RAC audits: CMS adds discussion period

Friday, February 21, 2014

WASHINGTON – The week after a scathing forum on audits, CMS on Feb. 18 pledged to make a number of changes to the recovery audit contractor (RAC) program in 2014.

The change with the biggest potential impact on HME: CMS will require the RACs to wait 30 days before sending a claim to the MAC for adjustment to allow for discussions. Industry stakeholders say providers can use this defined window to try and clear up claims that have been denied due to technical reasons.

“If they say I don’t have a signed delivery ticket and it’s just an oversight—it could be on the provider’s part or the carrier’s part—and I can keep it open as opposed to having it sent to the second level of appeals, the Qualified Independent Contractor (QIC), it could prevent a lot of claims going down that path,” said Kim Brummett, senior director of regulatory affairs for AAHomecare.

At the Feb. 12 forum, hosted by the Office of Medicare Hearings and Appeals (OMHA), stakeholders made their case for why the audit program has run amok, resulting in a backlog of 460,000 appeals and the suspension of the assignment of new appeals to the administrative law judge (ALJ) level for up to two years.

Right now, providers almost always work their way up the appeals chain because the RACs aren’t willing to discuss denials and it’s the only way to keep the overpayment process from kicking in, stakeholders say.

“That’s one of the reasons things are so backed up,” said Ryan Ball, director of state policy for VGM & Associates. “Providers say they have no choice.”

CMS also plans to keep the RACs from collecting their contingency fees until the second level of appeal is exhausted. That doesn’t go far enough, stakeholders say.

“We know the true ability to turn over a claim is at the third level, the ALJ level,” Brummett said. “Their scope is different; they can look at medical necessity.”

Two other changes in the works will have less impact on HME providers, stakeholders say: revised additional documentation request (ADR) limits that will be diversified across different claims types (e.g. inpatient, outpatient); and adjusted ADR limits based on denial rates.