Watch for New Issues in the RAC Appeals Process

Expect a mad dash to eliminate the backlog

For years, you’ve endured an agonizingly slow claims appeals process due to the enormous backlog of pending appeals. But now, the U.S. Department of Health and Human Services (HHS) Office of Medicare Hearings and Appeals (OMHA) is rapidly speeding things up. Find out what this will mean for your appeals—and how HHS refuses to rein in Recovery Audit Contractors (RACs).

Don’t overlook: Even though nearly every healthcare industry professional has to deal with the RAC program, most don’t really understand the program’s objectives, core issues, and latest changes, according to hospital compliance expert Duane Abbey, PhD. But if you want to win your appeals, he notes in his AudioEducator program, “RAC Update and New Issues for 2019,” you must understand what RAC and other federal auditing programs are doing to root out inappropriate Medicare billing and recoup overbilled payments.

OMHA to Accelerate RAC Appeals Process?

The latest: OMHA recently announced in a federal court that it will eliminate the RAC appeals backlog within the next four years, according to HealthLeaders. To do so, the agency plans to hire approximately 80 more Administrative Law Judges (ALJ), OMHA told District Court Judge James Boasberg.

But Judge Boasberg had previously ordered HHS to eliminate the appeals backlog by Dec. 31, 2020. This announcement in district court comes on the heels of the Centers for Medicare & Medicaid Services’ (CMS’) May 22, 2018 presentation that unveiled an expanded alternative dispute resolution process to reduce the appeals backlog, according to Bloomberg BNA.

The American Hospital Association (AHA) has filed lawsuits against HHS regarding the backlog, arguing that the agency is violating the Medicare Act, which sets a 90-day limit for settling RAC appeals, according to an Advisory Board report.

As of Feb. 28, 2017, the processing time for administrative appeals reached 1,051 days, but the new expanded settlement conference facilitation (SCF) process may help you to reach a quicker resolution with OMHA and the Medicare Appeals Council.

Don’t Get Too Excited Yet

Caveat: Not everyone or every appeal is eligible for the expanded SCF process, however. In fact, there are strict requirements. For example, qualifying applicants must be Medicare providers or suppliers with either 25 or more SCF-eligible appeals pending at OMHA and the Medicare Appeals Council, or at least one appeal with more than $9,000 in billed charges, Bloomberg explained.

And all SCF-eligible appeals must have been filed on or before Nov. 3, 2017 and not be involved in another settlement process, such as the low volume appeals initiative. If your appeal has a scheduled ALJ hearing or has already had an ALJ hearing, it’s ineligible for the expanded SCF program.

Trouble ahead: Also, the AHA isn’t the only provider organization pushing for RAC reform. The American Medical Association (AMA) is also in the fight. In 2017, the AMA sent two letters—on June 13 and Sept. 11—to CMS Administrator Seema Verma, calling RAC contingency fee payments a “pay and chase model.”

The AMA highlighted statistics showing that out of nearly 47,000 RAC Medicare Part B determinations that providers appealed in fiscal year (FY) 2015, approximately 70 percent were overturned in the provider’s favor.

Provider Orgs Want to See RAC Pay

The AMA has been recommending that CMS make specific changes to the RAC program, including forcing RACs on the losing end of appeals to reimburse providers for the cost of the appeal plus interest.

The AMA would also like to see meaningful financial penalties for RACs that make errors—and a repeal of the RAC contingency payment structure. But whether CMS will make any of these changes remains to be seen.

Bottom line: Stay current on new RAC issues, especially regarding the RAC appeals process, so you can keep up-to-date on the key problem areas where RACs are finding the largest recoupments and on what you can expect for your appeals, Abbey stresses.

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