Office of Medicare Hearings and Appeals Suspends Assignment of Appeal Requests Because of Large Backlog of RAC Appeals

Wednesday, January 15, 2014
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Appealing a bad decision by Medicare’s Recovery Audit Contractors (RACs) is taking longer than ever, according to an article on Modern Healthcare. The system is so overwhelmed by the number of appeals that some are calling it an “administrative quagmire that is denying basic due process rights.” In December 2013, the U.S. Department of Health and Human Services’ (HHS) Office of Medicare Hearings and Appeals (OMHA) began sending letters notifying hospitals around the country with high numbers of appeals that they would not be able to submit new cases until the existing backlog clears. According to OMHA this could take two years or more.

To read the letter from the OMHA sent to hospitals, click here.


Severe Backlog of Appeals With No End in Sight.

According to the OMHA, the nation’s 65 Medicare administrative law judges have a collective backlog of 357,000 appeals to work through before they can even start to accept new appeals from hospitals. According to Modern Healthcare, the rate of appeals filed by hospitals is growing faster than it ever has before. In January 2012, the OMHA received about 1,250 new cases per week. In December 2013, the number had grown to 15,000 appeals per week. The OMHA estimates the average wait time for a hearing before an administrative law judge has risen to 16 months and is expected to continue to climb.

Click here to read the entire Modern Healthcare article.


Provider Frustrations with RAC Program.

At least one provider is speaking out against the OMHA’s decision to stop taking new appeals for the time being. Daniel Landon, the senior vice president of government relations for the Missouri Hospital Association wrote to one of his U.S. Senators on this issue.

In the letter he wrote: “Providers aggrieved by a RAC payment denial-and who are twice as likely to win the appeal as to lose it-are placed in administrative purgatory for years. There is no conceivable way this can constitute adequate due process. Meanwhile, funds that could be better used to care for Medicare beneficiaries are tied up.”

Mr. Landon argued the entire RAC program is flawed. He called it a waste of the government’s time and money.

To read the entire letter from Mr. Landon, click here.


What Exactly is a RAC?

RACs are often referred to as “bounty hunters.” They are private companies contracted by the Centers for Medicare and Medicaid Services (CMS), used to identify Medicare overpayments and underpayments, and return Medicare overpayments to the Medicare Trust Fund. The RAC for region C, which includes Florida, Puerto Rico and the U.S. Virgin Islands, is Connolly Healthcare, Inc.


How to Prepare for RACs.

Although you may speak of a "routine" Medicare audit, there is really no such thing. This is like saying you have a "routine IRS audit." The fact is that there is some item you have claimed as a Medicare provider or the amount of claims Medicare has paid in a certain category that has caused you or your practice to be audited.

I previously wrote a blog highlighting some of the actions we recommend you take in responding to a Medicare audit. The most important step you should take is to consult an experienced health law attorney early in the audit process to assist in preparing the response.  Click here to read more on how to respond to a Medicare audit.


RAC Audits Are Here to Stay.

It’s important to keep in mind that RAC audits are not going away. It has become common for state and federal regulators to enforce even the smallest violations, resulting in investigations, monetary fines and penalties. If found in violation, you will not only have to pay fines and face disciplinary action, you will also lose revenue because you will have to spend time dealing with the investigation, instead of practicing medicine. Whether you are trying to prevent Medicare and Medicaid audits, Zone Program Integrity Contractor (ZPIC) audits, or any other kind of healthcare audits, there are steps you can implement in your practice today that may save you down the line. Click here to read more on self audits.


Don’t Wait Until It’s Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.

The attorneys of The Health Law Firm represent healthcare providers in Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.


Comments?

What do you think about the backlog of RAC appeals? Are you in the process of waiting for a hearing before an administrative law judge? Please leave any thoughtful comments below.


Sources:

Carlson, Joe. “RAC Appeals Backlog Cause for Frustration.” Modern Healthcare (January 10, 2014). From: http://bit.ly/1cVVCrW

Landon, Daniel. Letter on Medicare Recovery Audit Contractor Program. Missouri Hospital Association. (January 9, 2014). From: http://www.modernhealthcare.com/assets/pdf/CH92573110.PDF

Griswold, Nancy. “Memorandum to OMHA Medicare Appellants.” HHS OMHA. (December 30, 2013).


About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.


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1/15/2014

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