Medicare Audit Advocacy Center
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Issue: In December, 2013, the Office of Medicare Hearings and Appeals (OMHA) announced that it has suspended assignment of provider requests for Administrative Law Judge (ALJ) hearings for at least two years, which means that a provider bringing an appeal to the ALJ level would not be assigned an ALJ for two years or more. The basis for this announcement is the backlog of approximately 357,000 claims that already have been assigned to ALJs. Also contributing to this decision is the backlog of over 460,000 claims at the next level of appeals, the OMHA. Thus, in the 3rd (ALJs) and 4th (the Medicare Appeals Board within OMHA) stages of the Medicare appeals process, there is a backlog of claims totaling more than 800,000.
This announcement has provoked widespread protest throughout the provider community, as well as from the Recovery Auditors through their coalition, the American Coalition for Health Claims Integrity (ACHCI). The size of the claims backlog has made it apparent that the claims appeals system has broken down and that CMS cannot fix it on its own. Congress has to act if there is to be an effective resolution of this problem.
NHIA Congressional Action Request: Congress has an opportunity to address the appeals issue as part of the Medicare physician payment legislation. NHIA requests that Congress focus on fixing the appeals process on two levels: (1) Congress should legislate an immediate response to the moratorium on new ALJ cases, and (2) Congress should provide a structural fix to the Medicare appeals system so that these issues do not arise again in the future. NHIA also requests that Congress focus on a holistic solution that fixes the audit and appeals process for all Medicare providers.
The NHIA specifically requests that Congress prohibit CMS from recouping disputed funds until after a provider has received an ALJ determination in those situations where the provider has appealed the claim determination to the ALJ level. This, we believe would alleviate a pressing issue arising from the extensive backlog of claims.
In addition, the following are our recommendations for dealing with the longer term medical review issues to ensure that claims backlogs do not arise in the future. We believe that a key element for easing the flow of appeals is for medical review to be focused on claims that are true outliers.
NHIA recommends the following policies to address these longer term issues regarding Medicare appeals:
- Congress should require that medical review be focused on, or limited to:
- Providers with unusually high patterns of billing;
- Providers with high claims denial percentages or who are not compliant with other applicable requirements;
- Providers who are newly enrolled in Medicare;
- Providers with questionable billing practices; and
- Services furnished by a single provider or group that includes such providers.
- Congress should require CMS to develop a mechanism for certain denials to be addressed outside of the appeals process. These denials, often referred to as technical denials, would include denials based on documentation issues or simple mis-communications between the contractors and providers, some of which could be resolved through simple verbal communications between the parties.
- Congress should align the incentives of the audit contractors to ensure that only clearly invalid claims are denied.
- Congress should also reduce scrutiny of providers with low denial rates and those who are located in areas with improper payment rates that are 50% or less of the general Medicare improper payment rate.
With these changes, we believe the Medicare program would be focusing its resources on medical review of claims that warrant the most attention, and thus would not be taking the time and resources of the contractors and providers on claims that ultimately are determined to meet Medicare program criteria.
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