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December 2016

Yuletide Backlogs
By Lee DeOrio
For The Record
Vol. 28 No. 12 P. 3

Phooey to anyone who said recovery audit contractors (RACs) were largely to blame for the constipated state of Medicare appeals. Recently, Health and Human Services released a data brief showing that the RAC program "simply was not, and is not, the primary source of the [Medicare appeals] backlog."

On the surface, it's hard to argue that's not the case, not with the data indicating RAC-related appeals made up only 9.5% of the total received by the Office of Medicare Hearings and Appeals in fiscal year 2016. But is it possible this is only a brief snapshot in time, a well-timed measurement following the completion of a significant round of appeals?

The Council for Medicare Integrity (CMI) addressed the findings in a press release, urging Congress to pass the Audit and Appeals Fairness, Integrity and Reforms in Medicare (AFIRM) Act. In addition, it recommends expanding AFIRM "to further promote expediency and prevent future backlogs" by including an appeals filing fee that would be refunded should the provider win its case.

This is a bad idea on two fronts. Requiring a filing fee discourages providers from appealing when they are already burdened by myriad agencies denying claims right and left. Administrative costs alone make appeals an expensive proposition. If, as CMI claims, there are a small number of so-called frequent flyers responsible for a huge chunk of the backlogs, then address that issue rather than adding even more expense to the appeal process for the reasonable providers.

In addition, the extra money to the payer incentivizes Medicare to continue to deny appeals. It's unlikely anyone above the RAC-appeal level knows how to code properly, further diminishing the chances of these added appeal levels to be resolved correctly.

Another CMI recommendation is even more dubious: penalties for providers who fail to bill a claim within three months of the date of service. Medicare allows one year from the date of service to file a claim. What justification is there for penalizing a provider for following the legal process? Providers are already trying to bill at two days from discharge in most hospitals. If there's a problem with the filing deadline, then shorten it.

To CMI's credit, its last two recommendations hit the target. First, it proposes Congress require that administrative law judges make decisions consistently and in accordance with Medicare policy. This seems straightforward, but how about expanding that idea? If RACs must have appropriately credentialed and experienced coders to review audits and appeals, then the subsequent appeal levels also should uphold these standards.

For the most part, once you move past RACs, coders do not seem to be reviewing the continued appeals. How is that fair?

CMI's final recommendation is to expedite claims where no facts are disputed. No doubt, it makes sense to fast-track the easy cases.