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RAC Facts: Frequent Filers Continue to Overwhelm Medicare Appeals Process

Frequent Filers Continue to Overwhelm Medicare Appeals Process

Despite CMS recently offering providers a settlement incentive to clear the backlog of Medicare appeals claims, new estimates show that providers are still filing appeals at a rapid rate in an attempt to game the system. The Office of Medicare Hearings and Appeals (OMHA) now reports that the backlog of appeals cases will surpass 1 million claims by the end of this month.

While recently testifying before Congress, Chief Administrative Law Judge Nancy Griswold shared that, “51% of the incoming appeals have been filed by five appellants,” lending credence to the OIG’s report that a few calculating “frequent filer” hospital systems are appealing every claim in an effort to game the system. 

Last week, Griswold shared in an interview that the backlog is not caused by Recovery Audit Contractor (RAC) appeals, stating that “non-RAC appeals have also gone up at a surprisingly fast rate during the same period of time” supporting the case that providers are appealing numerous cases regardless of their type or merit.

In fact, according to the HHS Office of the Inspector General (OIG), “wide interpretation” of Medicare policy at the ALJ level has incentivized providers to actively seek to appeal to this level in the hope that they will get a different answer on the validity of their claim. In addition, the appeals settlement may have inadvertently added an incentive for providers to continue high levels of appeal in the hope of award of another future backlog settlement – which was provided to all who applied to participate even if their claim should have been overturned.

All Medicare Stakeholders Agree Reform Is Necessary Now

The President’s FY2016 Budget and OMHA have made several recommendations that seek to address vulnerabilities in the Medicare appeals process. The Council for Medicare Integrity supports the following:

  • Sample and consolidate similar claims for administrative efficiency.
  • Expedite procedures for claims with no material fact in dispute.
  • Require payment of a refundable filing fee when an appeal is filed to reduce the frivolous claims.

The Council also recommends:

  • Reforms that would require ALJ’s to rule according to Medicare policy, which would foster greater consistency to allow both providers and Recovery Auditors to improve their performance by understanding which claim management decisions were correct and which were incorrect according to the law.
  • Supporting the targeted adjustments CMS has discussed including in the next round of RAC contracts. Specifically, recommended guidelines surrounding additional document request (ADR) limits, which would subject providers with high error rates to increased document requests while those with demonstrated low error rates would be subject to fewer document requests. The effect would be to improve provider behavior and encourage correct Medicare billing while reducing improper payments overall. 

It’s Time To Move Appeals Reform Forward.

 

 

 

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