Conferees limit extrapolation

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Sunday, August 10, 2003

August 11 , 2003

WASHINGTON - While the HME industry braces for a Congressional decision on competitive bidding, the House and Senate have agreed to move forward with a measure that would prohibit the DMERCs from extrapolating overpayments from a small number of claims to a large number of claims.

The measure is part of a package of Medicare regulatory and contracting reform agreed to by the House and Senate conference committee that is trying to reconcile each chamber’s Medicare reform legislation.

Conference committee members have also agreed to prohibit recovery of overpayments during an appeal until after an evaluation by an independent party.

At the Administrative Law Judge (ALJ) level, some estimates hold that about 80% of all recoupment decisions are overturned. Today, the Medicare ALJ resides with the Social Security Administration. The new contracting reform would move the ALJ over to the Department of Health and Human Services.

While the conferees have included language that would ensure the independence of the ALJ within HHS and CMS, the defeat of a previous proposal to make this transition was hailed by the HME industry which would prefer the ALJ to remain where it is.

“The whole issue with moving them from SS to HHS is that they [ALJ] would lose their ability to basically be rationale,” said Cara Bachenheimer, a partner at Epstein Becker & Green in Washington. “They weren’t bound by Medicare policy, so if you have an [irrational] Medicare documentation rule and somebody clearly did what they said they did, the ALJs will rule in their favor.”

Bachenheimer fears that the language that would ensure independence could just be a matter of public relations.

For the HME industry, the use of extrapolation has been the bane of providers who’ve watched errors on a relative handful of claims turn into potential liabilities that skyrocketed into millions and even billions of dollars.

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