Hospital associations say a CMS proposal to ease the backlog of denied Medicare claims by making tweaks to the recovery audit contractor appeals process could leave them with fewer opportunities to retain payment. Others say the proposal would allow potentially untrained people to make the decisions.
In July, the CMS attempted to address what it called “an unprecedented and sustained increase” in Medicare appeals by suggesting ways to expedite the process.
Recovery audit contractors, or RACs, recoup overpayments from providers. Hospitals and medical groups commonly appeal RAC determinations, which created the backlog. RACs, which get to keep a percentage of recovered overpayments, say they are saving Medicare money. But hospitals have heavily criticized RACs and have called them "bounty hunters."
The CMS proposed allowing the agency to reassign a portion of its appeals workload from administrative law judges to attorney adjudicators. That would allow attorney adjudicators to issue decisions when an appealing hospital or health system bypasses a hearing or withdraws a request for a hearing overseen by a judge. Decisions by attorney adjudicators can be reopened or appealed the same as if a judge had made the decision.
Hospital association officials think this would come at a price.
“Providers are giving up their ability to present clinical information to the judges as they have done over the last several years,” Kenneth Raske, president of the Greater New York Hospital Association, said in a comment on the proposed rule.
Raske said providers who present medical information or have clinicians present at the time of hearings achieve more favorable outcomes. “Therefore, we do not believe that hospitals will take advantage of the attorney adjudicator program,” he said.
Others felt the idea would only put a dent in the backlog. There were 750,000 pending appeals as of April 2016, and the CMS is capable of handling only 77,000 appeals per year. The agency estimated approximately 23,650 appeals per year could be redirected.
“We believe resources could and should be directed in more meaningful ways to ensure the greatest impact,” said Alyssa Keefe, vice president of federal regulatory affairs at the California Hospital Association.
The proposal was also criticized by others outside of the industry. “It remains to be seen whether the establishment of attorney adjudicators will compromise the quality and thoroughness of review,” law firm Reed Smith wrote in an analysis of the rule.
Administrative law judges found the idea alarming. They are concerned the CMS has not outlined a set of review criteria required to be used by the attorney adjudicator when deciding cases. Also, even though the CMS said these lawyers should be "well-trained," the term is not defined in the rulemaking, according to Marvin Bober, legislative chairman for the Forum of the United States Administrative Law Judges, a trade group.
“With no definition of 'well-trained' or review criteria, an attorney adjudicator with little or no Medicare or adjudicatory training or experience is more likely to issue a legally or factually incorrect decision than a well-seasoned ALJ,” Bober said.
The CMS has not released a timeline to finalize the rule. The agency received 69 comments by its Aug. 29 comment deadline.
