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From Health Law Daily, November 5, 2014

HHS seeks ideas on ways to address the backlog of appeals requests

By Jay Nawrocki, MA

The Office of Medicare Hearings and Appeals (OMHA) is seeking suggestion on ways to address the backlog of appeal requests awaiting a hearing before an administrative law judge (ALJ). There has been a substantial increase in the number of requests for ALJ hearings in the last two years; primarily from hospitals appealing decision of recovery audit contractors (RACs) denying inpatient claims. OMHA is seeking not only new suggestions, but also comments on initiatives it has already begun, before December 5, 2014 (Notice, 79 FR 65660, November 5, 2014).

Backlog. OMHA was created by section 931 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173) to move the responsibility for hearings before the ALJ from the Social Security Administration to HHS. These hearings have to do with Medicare claims that have been denied by Medicare administrative contractors (MACs), Medicare Advantage Organizations, or Part D prescription drug program and entitlement appeals, as well as appeals of income-related monthly adjustment amount of Medicare Part B premium surcharges.

Social Security Act sec. 1869(d)(1)(A) requires an ALJ to conduct and conclude a hearing and render a decision within 90 days of the request for a hearing if the request is timely filed. OMHA was able to meet this deadline until approximately fiscal year (FY) 2012. That year there was a 42 percent increase in hearing requests from FY 2011. In FY 2013, the number of claims more than doubled from FY 2012, with a 123 percent increase in fillings. The number of appeals resulting from recovery audit contractor (RAC) determination increased 503 percent from FY 2012 to FY 2013. During that same time period, appeal requests not having to do with RAC denials also increased 77 percent. If a decision is not rendered from a hearing request within 90 days, the request can be bumped up to the next level, a hearing before the Departmental Appeals Board (DAB).

RACs. During this time period, RACs determined that many inpatient claims were not medically necessary, as the services provided, mainly observation services, should have been provided on an outpatient basis. The American Hospital Association estimated that there are nearly $1.5 billion worth of claims currently on appeal that were determined by RACs to be an overpayment because of this issue. Hospitals have been appealing these RAC determinations due to a high percentage of these decisions being overturned. CMS also suspended RAC audits of some inpatient admissions under the two-midnight rule until March 31, 2015. The suspension was an effort to allow providers to become familiar with the new instructions RACs were given under the two-midnight rule to conduct these reviews (see CMS extends RAC prohibition of reviews of stays longer than 2 midnights, February 3, 2014; Senate agrees to another temporary “doc” fix,” delays ICD-10, April 1, 2014).

Comments sought. To address this backlog of cases, OMHA has implemented two pilot programs, the effectiveness of which OMHA is seeking comment on. One of the pilots allows appellants to apply statistical sampling to all of the appeals that they filed. This would allow one decision to be applied to a number of other similar appeals. The second pilot program allows appellants to participate in settlement conferences. Under this pilot, independent OMHA facilitators discuss potential settlement of pending claims with authorized settlement officials.

In addition to these two pilot programs, OMHA is seeking comments on any new ideas individuals or organizations may have to more quickly move the large number of backlogged appeals to resolutions. In another effort to address this backlog of appeals, CMS recently offered a settlement to hospitals that had claims awaiting a hearing (see CMS offers partial payment for certain Part A claims under appeal, September 3, 2014).

MainStory: TopStory ClaimsAppealsNews IPPSNews BillingNews MedicareContractorNews RACNews PaymentNews CMSNews PartANews PartBNews PartCNews PartDNews

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