Medicare RAC court case keeps collections on uncertain footing The U.S. Court of Appeals for the Federal Circuit issued a decision in early March in a case filed by one of the Medicare Recovery Audit Contractors (RAC) after the Centers for Medicare and Medicaid Services (CMS) changed the timing for the payment of contingency fees on collections. The decision means the auditing program will be put on hold until CMS determines how to contract with its RACs. The RAC program is responsible for identifying fraud and waste in the Medicare system by detecting improper Medicare payments. Since 2008, when the program started, RACs have been paid immediately after Medicare overpayments are collected from providers – generally within 41 days. In 2014, CMS proposed a different payment method: paying on collections only after a provider's challenge passed the second of a five-level appeal process. RACs balked at this because providers often appeal the overpayment decisions, causing contingency fees to be delayed anywhere from four months to more than a year. CMS also required the RACs to create a reserve fund, to be used to repay CMS any contingency fees related to denials overturned on appeal. The original RAC contracts did not include a provision to handle such scenarios after RAC contacts expired. RAC contractor CGI filed a lawsuit in federal court protesting against the new payment terms, arguing that CMS violated federal procurement law by delaying payments to the RACs beyond fair and usual practices. The CGI lawsuit asked the court to compel CMS to procure new contracts through a time-consuming request-for-proposal process instead of more straightforward commercial bidding. The federal appeals court agreed with CGI's protest, and now CMS must decide how it wants to contract with RACs. The agency can either rebid the contracts through the general commercial process with the original contingency fee structure from 2008, or it can rebid the contracts through the longer noncommercial process with the new payment terms. This will cause a significant delay for the new contracts and it is likely that they won’t be finalized until early 2016. Physicians and hospitals got a reprieve last year from the RAC auditing program, while CMS reevaluated its contracts and implements improvements for physicians. Audits were to begin again in the fall of 2015. The Medicare program has already felt the effects of the scaled-back RAC program, only recouping $48.3 million of overpayments from providers – approximately $768 million less than what RACs collected in the same period the year before. March 18, 2015 Medi-Cal, Medicare Centers for Medicare and Medicaid Services, Medicare, Recovery Audit Contractor, Audits 0 0 Comment Read More »
Congress passes a number of health care provisions in the current budget Congress narrowly passed a $1.1 trillion federal budget that will fund most of the federal government through September 2015. Below is a summary of key health care provisions in the bill. Within the bill, Congress expressed concern that there had not been adequate opportunity for public comment on bundling of surgical codes in the final rule of the Medicare Physician Fee Schedule. The budget bill says that the appropriate methodology has not been tested to ensure that patient care and patient access are not negatively impacted and ponderous administrative burdens placed on providers. It asks the Centers for Medicare and Medicaid Services (CMS) to reconsider that fee schedule provision. The budget includes $5.4 billion of emergency funding to prepare for and respond to the Ebola outbreak. The National Institutes of Health will received $30.3 billion (an increase of $150 million), including $283 million for Ebola-related research. CMS receives no increase in funding over last year ($3.6 billion). The Centers for Disease Control and Prevention (CDC) will receive money to combat prescription drug abuse around the country. Twenty million dollars has been set for prevention of drug abuse and another $12 million has been included under the Substance Abuse and Mental Health Services Administration for the states to expand treatment services for drug addiction. This funding is also expected to support activities to establish or expand prescription drug monitoring databases of physicians writing prescriptions for opiates and pharmacists filling prescriptions. The bill looks at the Medicare Recovery Audit Contractors (RAC) and how audits may be reducing patient access to care. The bill directs CMS to provide education to providers on error reduction. It also asks the agency to develop procedures to reduce backlogs of claims and hearings and asks CMS to provide education to RAC contractors to improve the accuracy of their audits. The bill urges the Office of the National Coordinator for Health Information Technology to decertify electronic health records products that block the sharing of information and to certify only those products that meet current meaningful use program standards. December 16, 2014 General, Medicare Advocacy, Federal Legislation, Medicare, Prescription Drugs, CDC, Ebola, Recovery Audit Contractor 0 0 Comment Read More »
CMS suspends RAC audits, sets up physician safeguards Physicians and hospitals will get a short reprieve from Medicare’s recovery audit contractors (RAC) until next fall, according to the Centers for Medicare & Medicaid Services (CMS). The agency says it is temporarily halting audits as it reevaluates its contracts and implements improvements for physicians. The RAC program is responsible for identifying fraud and waste in the Medicare system by detecting improper Medicare payments. Last month, CMS announced it would pause any new additional document requests (ADR) from RACs until new contracts are settled, in order to reduce provider confusion and create a smooth transition once new RAC contracts are awarded. The document requests primarily affected hospital and facility services. Although the RAC documentation requests for audits are suspended, recovery auditors will complete the audits for the claims for which they sent ADR requests through February 28, 2014. RAC’s will also continue the automated reviews that do not require additional medical record documentation through June 1. CMS announced further changes to the program this week that will provide much-needed safeguards for physicians. These include requiring RACs to wait 30 days before asking the Medicare administrative contractor to recoup payments determined to be improper. This delay will allow time for physicians to discuss the results of the audit with the RAC. Previously, the short timeline for appeals meant that physicians had to immediately choose between initiating a discussion and filing an appeal. RACs will also no longer receive a contingency fee directly following the recoupment of a payment they deemed “improper.” Rather, if a physician chooses to appeal the results of an audit, the RAC will not be paid until the physician has exhausted the second level of appeal. Auditors will also now be required to confirm receipt of a physician's request for discussion within three days. Previously, no such confirmation was required, leading to frustration among physicians, particularly given the short timeline for document production, discussion and appeal. March 19, 2014 Medicare Medicare, RAC, Recovery Audit Contractor, Insurance/Reimbursement 0 0 Comment Read More »
Highlights from AMA's 2013 interim meeting More than 1,000 physicians gathered just outside our nation's capital for the American Medical Association (AMA) interim meeting. The delegates debated a large number of resolutions, establishing new policies related to the Affordable Care Act, culturally and linguistically competent care and the Medicare sustainable growth rate. A number of these resolutions were put forward by the California delegation. Below are highlights of some of the resolutions adopted as policy. Medicare Payment Reform: Following robust discussion in various meeting venues, the AMA House of Delegates passed an amended resolution regarding repeal of Medicare’s sustainable growth rate (SGR) formula. In addition to reaffirming relevant AMA policy, the resolution directed the AMA to support a full SGR repeal and to continue its strong advocacy for positive updates and for its pay-for-performance principles and guidelines. AMA was also directed to advocate with the Centers for Medicare and Medicaid Services and Congress for alternative payment models to be developed in concert with specialty and state medical societies, including a private contracting option. Payments of Penalties to Physicians for RAC Audits: The delegates adopted a California resolution directing the AMA to advocate for penalties and interest to be imposed on the auditor and payable to the physician when a RAC audit or appeal for a claim has been found in favor of the physician. Culturally, Linguistically Competent Care and Outreach for At-Risk Communities: The delegates adopted as amended a California resolution that asks the AMA to encourage greater cultural and linguistic-competent outreach to ethnic communities including partnerships with ethnic community organizations, health care advocates and respected media outlets. Health Exchange Benefit Designs and Tax Deductibility of Out-of-Pocket Expenses: The delegates reaffirmed existing policy asking the AMA to support efforts to develop benefit designs in the health insurance exchanges that appeal to young and healthy people and support legislation allowing full tax deductibility of all out of pocket health care expenses. Health Insurance Exchange and 90-Day Grace Period: The delegates adopted a resolution directing the AMA to oppose efforts to mandate physician participation in health insurance exchange products; support insurance identification cards that contain contact information for verifying eligibility and coverage; support that authorization of eligibility and coverage will be a guarantee of payment for services rendered; oppose the preemption of state law by federal laws relating to the federal grace period for subsidized health benefit exchange enrollees; and support the suspension of coverage in months two and three of the federal grace period for subsidized health benefit exchange enrollees who fail to pay premiums. Opioid-Associated Overdoses and Deaths: The delegates directed the AMA to develop a set of best practices to inform clinical use of these drugs in managing persistent pain. The policy also calls for the Centers for Disease Control and Prevention to collect more robust data on unintentional opioid poisonings and deaths to develop appropriate solutions for preventing such occurrences. ICD-10 Implementation: The delegates adopted two policies related to the Oct. 1, 2014 implementation deadline for the ICD-10 code set. One policy calls for continued advocacy to delay or cancel implementation, and another asks the AMA to seek federal funding assistance for physician practices to alleviate the financial burden associated with implementation costs, including upgrades and staff training. Contact: Nick Birtcil, (916) 551-2570 or nbirtcil@cmanet.org. December 3, 2013 General American Medical Association, Cultural Competency, Health Insurance Exchange, ICD-10, Recovery Audit Contractor, SGR, Sustainable Growth Rate, AMA 0 0 Comment Read More »
