementation of the Benefits Improvement Protection Act (BIPA) will be delayed; therefore, MOD will not have to give priority to BIPA deadline cases or devote resources to processing cases for court, and the backlog will not age as rapidly as previously thought. Nevertheless, the average time to complete action on a case will increase each year that MOD does not have sufficient resources to close cases on a current basis, as is reflected in the increase from FY 2002 to FY 2003. If implementation of BIPA is not delayed, MOD may not be able to meet the FY 2002 and FY 2003 goals.

Performance Progress: In FY 2001, the average number of months to complete action on Medicare Appeals decreased to 14.2 months, exceeding the goal by 6.8 months. This was due to continued progress toward full implementation of MOD redesign, and lower than projected intake of cases.

Goal 9 (Revised): Increase Number of Dispositions.

Measure: Number of dispositions

Establishing Performance Targets: As with Goal 8, the original Goal 9 -- to reduce the age of Medicare Appeals cases by measuring the percentage of appeals exceeding the action target -- was based on the assumptions that the Medicare Operations Division (MOD) would be fully staffed, and that the number of incoming cases would remain relatively stable. However, due to a dramatically increased number of newly-filed appeals, the goal to reduce the percentage of pending cases exceeding processing time targets diminished in value as a workload measure. The number of cases filed in FY 2000 increased by 80% to 7,237, with a year-end pending caseload of 11,500. Based on this analysis, the target goal was revised to increase the number of dispositions for FY 2001 (5,000 dispositions) and FY 2002 (5,250). By increasing the number of dispositions, the growth in the average case age may also be constrained.

MOD case processing has been evaluated, and recommendations are now being implemented. Moreover, MOD was finally able to fill vacant clerical positions in FY 2001, and two new FTE are to be added in the last half of FY 2002. As a result, DAB is projecting an increase to 5,250 dispositions in FY 2002 and 5,500 in FY 2003, when the two new positions become fully productive.

Measuring Performance: FY 2000 serves as the baseline.

Performance Progress: Performance Progress: The actual number of dispositions in FY 2001 (7,955) exceeded projections (5,000). This was due to continued implementation of MOD's reinvented case processing procedures, plus an unusually large number of remands (roughly 2,000) resulting from the unavailability of hearing records and/or claim files from SSA ALJs.

Goal 10: Develop program-specific regulations governing review of ALJ decisions concerning Medicare claims. (This goal has been dropped).

DAB has dropped this goal for performance measurement purposes, although DAB continues to believe that the hearings and appeals process needs improvement. DAB has participated on a CMS work group established to address this and related issues.

Goal 11: Increase the effectiveness of MOD staff through training.

Measure: Percentage of staff trained in at least two substantive areas. This is a revised measure, using percentages rather than numbers. Since the number of staff has fluctuated, DAB believes percentages will be a more effective measure.

Establishing Performance Targets: FY 1999 served as the baseline. DAB determined the number of staff who attended training sessions (12) as a percentage of total staff (15), or 80%. Because of a revamped tracking system and other organizational changes, a target of 100% was set for FY 2000 and FY 2001. This target continues for FY 2002 and FY 2003.

Performance Progress: 100% of staff received training in FY 2001.

Data Verification and Validity

Case data are entered in controlled-access databases, with case-specific identification. Other program data (e.g., number of training sessions, number of cases reversed or remanded) are also recorded and tracked. Data used in performance measures are validated by generating periodic reports. At the end of the fiscal year, the report totals will be cross-checked with annual totals for each measure.

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