CMS to Temporarily Halt RAC Audits to Transition to New Contracts

After receiving pressure from more than 111 individual members of congress about the over aggressive nature of CMS’ RAC audit program, CMS announced earlier this week that they will temporarily halt new RAC audit requests to allow existing contracts with audit contractors to expire. In stark contrast to a release from earlier this year, in which CMS announced they planned to extend the current contracts through the implementation of the new contracts. So, this is quite a policy change in just a few weeks as pressure has been ratcheted up on CMS from congress.

CMS anticipates new contracts with RAC’s to be completed in the next few months. February 21 is the final day RAC’s can send a post payment ADR. February 28, 2014 will be the final day current RAC’s can send a prepayment Additional Document Request (ADR) request to a provider. Unfortunately, once the new RAC contracts are signed, the new audit contractors will have the ability to go back and review claims submitted throughout the hiatus time period. Current RACs will be allowed to finish work on existing audits that have already been initiated.

In their release, CMS announced that they are reviewing Additional Document Request (ADR) timeframes for review, a potential limit on ADR requests and facilitating better communications between the RACs, MACs and providers.  CMS has also agreed with an OIG recommendation that RACs performance evaluation must include the amount of claims that are identified and eventually overturned at a higher level of appeal.

CMS has taken much criticism for their RAC program in recent months, from more than 111 members of congress, interest groups representing Medicare providers of all sizes and types, media organizations and many more. The drumbeat started earlier this year with the release of a memorandum authored by Chief Administrative Law Judge Nancy Griswold detailing a more than 460,000 appealed claims backlog and a suspension of assigning new ALJ hearing dates for the next two years. OPGA responded to Chief ALJ Griswold outlining potential remedies to the backlog and also passed the memo onto several key members of congress.

OPGA also recently attended a forum put together by the Office of Medicare Hearings and Appeals, where representatives from CMS were repeatedly peppered with questions relating to the backlog, suspension of hearing dates and a myriad of problems with the first two levels of appeal. Administrative Law Judges are required to issue a decision within 90 days of receiving the appeal. However, with the incredible acceleration of the number of audits (and subsequent appeals), this process is now averaging nearly three years to complete.

The most appalling point here is that CMS can still begin recouping the dollars associated with the appealed claim 30 days after the provider chooses to accelerate their appeal to the ALJ. So, independent providers are forced to deal with the cash flow pressures and other headaches to navigate a broken system.

Now is the time to keep the pressure on CMS and your member of congress to ensure our voice is heard loud and clear throughout the time CMS is awarding the new RAC contracts. Accountability and transparency are badly needed in the RAC program and we must continue to voice our frustrations to ensure we are represented in any changes that are made. 

NAAOP also points to additional changes that are being made to new contracts for auditors. From NAAOP:

1) Recovery Auditor’s will be required to wait 30 days to allow for a discussion before sending the claim to the MAC for adjustment. Providers will not have to choose between initiating a discussion and an appeal.

2) Recovery Auditor’s will be required to confirm with provider receipt of a discussion request within three days.

3) Recovery Auditors will be required to wait until the second level of appeal is exhausted before they receive their contingency fee.

4) CMS will establish new and revised ADR limits that will be diversified across different claim types (e.g., inpatient, outpatient).

5) CMS will require Recovery Auditors to adjust the ADR limits in accordance with a provider’s denial rate. Providers with low denial rates will have lower ADR limits while providers with high denial rates will have higher ADR limits.

Contact OPGA with your stories and ideas to improve the Medicare appeals system.

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